My wife Raven and I have taken a laser focus to innovation recently. Our geographic area continues to gain more ice arenas, increasing competition, and if you’re not careful, decreasing profit margins. We don’t want to compete that way. These types of cut-throat models always end up adding far more value to customers than they do business owners. Therefore, the only way to stay profitable and grow your business is to innovate.
As Raven and I build our portfolio of businesses and opportunities I am always reminded of the Red Ocean vs. Blue Ocean strategy first explained to me by a gentleman I worked for as a young man. The best definition of this idea (allowing only for a quick Google search) is from the website blueoceanstrategyaustralia.com:
“Red Ocean companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth reduce. Products become commodities and cut-throat competition turns the ocean bloody red…In Blue Oceans, competition is irrelevant.” *
I think the word innovate produces a gag-reflex and anxiety for many people. Often, the word innovate has a negative connotation attached to it. An idea that a person has to be almost inventive or possess a creative genome which is simply not found in all people. I promise this is not the case. Take it from me, I am probably as ‘cookie-cutter’ as they come. Innovation simply means being able to recognize trends. Albeit this too often causes people to shrivel back into their shell, but trend recognition is easy. The trick is don’t overthink it.
Look at changes already taking place. These are the trends of tomorrow. For example, more people are allocating more of their budgets to discretionary spending, i.e.: family entertainment. How do we capture these people and their willingness to spend? Ice Skating obviously! However, we also need to recognize not all people are interested in ice skating, at least not at first glance, so what do we do to drive foot traffic into the building?
For Raven and I, our first answer was Broomball. Great game, but we drastically miscalculated how willing people would be to participate after they realized how much money they needed to spend on equipment to satisfy our (and our insurance carrier’s) safety protocols. We provided the brooms, the balls, and the ice surface, but we did not account for the idea that people who already owned the equipment would rather skate/play hockey, and the people who didn’t already own the equipment were not willing to invest a few hundred dollars to participate in a game they were not all that familiar with.
Our second answer however was much better: Bumper Cars on Ice. With a little encouragement from Jeff Grable of the Delaware State Fairgrounds (who purchased them before we did), Raven and I decided to investigate the idea further. We have found great success! The bumper cars allow us to capture demographics we didn’t capture previously and indirectly advertise our programs and packages to those people previously mentioned, who don’t like/or don’t think they want to ice skate.
Since implementing the cars, we have re-cooped our investment, increased our ice per hour revenue, sold far more corporate events (team building exercises) during non-peak hours, increased revenue possibilities for birthday party packages and simultaneously increased our program attendance through increase awareness. Just last week Raven booked a session for a non-profit group of visually impaired people. They are ecstatic about the idea of being able to drive while being contained within a safe space.
Our arena, being only the 4th in the country at the time, also benefited tremendously from press exposure with some local news and radio station articles & video clips generating over 500,000 views.
Considering this success, the next logical question is, “what’s next?”
We are currently exploring/testing the idea of Knocker ball, where participants wear a huge inflatable ball around their bodies, and, in our case, will try to score goals with a ball while maintaining traction on the ice. Initial customer surveys look promising. Our data indicates customers are willing to pay a premium for specialty experiences.
If this all sounds too much for you, there are always the simple tips and tricks many have had success with too. Examples include in-house hockey programs, figure skating, tournaments, character skates, face-painting, disco & DJ skates, home school groups, minority religious holiday observation, appreciation days (police, military, fire, EMT, etc.), fundraisers, challenger experiences, etc.