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I need to increase profits in both of my kiosks and will share my plan with you. After playing around with all the numbers while writing the last set of DVD Rental Kiosk posts I realized things had to change. My kiosks were paying the bills but definitely not lining my pockets.
The two ways that my kiosk can earn its keep is to increase rental income and increase advertising revenue. Recently I increased the price of a daily rental from $ 1.79 to $ 1.99 so another increase is not optimal right now. What I need is more people renting movies daily. I currently only have seven to eight rentals on average and am looking to get that number up significantly. Somewhere around twelve a night per kiosk would be a good start and is my six month goal.
To help me meet this goal of twelve rentals a night I am starting an advertising campaign. In this rural area
there is only one community shopper circular that everyone is familiar with. I have designed a large ad that I plan to start running this week and will replace it with a smaller (and cheaper) ad early next month. Here you can see the two ads I am planning to run. The large ads size in the paper is 2 columns x 6 inches and the smaller ad is 2 columns x 3 inches. I simple reduced them for this website.
To cover the cost associated with running the ads I will have to rent an additional five movies a night in each of my kiosks. This brings the total each night to seventeen. Well, at first it is not since I am just above seven right now. My plan is to run the large ad for two weeks and then start using the smaller and cheaper ad. With the smaller ad I only have to rent an additional 2.5 movies each night to cover expenses. That is certainly manageable.
In order to let the local ‘potential’ customers in the area know I am here I am going to place coupons in some of the local restaurants and convenience stores. Some of the coupons will be for a dollar off movie rentals with others making the first night completely free.
I am also going to attempt to attract advertisers of my own. The kiosk that I operate has several slots on both side of the machine that are just prime spots for would-be advertisers. This part of my plan will have to hold for a bit as I do need to get the rental performance up just a tad. When the average rentals per night reaches ten or twelve I will make a push to increase advertising income. I will do so with signage on the kiosk and with fliers circulated to local businesses.
With this two prong marketing strategy I do think rentals per night will increase. Will they increase according to my expectations? I hope so as twelve rentals a night at both locations would be a marked improvement. The sky is the limit right now as there is little competition with many eager customers.
Please let me know what successes and failures you have had marketing items of this nature. Any ideas, comments, or questions are welcome as well.
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5 responses so far ↓
1 dondene // Jun 29, 2008 at 4:45 am
if your average rental nights are 1.79, it is considered very high late rate.
nation wide average late return is around 25% .
so, why don’t you take advantage of it?
i would focus on late fees.
this is my logic.
let’s say more than 50% of your stocks are staying at your kiosk every night, why don’t I let them rented out for free and collect late fees?
oh, well not all of them, certainly.
i will do promotions like rent 2 and get 3rd rental for free. this will encourage a customer to pay extra $1.99 to grab 2 more movies, but some of them will return movies with late fees!!!! ^_______^
2 Shawn // Jun 30, 2008 at 9:41 pm
I like your idea. I wish it were a little easier to manage on my kiosk though. In order for me to execute anything invovling a free movie at some point I have to be in personal contact with the renter. Not to say that there will not be sacrifices to build up my rental base but am not sure I want renters calling me at all hours. Are you able to effectively manage such a campain on your machines? Thanks again.
3 dondene // Jul 1, 2008 at 1:59 pm
dear Shawn.
i do not own kiosk right now, i run a local video store in CA, but i am giving my thoughts to see if this kiosk business is really worth the try. that’s why i am following your posts, and trying to give my thoughts to your strategies based on my experience while i get as much second hand information from you. if my inputs help your business abit, i will have my confidence about this business model.
so, when you have some ideas, or questions about video rental, ask me. i will give you my thoughts.
you can either email me, or can make ‘question’ section at the very end of your posts, or we can do it by posting comments at each of your post.
thanks.
4 dondene // Jul 1, 2008 at 2:06 pm
about free rental…
you said the software can’t accommodate free rental, that’s sad.
how does your machine charge fees though?
cash? credit card? or member card?
any way you can charge back to customers’ accounts after you review the charges?
or anyway the machine accept coupons?
if it takes coupons, can you set up the machine to spit out a free rental coupon when a customer rents more than 2 movies?
5 Shawn // Jul 3, 2008 at 7:57 pm
The kiosk does allow coupon codes for rentals but nothing as sophisticated as the buy 2 and get 1 free. Basically I can grant a buck off the rental or give a first night free. I am not really sure the kiosk even allow coupons on purchases. I’ll check on that.
Anyway, in order for me to set it up I would have the customer call me and after verifying they have purchased 2 movies I would grant them a 3rd (if the machine issues code for purchases)
Thanks again for your insight.
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