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How 'Gaming' the System Helped This Business Get T…

In this series, The Fix, Entrepreneur Associate Editor Lydia Belanger shares her conversations with founders and executives whose solutions to inefficiencies can inspire others to find new ways to save themselves time, money or hassle. 

Sometimes it’s busy, sometimes it’s slow. Such is the nature of running nearly any kind of business. Off-season lulls seem to drag on forever, and bad weather causes customers to change their plans and spend their dollars elsewhere.

Simply offering a coupon, sale, matinee price or happy hour doesn’t always cut it. Even dynamic, demand-based pricing (think: fluctuating hotel and flight prices or Uber surge pricing), which has been around for years, doesn’t always solve the challenge many companies face luring customers amid the doldrums.

Business owners are constantly looking for innovative solutions to excite customers, such as gamification. Promotional games have clear actions and rewards for users, contain elements of chance and mystery or could even feature a social component.  

Game design varies based on industry and depends on the target customer and desired behavior. In experimenting with gamification, some are seeing some great results, including Scott Parker.

In the past five years, Parker has opened four bar-restaurant hybrids in Arlington and Alexandria, Va.: A-Town Bar & Grill, Don Tito, Don Taco and Barley Mac. They’re destinations for the after-work drinking crowd, as well as places for friends to catch up or watch a big game. Parker says he’d been looking for a way to not only fill seats during off-peak hours, but also put his businesses on the map as places to have a bite in addition to an adult beverage.

Related: Why This Restaurant Chain Has Started Using VR to Train Employees

He’d partnered with a couple of discount app startups in the early years, but he didn’t see big returns. Nascent companies would often approach him with a pitch for his restaurants to be among their first test users, which was a difficult sell.

“There are so many apps out there that are trying to launch in restaurants and bars. You really become almost numb to them, because so many people are hitting us up,” Parker says, adding, “And any time you do anything with discounts, it needs to be carefully thought out and understood how it affects all parts of the restaurant, from the service staff needing to know how it works and applying it, to what a reasonable expectation is in how it should perform and, obviously, how it impacts the bottom line.”

That’s why, when Spotluck, a dining discount app that combines dynamic pricing with gamification by spinning a wheel, came knocking two years ago, Parker was skeptical. By that point, however, Spotluck had been around for more than a year and had already gained some traction in the Washington, D.C., area. He decided to give it a spin.

The fix
Spotluck sets itself apart from other discount startups because it employs dynamic pricing. Its premise is that eating at a restaurant on a sunny Friday evening shouldn’t cost the same as eating there on a rainy Tuesday at 2 p.m. when foot traffic is low to nonexistent. Its software offers discounts that fluctuate based on day, time, weather and restaurant occupancy.

“It’s almost like a Hotels.com of restaurants,” Parker says. “People can really bargain shop and they can feel like they’re getting a good deal, it works well for the business and everyone’s happy.”

Users download the free app and have the opportunity to spin a virtual wheel once a day. The wheel lands on a local restaurant and offers a discount up to 35 percent off. Landing on a discount doesn’t guarantee a diner a reservation at that establishment, but to avoid overcrowding, Spotluck is programmed not to drive too many users to one place at one time. Discounts are available on an on-demand basis and cannot be saved — they have to be used during that same day before conditions change. Diners also can’t get the maximum discount at a restaurant if they’ve claimed it in the past, but they can get lower discounts for their subsequent visits.

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