Play Meter

Issue: 1980 August 15 - Vol 6 Num 15

PLAY METER: What information do you require and
how do you use it to make your operation run efficiently?
ANDERSON: The information I'm looking for is on the
collection tickets we get in daily . They are coded by
location; so when they come in , I can go over them to
keep on top of things. That's when I make my decisions
as far as which machines .have to be pulled out and where
we need to add more machines. We do quite a lot or
rotation , by the way, especially on our flipper games .
PLAY METER: So you're looking for the machines'
earnings, but do you keep track of what each machine
costs you?
ANDERSON: I've found that after all my years in the
business , it's better if I go by some rules of thumb ,
instead. It's pretty hard to say a certain machine should
do a certain amount of money. It might do that in one
location , but at the next location maybe it just doesn't
have the traffic to generate those dollars . So the rule of
thumb I go by is if I don't get a minimum of $25 per week
per machine at my end, that machine isn 't going to stay
there , no matter what .
PLAY METER: Are there any other record keeping
indicators you use to keep track of what is making you
money and what is not?
ANDERSON: Well , with us , everything is on computer;
so once a month I get a printout of what each of my
locations is doing . At that time I can look over the
printout and see what all my locations are doing . That's
when I evaluate locations . When I see that a location has ,
say, three machines and is averaging only $100 per
month per machine , I'm afraid that guy is going to lose
some of his machines, either that or else he's going to
have to find somebody else to do business with .
PLAY METER: But do you really pull yo ur mach ines out
if the location owner balks?
ANDERSON: Yes , I do . A couple of years ago , after a
Notre Dame Seminar in Chicago , I finally came to the
realization that I couldn't afford to be a nice guy like any
longer. I made the move to sixty percent and e ven added
on service charges We now get an awful lot of service
charges , varying from five to ten dollars per week , per
location-before we start counting out for the location
split. And it's worked for me. I just can't afford to be a
nice guy today.
The example I like to use is of a place we'll call Joe's
Bar. Everyone , it seems , has something like this . The
business at Joe's Bar hasn't been what it should be ever
since the plant next door folded up , but you like Joe so
you don't have the heart to pull the machines out. Well,
you can't let the fact that Joe's a nice guy interfere with a
busi ness decision. You should be able to go straight to
Joe and say , "Look, we've been friends for a lot of years ,
but I just can't afford you anymore. Here's the phone
book . There's a lot of competition that could probably do
you a better job than I can because r just can't afford to
put the stuff in here that you deserve. So , rather than put
in some old stuff and make you mad, I'd rather you got
someone else ."
The reason is that if you put older stuff in there you 'll
have a tendency to say to yourself, "I've got three service
calls to make today , and this one here from Joe . But we
don 't get that many plays over there anyway ; so we take
him last. " And then maybe you don't get around to
it at all. That's bad business. What happens when a real
go-getter comes along and buys Joe's place and starts to
work miracles with the place? He's going to see all the
antiquated equipment you put in there, and he's going to
think he doesn 't want that operator in there . So you'll
end up losing the location anyway . That's what happens
when you continue to operate in a place even when you
can't afford to-it reflects badly. on your entire operation.
PLAY METER: When you stopped being a "nice guy"
and started holding the line against locations , what effect
did that have on your operation?
ANDERSON: I started to make some money. We used
to operate way out in some little towns that were 40 or 50
miles away . And we'd have to send a servicemen down
there and while he was there he'd go around to all the
rest of the accounts in that area , just to make sure
Mount St. Helens : A neighbor too near to Anderson, in Portland
10
PLAY METER, August, 1980
everything was working all, right before he started back
because it was such a long way. So I looked at that and
saw where we were losing a serviceman for the entire
day. And I started weighing that against the collection
and saw where all I was doing was furnishing somebody
with a job . I was buying a lot of gctsoline and wearing out
a lot of tires , and the location was making money , but I
wasn't.
That's when I went back to those locations and told
them I would just have to have more money or else I
couldn't afford to do business with them. And I found out
that even when I was making s-ixty percent with these
locations, I still couldn't afford them. So-I got in touch
with another operator in the area , sold him my stuff down
there , and got out of that region.
Anyone can promise
service backup.
But when your top
earning~ game is down,
PLAY METER: From your answer , then , it appears you
do look at more than just your collections . Isn't that right?
ANDERSON: That's right. I look at my overhead . Like
that little route that was way out in the country, I got to
looking at the whole thing and got to thinking that I had
one man devoted to that route down- there . And by the
time I took , the cost of his vehicle , the cost of operating
that vehicle , gas , tires , insurance, his payroll, and the
other fringe benefits, I found out all I was doing was
furnishing him with a job . So , by elirfiinating that route , I
was able to eliminate a vehicle and a person, and I was
able to free up some money to do more good for me
elsewhere. It wasn 't making a penny for me down there.
Lopping off unprofitable locations also had its effect on
the size of my operation , too. At one time I had 49
employees, but now I'm down to 14 in this office ; and
that's counting .. the bookkeeping staff, receptionist ,
everybody. You wouldn't believe it , but my, business is
healthier because of it. The same thing happened for me
with my music business, by the way.
you need
more than l\
a smile and a promise.
PLAY METER: You found the music end to be
unprofitable for you?
·
ANDERSON: Yes , out here the music business kind of
got ruined by operators who went on a stt:_aight rental. For
awhile they thought it was a pretty good idea because
they went in and got so much a week , and that was it.
But then the locations started to complain because fhey
weren't making any money off the jukeboxes because
their help was playing it for free . ·So, consequently, the
rentals just kept getting lower and lower. In fact, there
were some big companies going around offering
ridiculously low rentals.
And the same thing was happening out here with pool
tables . So I just scratched my head and figured her·e again
I wasn 't making any money on it; so I went to this big
operator who was into music and pool but who was very
little into the amusement field as far as videos and
flippers, foosballs and pool. And , all of a sudden , when I phased
that out, I started making some money. By the way, the
.other day I talked with the gentleman who I sold all that
stuff to , and he told me things haven't gotten any better.
It's still a struggle . So I think I make a wise decision.
At first , when I sold all that, I thought this would really
dig into my cash flow, but then I saw where it was kind of
a false deal anyway . It was a tremendous amount of cash
coming in , but it was also a tremendous amount of cash
going out , too . With my cigarette vending machines, for
instance, after all the smoke had cleared, it seemed the
only money I was making in vending was what I was
making in ! oyalty payments.
You Need
C.A. Robinson & Co.
WE'VE BEEN SERVICING OPERATORS'
NEEDS FOR 43 YEARS. NOW, HONESTLY,
DO YOU THINK OPERATORS WOULD STILL
BE COMING BACK IF ALL WE OFFERED
THEM WAS A SM.ILE AND A FALSE
PROMISE?
~
·
OUR UNEXCELLED REPUTATION FOR
SERVICE HAS HELPED KEEP US IN
BUSINESS ALL THESE YEARS.
.FIND OUT, LIKE OTHER OPERATORS HAVE
FOUND OUT FOR 43 YEARS, WHY THERE'S
SUCH A PIG DIFFERENCE.
C.A. Robinson & Co.
PLAY METER: Getting back to your music problems,
you saw the rental as the beginning of the end for the
profitable operation of jukeboxes in your area?
ANDERSON: Well. a lot of operators thought that was
0
2301 WEST PICO BLVD.
LOS ANGELES, CALIFORNIA 90006
(213) 380-1160
PLAY METER, August, 1980
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