"Rewards" or similar programs in theaters

[Mike Blakesley]

At the Rocky Mountain convention this year, sentiment seemed to run in favor of Rewards programs for movie theaters. "You really need to get something like this going," said presenter after presenter, and of course all of the major software outfits have rewards programs built into their systems.

Since we like to stay on the forefront of things and much as we can, within our limits of course, I started designing a rewards program in my head as we made our way home. I was half-way through digesting the super-complicated instructions, procedures, menus, and settings in RTS when it kind of hit me: What's the purpose of this anyway?

I figured, the main reason for a rewards program is to get people to go to movies more often. But does it have that effect? Or would we just be throwing money into a program that wouldn't result in any more business?

I think if we had other theaters in town, we might want to do Rewards to make us competetive, but there are no other theaters here, so that part's not necessary.

I thought it might be good to have a two question survey: "Would you like to see us create a rewards program?" and "If yes, would you still be in favor if we had to raise prices to pay for the program?"

Is there anyone out there who operates a rewards program? How does yours work? What are the pros and cons? Do you recommend it?

[Frank Cox]

I really don't see why you would do that, particularly when you're in a non-competitive market like you are.

It's not exactly the same thing but for many years I had a one night a week where everyone paid the child rate for their ticket. After a while (too long) I realized that all I was doing was giving a dollar away. So I stopped.

"Get a free popcorn after five purchases." Is it more likely that you're going to sell more popcorn or that you just give more popcorn away?

[Ryan Gallagher]

No perspective as a cinema to offer...

But most of the coffee and smoothie shops I visit near work just have a rewards program built into their Square or whatever POS card processor. You rack up points with every purchase, points become valid for a discount, freebie, or merch depending on how you use them or save them. I just use the $5.00 discount every time as soon as it hits. But these are highly competitive businesses with multiple competing options within blocks of each other, that have an incentive to reward some kind of "loyalty" program.

The one perk I could see applying to Mike is that these rewards integrations also keep track of things like customer birthdays and can be set up to offer things in celebration. And can be configured to email or SMS reminders/notices of things too.

Maybe it's not the reward program itself that is the benefit for Mike, but the customer data and connectivity aspects if implemented via one of those offerings.

[Harold Hallikainen]

I think this is similar to the "Costco Effect" where people will choose Costco over other stores since they spent the membership fee. I think this would work best in a competitive environment. But even in a noncompetitive environment, it MIGHT get people to come in more often. We are members of the Loft Cinema, a local nonprofit theater. That gets $3 tickets on Mondays and half price the rest of the time. We go there once or twice a week (and today saw Moonstruck as part of the Hollywood Classics series).

[Ryan Gallagher]

Being a non-profit we also offer film club tiers with various perks. If you come to a lot of summer classics the free parking perk nearly pays for itself as a single patron premier level, never mind the free popcorn and admissions! Parking won't be a huge perk most can offer except in downtown areas.

https://www.austintheatre.org/support-us/memberships/film-fan-club

[Randy Stankey]

Why don't you start with just a stamp card and work up from there.

Just order a box of business cards with ten squares on their backs. Have a rubber stamp made up with some non-reproducible design. Every time a customer buys something they get a stamp. When the card is full, they can cash it in. It's simple to do, it doesn't cost very much and, if you decide that it's not worth it, you can discontinue it without a lot of hassle. Put an expiration date on the cards in case somebody tries to come back ten years from now, demanding free stuff.

If you do it through your POS or some computer app, you have to set up the system. You have to enter all the names of your customers and keep track of them. You'll probably have to issue ID cards or something. Then, you have to continually keep track of who's who, what's what and who gets what. That could be a lot of work. Maybe more work than it's worth.

You won't get more customers by giving away free stuff through some loyalty program. You won't get existing customers to buy more stuff, either. You won't even get more business by sending out e-mails to people who sign up. It's all smoke and mirrors. The real reason for customer loyalty programs is not to draw customers by giving away free stuff. "Free Stuff" is just a line of bullshit that business tell their customers in order to sucker them into giving up their names, addresses, and purchase histories so that the information can be sold to data brokers. Do you think that you'll gather enough information to make this thing worthwhile? What are data brokers paying, these days? Something like 1¢ per 1,000 names?

So you SPEND money to collect names. You MIGHT make a few more bucks in extra popcorn sales. The data broker might pay you a few bucks for your trouble but, then, they are going to turn around and resell that information and make thousands from it.

That's the reason why those assholes at your convention all stood up and said, "You really need to do this." They weren't looking out for your best interests. They were looking out for theirs.

[James Wyrembelski]

Every place I worked at that tried to start up some type of reward or loyalty system ended up quitting not too long after. The only people interested were the ones that were long time regulars anyways. So, they just ended up getting free stuff once in a while and it never really brought anyone else in.

Randy is pretty much spot on.

I, myself can't stand to be asked to join these anymore. The grocery store, gas station, restaurant, etc. No...leave me alone

[Mike Blakesley]

Just order a box of business cards with ten squares on their backs. Have a rubber stamp made up with some non-reproducible design. Every time a customer buys something they get a stamp. When the card is full, they can cash it in.

