Overview
Experiences matter. U.S. households have increased spend on experiential entertainment to pre-recession levels, and the growth of consumer spend on services has far outpaced the spend on durable goods in particular over the past 10 years. Yet despite all the advancements in in-home entertainment, (Netflix, virtual reality, etc.), consumers still find a flurry of reasons to abandon the couch and go “experience” more.
However, site-based entertainment is a tough business for many reasons. Companies need to spend capital every year to drive repeat visitation. While marketing a fun place might seem easy, you need to spend a lot to break through huge advertising clutter. Finding a robust differentiation without licensing expensive properties is tough. Finally, kids and families are fickle, leading to surging new concepts and fads that decline quickly.
The very competitive experiential landscape requires that companies obtain a deep understanding of the consumer use case, balance the need to invest in assets with the flexibility to evolve, and deliver financial returns. L.E.K. has helped many clients successfully navigate this complex journey.
How we help
We provide clients end-to-end support at any stage of the site-based entertainment life cycle. Specifically, we help answer key strategic questions for any type of site:
- Commercial case development/revamp
- Who is the core target audience? What are the use cases?
- Where are we in the life cycle of the activity (emerging vs. mature, etc.)?
- What is the competition doing, and how can we stand out?
- What is the investment needed, and how can we prove ROI?
- Financial performance evaluation/improvement planning
- What are the key benchmarks we should use to analyze the business?
- What are the reasons for under- or over-performance on these key metrics?
- Which levers can and cannot be flexed based on the nature of our offering?
- For new businesses, concepts or sites, how should we think about the ramp curve?
- Growth plan/market capacity
- How many sites can the market sustain?
- What determines a good site, and what should our site selection process be?
- How should we think about the rollout, given our offering and that of the competition?
- Does the concept resonate internationally, and how does rollout differ globally?
- Marketing/product offering
- How can we improve the pricing schematic to better match our guests and our use case?
- Are there elements of our distribution that need to be improved?
- What is the marketing strategy? Does it fit our customer segmentations?
- How do we optimize the promotion strategy while maximizing reach and revenue?
Examples of our work
L.E.K. has a long track record of supporting site-based businesses and is one of the global leaders in the sector. Examples include:
- Led the turnaround at one of the highest-profile theme parks in the world
- Helped optimize the most sophisticated operations for a site that flowed millions of guests
- Developed growth plans for many local and regional attractions based on each individual service offering and on guest composition
- Developed multiple business plans for new concepts, and helped them develop into successful businesses
- Evaluated the growth potential for many emerging attractions to ensure the right level of investment
- Found new revenue streams and helped manage costs for a national local entertainment chain
- Documented robust opportunities in virtual reality and augmented reality
