When people come to us with questions about our event rental systems, they are often very excited about the range of capabilities. We use industrial grade hardware with hand-picked, easy-to-use software, and we program everything weighing our customers needs with our decades of experience. Occasionally we’ll have someone tell us they can get a system for less than we’re charging. I always agree with them because I know it’s true (on the front end). This is where we need to look at both cost and value. Let’s look a little deeper at those savings with a real-life example.
The Basic Parameters
For one comlete unit using our Special Event System, the price is around $270. That includes the terminal, printer, drawer, and chip card processing device plus online reporting. One could find a similar set of hardware components elsewhere for approximately $150. Feel free to check my math here, but so far, the other system looks like it will save you $120 per unit.
The Event Variables
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The sample event is a two-day music festival, and requires 40 points of sale used at the concession stands. That’s an inital savings of $4,800. That’s a lot of money, nobody would deny that.
For a two-day event, we are looking at an average of 20 hours of selling. According to data taken from events over the last 3 years, the average transaction amount at a festival is $10.91.
The Real Cost
Our custom-designed systems realistically get 5-9 more people per hour through the line at each terminal than other, off-the-shelf systems.
Let's look at two cases. The first will use the ridiculously low number of just 2 more people through the line per hour. The second uses higher, but still very attainable goal of 7 extra customers per hour. Here is the Math:
Option 1: $10.91 per sale X 2 Sales/hr X 20 Hours X 40 terminals = $17,456 extra income
Option 2: $10.91 per sale X 7 Sales/hr X 20 Hours X 40 terminals = $61,096 extra income
The additional revenue gained from option 1 (which was the extremely conservative) not only pays for the difference in initial cost, but more than covers the entire system rental. The more likely number, using the typical 7 more transaction per hour found in option 2, is over $61,000.00 in additional revenue. That means the $4,800.00 they thought they saved, actually cost them $56,200.00. At Harvard Business School, I believe they refer to that as a negative return on investment.
For more information about how a specifically designed system can impact your event, contact us to set up a free, no-hassle event analysis.