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Old 09-15-2012, 05:37 PM #1
RenoIndoorPaintball
 
 
Join Date: Sep 2012
Business Decisions

The value of a customer is calculated as:
(Average Value of a Sale) x (Number of Repeat Transactions) x (Average Retention Time in Months or Years for a Typical Customer)=

An easy example would be the lifetime value of a gym member who spends $20 every month for 3 years. The Value of that customer would be:$20 x 12 months x 3 years = $720 in total revenue (or $240 per year).

If the fields total player count per year is 2,000, broken down into two groups ;Rental players and Self Equipped.

Group A is Renters: $45 ($35 rental + $10 net paint sale) x 1 x 1 = $45 (net) per year

Group B is Self Equipped: $35 ($20 day admission + $15 net paint sale) x 12 (playing 1 time per month for 12 months) x 1 years (1 year just to keep the comparison equal) = $420

Let us also assume that based on the above 2,000 est. annual participants, the field has 50 Self Equipped Speedball players and 1,950 renters. The Renters Group would generate $87,750 in annual sales and the Self Equipped Group would generate $21,000 in lifetime sales. Combined that is $108,750 in net sales.

Group A generates 80.7% of net income
Group B generates 19.3% of net income

Given all of this information and assuming the model represents your field, why would anyone make the majority of their business decisions to satisfy the minority of their customer base? Decisions like, spending money on turf and air bunkers. Do we really think that the PSP and or NPPL are moving their events to new locations and our little Speedball field is on the list of proposed locations? Do we really think that either league is working toward a system that actually pays professional players to play just paintball, instead of it being a hobby and their day job pays their way. Mind you that the NFL started out this way, but they evolved and my guess is that neither paintball league has paying players a full time salary to just play on their 50 year plan.

Now I totally understand why so many Speedball fields are converting areas designated for such play to more lucrative ventures like RC Racing, Go Cart Racing, Recreation play fields, etc...
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Old 09-15-2012, 07:54 PM #2
Delmarva Paintball
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That is an excellent example.

Rather then spend so much effort and money to attract the most troublesome and least profitable customers Put the time and money into what will attract the better, more profitable ones.
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Old 09-15-2012, 09:04 PM #3
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Being around paintball for many years I have seen many business come and go because they do not follow that stragity. Thank you for posting that.
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Old 09-15-2012, 09:12 PM #4
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Your numbers look off.
The number of visits for your regulars seems off.
Parties due generate more money but there is a marketing cost, and the frequency at first is sparse.
If you are firm with the type of player you tolerate than your regulars dont really cause that much of a problem.
Indoor alone is a tricky buisness model ....depending on your climate.
Having an outdoor field to complement the indoor is ideal.
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Old 09-15-2012, 09:15 PM #5
TeacherCreature
 
 
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A few questions
Why are self equipped players equal to speedball players to you?
If there is any money to be made on the speedball group why not have both? (assuming the land is available and you dont mind the speedball player headache)
Not saying this cause I am arguing the point, your logic seems sound to me and I agree with your conclusion.
Also wondering if that $10 net paint can be increased in some way?
assuming a cost of $6 a bag and a sale price of $25 (for example) make the net $19 and you can make it mandatory by packaging the $25 into the original $35 and making a $60 paint included package.
The extra $9 netted in your example applys to both player types for all visits and you just added $23,000/yr profit give or take
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Old 09-15-2012, 09:53 PM #6
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Wow... couple of points here. First, I also agree your numbers are way off. You are saying that renters buy a net of $10 worth of paint, and people that own their own gear only buy $15 worth?? I find that folks that have their own gear are typically going to buy a case, and based on your prices of about $70 a case, that's a lot more than 5 bucks more than renters that typically shoot through about 500 balls.

And the interesting thing is you bring up this topic at all, as when I go to your website, I see a link that says Gallery. So that would seem like you would have pics of recreational players. But instead, I see a ton of posts about 5 and 7 man tourney teams, posts about Inaugural NPL Speedball Championship Game... and when I go to photos, I see a bunch of people swimming.

So are you reading your own posts and then using the information you are trying to give to others to work on your own site and marketing plans??

Seems a bit like an oxymoron here.
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Old 09-16-2012, 09:57 AM #7
7paintball
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I took it as an example and not real numbers.
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Old 09-16-2012, 10:41 AM #8
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Quote:
Originally Posted by 7paintball View Post
I took it as an example and not real numbers.
Even if an example, the numbers should at least be realistic if not real.
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Old 09-16-2012, 11:33 AM #9
7paintball
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True I just never thought they were real numbers to start with.
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Old 09-16-2012, 11:43 AM #10
RenoIndoorPaintball
 
 
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Lets pause and clarify.

The nature of an example is that its an example. An example is a demonstration with the aim of informing others of how a task should be performed. We possibly should have used Exemplar which is a model which others can use to understand a topic better. From a base of information a prospective or present field owner/manager may check their own operational numbers for a balance between customer revenues and expenditures to ultimately justify their income and expenses ratio or to modify said ratio.

Any actual net profit(s) from admission to paintball may be inserted into the formula for analysis. Also, we made an unfair assumption that all self-equipped players were Speedball players, please insert your own ratios as we grouped all self-equipped players into one group.

GatSplat: We are not interested advertising to viewers of PbNation about our indoor field so if someone views our website and comes across pictures of an old 2010 D3 5-man team playing Huntington Beach that just so happened to be photographed playing in the water after a 10 hour drive that started in the snow - we really have nothing to say about the viewers interpretation of the Facebook photo album.

Lets review; we almost never post in this forum thread and when we do, we are accused of advertising our field. We did not realize that our single post about business decision math would infringe upon some virtual GatSplat territory rights.

Advertising our field? Lets review and compare - for example: Reno Indoor Paintball rarely posts outside of its own local thread on Pb Nation and has no long advertising message attached to every post.

GatSplat posts in response to numerous comments and threads throughout Pb Nation and has a significant advertising message attached to every post. "Larry GatSplat.com" "We're selling off all our parts, boards, barrels, triggers, etc. Make An Offer On Anything.
And feel free to sell any of your used stuff free!"


With this post, we have officially devalued our original intent which was to contribute and constructively converse with fellow field owners about decision making and the mathematics behind said decisions.

Enjoy the top of the hill and possession over all things paintball in Pb Nation.

Any field owner wishing to discuss business without all this drama, please feel free to contact us via private message.

Last edited by RenoIndoorPaintball : 09-16-2012 at 11:50 AM.
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Old 09-16-2012, 11:52 AM #11
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Reno... I've no problem with you advertising or not advertising. I was just commenting that is was a bit strange that you came in here with some very solid advice about it is probably best for fields to cater to the birthday crowd instead of the tourney crowd, but yet, your web page and facebook pages don't follow the advice you are giving. That just struck me as odd....

No need to take any offense...

I totally agree with the posts you were making... I ask potential field owners all the time, "How many people do you know who have $300 + guns? Now how many kids are there that will have a birthday this year?"

So your points are right on, albeit I felt your numbers were a bit off, and it seemed strange that you seemed to be talking about promoting the recreational crowd, and yet your web presence wasn't. I never accused you of any advertising here, in fact I had to google you to find your web site - which I always like to do as I'm a web designer. I would actually suggest you put your web site in your sig... can't hurt!

So please take no offense... none was meant.
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Last edited by GatSplat : 09-16-2012 at 11:57 AM.
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