Getting Ski Resorts To Come In From The Cold
VARs should examine the sales opportunities that exist with radio frequency identification and ski resorts, which clearly need this technology.
Business Solutions, February 1998
Because the number of visits - defined as someone purchasing a lift ticket or season pass - has stagnated, ski resorts have had to place more of an emphasis on attracting new skiers and retaining existing ones. Some resorts have begun using radio frequency identification (RF/ID) to meet those goals. RF/ID helps resorts collect important marketing information, eliminate excessive waits to buy lift passes, and offer skiers the convenience of cash-less transactions. "Many ski resorts are at a crossroads," says Bill Stapleton, executive vice president for Lasergate Systems, Inc. Lasergate Systems (Clearwater, FL) is an AIDC VAR for ski resorts. "Some baby boomers are getting older and losing interest in skiing. As a result, resorts have to focus more on attracting younger skiers."
However, because most resorts have not yet implemented AIDC, the market remains largely untapped. Stapleton discusses the sales opportunities available with ski resorts, and how some resorts are using RF/ID to develop a competitive advantage.
Why You Should Sell RF/ID To Ski Resorts
For years, ski resorts have issued skiers season passes that have large letters identifying them as such. Skiers attach these passes to their jacket zipper. As they board the lift, attendants make sure the passes are valid. That approach has one major shortcoming, though: it doesn't allow ski resorts to know how often skiers use their season passes.
However, some resorts now issue skiers passes with embedded radio frequency identification tags, or chips. These passes are roughly the same size as a credit card, and include the holders' name and photo. The passes can be used as season passes or one-day passes. One resort, Sunday River Ski Resort in Bethel, ME, has issued over 12,000 RF/ID-based passes to its customers. Lasergate resells Brady USA, Inc.'s RF/ID technology; Lasergate sold the passes to Sunday River. Brady (1997 net sales of $426 million) provides RF/ID products.
Sunday River's skiers carry the RF/ID passes with them. As skiers prepare to board the lift, attendants scan their RF/ID passes with Brady's handheld readers, which emit and receive radio waves to read information encoded in the RF/ID tags. That way, resorts can verify that skiers are authorized to use the lifts. This verification process is referred to as "proximity scanning" because the tags only have to be in close proximity to - as opposed to direct contact with - the readers. (Skiers present the cards to the workers, who then scan them with the portable readers).
The RF/ID readers are connected to handheld, RF data terminals so the information can be transmitted to the resort's host computer system.
According to Stapleton, resorts buy technology primarily based on its ability to generate information that helps them increase profitability. Ski resorts can use the information collected from RF/ID in three ways:
- To increase sales of season passes and other packages - With RF/ID, resorts can track how many times skiers use their season passes. That information is valuable, because season passes can cost more than $1,000, depending on the resort.
"Skiers who used their passes 25 times would probably feel they got their money's worth. However, people who don't ski as often wouldn't renew their pass if they didn't think they got their money's worth." The result, Stapleton says, is resorts have to be more aggressive in their marketing to the occasional skier. "Offering discounts might make the difference in some skiers buying season passes," he says.
Collecting information related to a skier's number of visits also can prove valuable, Stapleton adds. For example, avid skiers are more likely to buy ski equipment, or spend money on other "extras," like weekend hotel accommodations. "Marketing campaigns are costly," Stapleton says. "So it's more cost-effective for resorts to market weekend packages and equipment to those most likely to buy. In the past, ski resorts had no easy way of tracking how often skiers used season passes."
- Targeted marketing - RF/ID cards allow ski resorts to track which slopes each skier uses. Because ski resorts know the heights of their slopes, they can track how many vertical feet pass holders ski during the course of the season. Some resorts offer "vertical feet" programs, similar to frequent flyer programs.
"Resorts can reward skiers, maybe with a free pass, once they accumulate a certain number of feet," Stapleton says. "It helps ski resorts with one of their main goals: customer retention."
- Human resource applications - At larger resorts, skiers may have their choice of up to six different restaurants. Skiers typically eat at the restaurant nearest the slope they're skiing on. By scanning lift tickets, resorts can accurately predict how many skiers will go to each restaurant. "If most of the skiers were on one slope, the resort would want to move extra employees to the appropriate restaurant so it could better deal with the extra traffic," he says. "There's nothing worse for a skier than taking a break for lunch, and enduring an excessive wait."
Similarly, RF/ID allows resorts to know whether certain ski lifts are used more than others. Armed with that information, resorts can make mechanical upgrades to those lifts, allowing them to run faster.
The fact that the ski resort market remains mostly untapped signifies the number of sales opportunities for VARs. However, Stapleton says VARs still face challenges in selling to this market:
- A reluctance to change - Lasergate Systems has found some ski resorts to be "reluctant" buyers of RF/ID. "Most resorts have operated without those technologies for years," Stapleton says. "As a result, RF/ID represents a significant change - albeit for the better. And most people are resistant to change."
"However, ski resorts haven't had to worry about retaining customers in the past. The vast majority of ski resorts are going to have to adopt RF/ID because it provides them a competitive advantage."
- A limited selling cycle - VARs generally have to sell to resorts during the summer. Stapleton explains, "Once resorts begin preparing for the ski season in September, it's difficult for them to think about new technology. During the season, the resorts are too busy. And most managers take vacations at the end of the season, in March or April."
- Demanding support requirements - Ski resorts place a high priority on product reliability and dependability, according to Stapleton. "When a resort has thousands of people skiing, technology problems can be devastating," he says. "They use RF/ID-based season passes to ensure that people paid to use the lift. If their proximity readers malfunction, the resorts could lose money by not being able to read the lift passes."
Using software called PC Anywhere, Lasergate remotely "dials in" to customers' systems when problems occur. This allows the VAR to correct problems promptly.
As a result of recent meetings with its users, Lasergate has gotten valuable feedback from resorts, such as:
- The importance of "cash-less" transactions - Most skiers don't like to carry money. As a result, Lasergate Systems configured the RF/ID-based passes so skiers also can use them as debit cards. This allows skiers to have cash-less transactions.
Because the passes have magnetic (mag) stripes on the backs, they can be swiped through mag stripe readers when the card holder wants to pay for a meal or purchase clothing. Skiers first have to give the resort a credit card number before they can use the season pass card as a debit card. Though the card's balance gradually declines, skiers can increase its balance at any time.
- The importance of maximizing skiing time - Resorts have strived to reduce the amount of time skiers have to wait to "hit the slopes." In the past, skiers have waited up to an hour to buy lift passes.
Sunday River Ski Resort purchased the RF/ID cards partially so it could allow skiers to bypass long waits at ticket windows. Skiers can request that an RF/ID card be mailed to them prior to the season. By giving the resort a credit card number, the skier authorizes the resort to bill their credit card each time they ski. (The RF/ID card would be read whenever the skier used a lift.)
"Ski resorts have the potential to be a big market for RF/ID," Stapleton concludes. "Once resorts start to see the benefits their competitors are realizing, they're going feel compelled to adopt RF/ID."