Creating XR Value
Throughout this site, we have explored the various elements that can aid in the creation of a business process model. We have used a theoretical small to midsize studio expanding into the extended reality (XR) sector as an example. Location-based entertainment (LBE) attractions and exhibitions account for a significant portion of the extended reality (XR) sector with theme parks, museums, day spas, casinos and zoos, among others, seeking to bolster their sales with new offerings.
Businesses specializing in this domain will not only need to create fun, engaging, high quality immersive experiences, but also find a way to actively measure and quantify success and what drives the underlying metrics that define success. Let’s take a look at one approach to developing a sales strategy to better understand where our sales data will be coming from and what our goals are for success.
Looks Fun: Tips for Providing Value to Highly Diverse Groups
Leads: Guest Profiles & Behavior Blueprints
Suppose our theoretical business produces a mixed reality (MR) museum experience and seeks to attract of thousands of excited guests each year. Who are the guests of the attraction and how can we reach them even before they have planned a trip? Profiling guests and creating behavior blueprints can inform decision makers on opportunities to create value. Initially, this type of strategy will have to lean heavily on market research and stakeholder expertise, for setup, but once in place, by capturing data and refining the process, powerful insights can be realized and a true behavioral blueprint established.
Suppose that the attraction guests vary greatly demographically and include most, if not all genders, nationalities and income levels. Geographically. guests are a mix of local residents and tourists seeking adventure. Additionally, guests span a wide range of age groups from youth to senior guests. Lastly, consider that attraction guests are likely to be either family and friend units varying in size from 2-8 riders per unit or traveling with larger groups (i.e. schools and youth groups) with around 13-20 potential riders. Some people in the groups may visit the facility, but not join in the immersive experience.
At attractions, it is important to note that the staff sells fun, educational and whimsical experiences for the whole family, not tickets for a ride. Each attraction has its own branded merchandise, engaging decor and staff to interact with guests, keeping guests who are waiting for riders calm and happy. In this process, guest satisfaction is qualified by how much a person enjoys themselves before, during and after the experience and is quantified by the degrees of emotional connection each individual has with the immersive experience itself. Although the person entering the immersive experience is the primary sales target, auxiliary members of the guest’s group should be considered, as well.
Begin at the Beginning: Alignment
The first goal of a location-based entertainment sales strategy is to align with the diverse pool of guests and the channels that reach them by developing a channel strategy. Ensuring the experience “looks fun” to a broad range of people and ensuring the brand’s message comes across clear, concise and succinct over many channels is a high priority task. Keeping the brand narrative fun and authentic in ads, commercials, social media channels and in online review forums is imperative to creating brand value because it builds name recognition and establishes a positive reputation.
In addition to an overall channel strategy, a mobile marketing campaign can be set up to maximize reach. Most youth and young adults are fairly heavy mobile users. Although there are nuances between Generation Z and Generation X, generally a large percentage of these heavily online, connected users favor their mobile devices. Moreover, we can leverage hyperlocal content to create brand awareness, while creating unique rewards that target our local audience.
By monitoring social media and engaging on review boards, it’s possible to connect directly to guests and future guests in a positive way. Through these channels it is also possible to manage the business’s reputation and catch any problems early on. This way in the unfortunate event that someone has a poor experience, a staff member can engage with them to learn about and rectify the situation.
Creating Value Through Social Media, Engagement and Incentives
Let’s take the position that our theoretical production studio is looking to profitably grow business revenue by carving out a substantial share of the highly competitive $40 BN+ plus global theme park market. One of the ways to create value is to motivate visitors to check in on social media. By checking in on social media, our visitors can interact with people they don’t yet know to make and meet new friends, recommend places they like, keep track of places they have visited, and receive valuable incentives.
Modifying & Improving the Strategy
In the initial stages of the sales strategy, many things discussed will be in the form of hypotheticals and/or based on market and other research. At this stage, the business is just starting to capture data and make formal analytics selection. Additionally during the modification stage, metrics will begin to be tracked and refined.
In order for this strategy to work, an investment plan is needed to fund future leadership and to raise teams that will meet and exceed guest expectations and turn guests from just repeat business to brand ambassadors. Establishing proper investment and support resources will allow our theoretical business to modify its approach, as needed, and to deploy tools that will aide in agent training and support for the overall sales program. This includes investing in team development, skills development and funding augmentations to make the sales strategy and proposed business process more effective over time.
Sales & Pricing Analysis
To analyze our sales approach and adjust our pricing accordingly, a model of the “next most likely exhibition ticket purchase” will be built around the input data of recent exhibition visitors, who purchased at least two ticket or passes to an exhibition over the course of the past year. Next, a predictive model will be constructed to predict the next most logical ticket purchase based on purchasing history and the buying behavior of other exhibition visitors. Moreover, a conditional probability model will be built using a Bayesian-style approach P(A/B)=P(A&B)/P(B), where A and B represent the exhibition ticket categories.
- Category A = Single Use or Short Stay, Low Volume, Low Cost Tickets i.e. single, all-day pass, three-day pass
- Category B = Multi Use, High Volume, High Cost Tickets i.e. month/season passes, family/multi-ticket packages, specialty experience
Viability & Feasibility
For the most part, this is a very routine set up for prediction. As long as the data is correct and captured consistently, this approach should yield a successful prediction with 95-99% estimated accuracy, depending on validation model. In order to perform this analysis there are a few things that need to happen.
- an analysis of the historical sales data must be conducted,
- the development of a purchase affinity matrix must be completed, based on accurate historical sales records,
- a prediction of the next most likely exhibition ticket package must be created, and
- back-end analysis to validate the accuracy of the prediction must be set up.
If all of these tasks are performed well, then theoretically sales revenue should increase over the course of the next 6 months.
Probability of Success
Finally, a conditional probability matrix will be created to understand the probability that a visitor will buy category (A) given the visitor has bought another category (B) in the past. This model easily set up in RapidMiner and leverage either Naive Bayes, a Single Vector Machine (SVM) or Neural Networks for validation depending on rates of accuracy, which are easily achieved using the ROC node.
Using this methodology, there is a very high probability of a successful outcome. This is a very standard and straight-forward approach that has been time tested and used to solve many similar types of predictions. Typical outcomes for this style of prediction are around 97-98% accuracy or above.
Causal Loop Diagram
Below is a featured design for the domestic sales of our theoretical studio. The key areas driving our domestic sales are R&D, Pricing, Visitor Happiness, Advertising and Branding, Promotions and Competition. Consider that by studying at the all the “interactions of the variables, the behavior of the entire system is discovered” . Additionally, by using a causal loop diagram, our analysts will be able to “identify and visually display intricate processes and root causes” .
Stock & Flow Diagram
This is a stock and flow diagram for foreign sales. It offers us a qualitative look at the relationships and interactions happening with our foreign sales. “In system dynamics modeling, dynamic behavior is thought to arise due to the Principle of Accumulation. More precisely, this principle states that all dynamic behavior in the world occurs when flows accumulate in stocks” .