Effective Cinematic Customer Analytics Setting the Scene for Engaging Loyalty Programs

Aug 6, 2013

We’ve all heard the saying that a picture is worth 1000 words. Apparently, pie charts are also effective at getting a message across, which is why a recent First Researchreport on movie theaters sparked my interest.

According to the report, ticket sales accounted for 67% of the industry’s total revenue in 2012 while food and beverage sales made up 21%. The remaining 12% of the revenue pie came from the “other” category. I have to assume that “other” includes loyalty program engagement.

Considering that we’re at the peak of the summer movie season, a time when many look to escape the midday heat or enjoy longer evenings away from home, I was surprised that “loyalty program offerings” didn’t make the cut as a standalone revenue category. What’s more, the report was very light on what I feel will be the primary driver behind the future of movie theater revenue: customer behavior analytics.

Movie theaters are increasingly getting far more information than ever about their customers: their likes, dislikes and long-term desires beyond just knowing favorite movies or genres. This industry has a captive audience, yet lags seriously behind others when it comes to harnessing customer data to provide increased value and unique experiences for every moviegoer. Until the cinema industry does a better job of capturing this data and converting it into useful insights, I fear the “other” category of movie theater revenue will remain a resource waiting to be fully tapped.

Customized Experiences Drive Engaged Customers

In the age of ubiquitous smartphone adoption, the above subhead should seem obvious, but it isn’t. That’s because too few entertainment companies appreciate the importance of customized experiences. But the latest Nielsen report makes this clear: in 2012, smartphone and tablet owners attended 9% and 20% more movies, respectively, than filmgoers without those devices. Social media was also a large driver of that activity, as was the ability to view movie trailers on the go. Going to the movies has always been a social, shared experience. However today, that sharing can occur long before and after the credits roll. It can even be interactive with the movie itself.

That means there is a massive opportunity for brands to act on what customers are telling them at every turn. Optimizing their experience – i.e.,  getting the communications right, calibrating the rewards mix and considering the non-data touchpoints – creates a formidable option for those who are choosing to stay home or pondering other entertainment options.

Traditionally, the cinema industry and third-party loyalty program providers have been held hostage by data inputs such as point-of-sale terminals or computers. Kobie, for instance, has partnered with Allure Global and is now able to customize offers, messaging and experiences wherever the customer is. Whether that is standing in line to be seated before a premiere or walking down a mall corridor on the way to a movie, every customer is different and responds in unique ways. When it comes to rewards, some moviegoers simply want great discounts, asking themselves, “what’s the best deal out there?” Others, however, care more about status and exclusivity: access to the best theater seats, an opportunity to meet actors at a premiere, etc.

A truly optimized program has multiple ways to engage customers in an omnichannel manner, yet each customer feels that they have been uniquely spoken to.

Using Data to Determine a Customer’s Mood

This is the future of cinematic analytics.  Very soon loyalty program providers, theaters and ticket companies will be able to determine how a person feels at the time of a ticket purchase and also how their emotions and buying behaviors are influenced by who they are with (say, a group of friends versus family) and their location. Seeing a movie in a mall is arguably a different experience than going to a specific theater. In a mall, theater rewards can be more easily tied to shopping. At a standalone theater, reward offerings should be narrower in focus. 

Just imagine personalized signage that promotes a different movie or concession combination based on aggregated predictive behaviors. Or envision automatically adjusting the messaging that service personnel use to greet guests based on the types of movies they enjoy. These capabilities – and many more – are literally coming to a theater near you.

Although faced with competition from multiple entertainment channels, changes in viewing preferences and limited consumer leisure time, movie going remains one of the world’s most genuine and shared cultural and emotional experiences. It’s no surprise, then, that consumer spending on entertainment (which includes movie tickets) is forecast to enjoy a 5% compounded annual growth rate over the next four years.

At their core, movies are escapist fun. But the goal of the entertainment industry is very much grounded in reality: how to inspire sales and, ideally, encourage moviegoers to spend on items beyond the ticket price. 

Effective cinematic customer analytics is proving the newest “plot device” capable of achieving that aim.