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Wednesday, July 23, 2008

Salt In My Wounds - Another Charge at the Movie Theater

A night out at the movies is never inexpensive, but I've noticed that ticket and concession prices have been slowly creeping up where I live.

On Sunday, my husband and I went to see The Dark Night (excellent!) and as I stood at the concession stand, I experienced an outrage the likes of Harvey Dent's (If you've not seen the movie, you won't understand that reference).

I'm a popcorn fiend. I can't go to the movies without getting me a bag, and I love to add a generous dash of flavored salt to my popcorn. That's one of the reasons I've always loved the Palladium Cinemas in High Point, N.C. They have a salt and butter bar. (Unhealthy, I know, but such a treat!)

The Palladium and its parent company, Consolidated Theaters, were recently sold to Regal Cinemas. And in the tradition of big businesses everywhere, Regal has made some not-so customer-friendly changes.

Flavored salt is no longer free! If you want to add some white cheddar or nacho flavor to your popcorn, you have to pay $1.50 for your own personal bottle of salt. Such a ripoff, in my opinion. And my movie buddies who I've told about this seem to agree.

As a former business reporter, I understand the economics of the decision to charge for salt. Movie theaters make very little money from ticket sales; that cash goes to the studios, production companies and distributors.

So, the concession stand is the profit center of any first-run movie theater. That's why a 16-ounce soda costs $4 (or more.) That's why if you ask for a cup of water, many theaters will charge your the price of a soft drink. That's why M&Ms are $3.50 (or more) a box. And it seems like sizes are shrinking as prices increase.

The business reporter in me understands the profit motives. But as a consumer, I think nickel and diming your customers is a bad idea. I'm not inclined to go to this movie theater anymore, and if I do, I certainly won't be buying their overpriced salt and other concessions.

It's interesting to note that the Palladium used to be our favorite movie theater. It's not the cheapest theater in town or the closest theater to our house. But we'd go there more often than not because in our mind it was the "nicest." And part of the reason we (or rather I) deemed it the nicest was because of the popcorn amenities. No other theater in town offer the combo of a flavored salt-and-butter bar. And that just made the movies for me. But now that salt is no longer free, I don't feel the same way.

I'd much rather drive in the other direction to The Grand Theatre Four Seasons Station, another new theater in town, where ticket prices are $1.50 cheaper and the popcorn's just as good. (They don't have flavored salt, but I can always bring a shaker in my purse.)

In the grand scheme of things, I acknowledge that $1.50 isn't much to add to an already expensive movie night outing. But for me, that was the final straw. I'm tired of businesses overcharging for goods and services and eeking out profits on the backs of their customers. In my mind, that's a terrible way to do business and successful, customer-focused customers agree with that.

As some of my regular blog readers probably know, I write business books when I'm not busy saving money. And one of the things I've learned in researching great brands and great companies is that you need to appreciate your customers, not take advantage of them, if you want to be successful.

When I was writing about Build-A-Bear Workshop, CEO and founder Maxine Clark taught me that great companies learn how to "turn no into yes" to dazzle their customers. I figure Regal Cinemas could learn something from Maxine. A lot, actualy!

At Build-A-Bear, kids sometimes bring in their beloved and battered stuffed animals and ask if they can get them restuffed (or at least plumped up.) At Build-A-Bear, the answer is always yes -- even if that stuffed animal was purchased elswhere.

Such a small gesture generates tremendous goodwill for Build-A-Bear Workshop because potential customers remember the kindness and are more likely to return to that store and buy something because they were treated fairly.

Nordstrom has a similar approach. You can return a purchase to Nordstrom at any time, no questions asked, even if you don't have a receipt. One story (probably an urban legend) has it that a Nordstrom store gave a customer a refund for tires, even though Nordstrom doesn't sell tires! And if you're ever in a Nordstrom store and can't find what you're looking for, a sales associate will search the chain's entire inventory and offer to ship the item to your doorstep for just $5. It's important to Nordstrom management that customers don't leave emptyhanded or disappointed.

I didn't leave the Palladium with those same warm and fuzzy feelings I have when I shop at Build-A-Bear or Nordstrom. I felt taken advantage of. I was upset because I had to buy salt. I was upset because ticket prices had gone up 50 cents from our last visit. I was upset because I felt undervalued as a customer.

I'd venture to say that this new charge will cost Regal Cinemas more than free flavored salt ever did. First, there's the bad word-of-mouth. (I'm blogging about this, for goodness sake, and I bet other moviegoers will also complain about the new charge.)

More importantly, though, the movie theater's customers are going to become fed up with all the extra charges. And they'll take their business elsewhere or else they will sneak in snacks from home to avoid paying exorbitant concession stand prices.

In our household, we probably go to the movies at least once a month -- and sometimes more. If we stop going to the Palladium and other Regal-owned theaters, the company will lose at least $240 in ticket revenues from us; add in concessions and that figure doubles.

One family changing their movie-going habits won't make much of a difference. But what if 10 families change theirs as well? Or 100? Or 200?The lost revenues quickly add up: $500, $5,000, $50,000, $100,000.

Now, that's a little salt rubbed into the wound.

3 comments:

  1. We've gone to the movies 3 times in the last two weeks, and I about died at the higher prices for the stuff - and like you I choked when I saw they were charging $1.50 for little salt shakers!

    And half the prices weren't even posted - how clever of them - they figure you won't even ask, just order!

    At least the seats were super comfy at our Regal.

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  2. Amen Sister Amen!!! You stated the what is so obvious to us but doesn't ever seem obvious to corporations - that it's the little things that make customers keep coming back. And you stated it sooooo well.

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  3. Many communities have a second-run movie theater. These theaters offer a less expensive option for a night out at the movies.

    Here in Greensboro, for example, there's the Sedgefield Crossing, which shows movies that have just left the regular theaters (meaning they are generally 2-4 months old). But admission is only $2.50 and concessions are considerably cheaper, too.

    Now, these theaters don't have the frills of the modern megaplexes. Most, like the Sedgefield Crossing, are older movie theaters that went out of business and were reopened as second-run theaters. You probably won't find stadium seating or a wine bar. But you can find a good bargain, particularly for a family night at the movies.

    Another cheap movie option can be your local library or colleges and universities. You may have to do some investigating, but many colleges and libraries have movie nights. Often, these shows are open to the public for little or no charge.

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