We actually had a program like that for about 30 years but it was for kids in grades 7-12. If you had a student discount card, you got a dollar off your ticket, and when the 10 squares on the card had been stamped, the card was worth a free movie. The program was very popular in the 80s and 90s but as soon as cellphones came in and addicted all the kids to TikTok and streaming, interest in it faded to almost nothing and we finally discontinued it about 10 years ago. Nobody even noticed.

[quote]I, myself can't stand to be asked to join these anymore. The grocery store, gas station, restaurant, etc. /quote]

That's another thing I don't like. Plus I keep thinking about how it might slow down lines, be hard to train employees on, be confusing for customers, etc. on top of us spending time, training and money for little or no return. So I'm now leaning toward just forgetting the whole thing.

[Ryan Gallagher]

The problem with classic punch/stamp cards is hardly anyone carries a traditional wallet anymore. But I guess that kinda works to your benefit, the illusion of a rewards program that only a handful of people will remember to make good on. Lol

with the card processing addon automatic systems everyone gets rewarded eventually.

[Randy Stankey]

Aah! But it's the illusion of value that the customer perceives when the business hands over something tangible, even if it's just a slip of cardstock, to the customer. It's noting but a fancy looking business card with the usual info plus some flashy graphics. If you're giving them anything, you're giving them an advertisement for your theater. On that basis, you wouldn't even care whether that card ever gets redeemed or not. Your "Customer Loyalty" card has already done its job... putting your business's name in the customer's face.

If that customer comes back even once, the cards have paid off. If they come back ten times, more's the better. By that point, if they have bought popcorn every weekend for ten weeks, a freebie means little to you and a lot to them. But it means more to the both of you. It's the formation of a relationship.

This kind of grassroots advertising takes a long time to build but if you keep at it, it leads to long term success.

Too many people, today, put short term profits over long term success, too much. I have no problem with people who want to manage their costs and maximize their profits. I've got a lot to learn in those areas. I'm sure that some of you guys...I know that some of you guys...could teach me a thing or three. However, when you run a lean business, you still have to remember why you started in this business and to keep your mission statement in mind.

I have no problem running a lean business. I DO have a problem with profit takers and bean counters and penny pinchers.

When you're a big business that can afford the costs of a full fledged loyalty program then it makes sense. You're going to need somebody to manage the program, even if only part time. You're going to need somebody who knows how to look at the data, make sound observations and give good recommendations. If you're a single location, I don't think it'll be a worthwhile cost vs. benefit.

[Ryan Gallagher]

You going to need somebody who knows how to look at the data, make sound observations and give good recommendations. If you're a single location, I don't think it'll be a worthwhile cost vs. benefit.

To be fair I think the modern loyalty features of many of the tablet based card processors are fairly hands off once you configure your points scheme and rewards. I don’t think extra management time would be involved unless you spend hours pouring over the resultant analytics.

But “easy” has a cost, no doubt the processor apps charge for this addon, in addition to their base services. And the customer is always the product. It is likely those folks who get to sell the customer data to brokers, not a single cinema owner operator who sees that benefit at all. You may also get the customer data, but unless you manage email or snail mail campaigns too, not much benefit there.

[Ryan Gallagher]

Speaking of fairly intrusive data use that not everyone would be aware of. In the US at least, there are 3rd Party customer profiling services that non-profits often use. It permits things like flagging high net-worth potential VIPs as they walk in the door, for explicit hand-holding and catering to their needs in the hopes of building a relationship towards acquiring new donors.

Big data is creepy, even when used for "good" by arts organizations.

[Armand Daiguillon]

I have a location in a competitive market and another in a non-competitive market for the sake of "synergy" we have the same reward program at both - but we do not promote it very much at the non-competitive location. (although people do like it and it really doesn't cost much to the bottom line)
So if you want to keep it simple - do it. Even in a non-competitive market, it won't hurt and builds good sentiment.
However - you SHOULD do a discount day like most others are doing (usually Tuesday, Wednesdays are bad because films can open on Wednesdays) Ours was $5 but we raised it to $6 about 8 months ago ...not one complaint or comment when we did. But it DOES bring out a demographic that might not ordinarily go to the theater. Tuesdays are typically our second busiest day now.

[Lyle Romer]

I think the only way it would make a lot of sense in your situation is if the rewards were tied to frequency, not quantity. Otherwise, you are just giving people rewards for doing what they would have done anyway. I don't know if it is easily done in RTS but something like you get points for attending two movies within 30 days of each other (or less depending on what you are trying to accomplish). Then, after a certain number of points the customer gets a reward.

An example is the P.F. Chang's restaurant chain. Their rewards program used to give points for every purchase and the points would keep accruing until you had enough points for a free entree or something. A few years ago, they changed it to giving you P.F. Chang's cash for every purchase that you can use on future purchases, but, the cash expires relatively quickly (I can't remember if it's 30 or 60 days). When it is getting close to expiration they send a warning email. Basically they made it that if you want to be rewarded, you need to purchase their food more often instead of just when you would have anyway.

[Ryan Gallagher]

I like Lyle’s idea of tuning such a system for frequency improvements over accrued discounts. This really targets the audience you have already in addition to the casuals. You’d have to tune the expiry threshold to to represent an improvement over current behavior.

Might take the form of a points cap, points expiry, or vouchers as a reward that are good on an additional visit, rather than the transaction in front of them, perhaps with an expiry itself. If the system can’t do it the “theatre bucks” with an expiry is a valid surrogate.