How to turn digital signage into direct revenue

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MGM Resorts International’s VP multimedia and guest technology Randy Dearborn reveals how boutique hotels can learn from the Vegas big boys when it comes to turning digital signage into direct revenue

Randy Dearborn oversees multimedia and guest technology across MGM Resorts International’s 40,000-plus guest rooms, 350 restaurants, three million square feet of convention space, 450 retail outlets, 14 showrooms and two arenas in the US.

Having previously developed technology at Disney, Marriott International and Four Seasons Hotels and Resorts, Dearborn believes that boutique hotels can also benefit from some of the tactics he uses at the 5000-room giants on the vibrant Las Vegas Strip.

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Within Dearborn’s huge remit at MGM are around 50,000 digital signs ranging from seven-inch screens on the casino floor to 260ft-high video walls. He says that developed properly, digital signage can lead to direct revenue regardless of the size of your hotel.

Viva Vegas-style video walls
Speaking to Boutique Hotelier ahead of the Hospitality Technology Europe show in London this month — where he is a guest speaker — Dearborn recalls the development of a video wall in the lobby of the more than 5000-key MGM Grand Hotel two years ago as an example of a digital-signage project that exceeded even his own expectations, and one that could be scaled down to suit your operation.

“We gave one of the huge video walls a Twitter handle to engage people and give them something interactive to do while they’re standing there and waiting to check in. Remember this is a 5000-plus room hotel, so I’m trying to distract people from the fact that they’ve just stood in a queue for 20 minutes,” Dearborn begins.

“I was overwhelmed by the number of hits we get on this thing. We craft a lot of the content based on what’s happening in town. If there’s a fight on, we will ask our followers to vote on it, we’ll also tailor content to holidays.

“I’ll never forget when we first turned on the video wall with the Twitter feed; it was New Year’s Eve. The head of hotel operations called me in a panic; he said ‘turn the wall off, Randy. Three guests have complained about one of the front-desk attendants; they’ve Tweeted her name and said she’s extremely rude and slow and it’s on display right behind her’.

“I said ‘leave it on! It’s the best human-resources tool you have ever had’. So that was one thing I hadn’t anticipated,” says Dearborn.

“The second surprise was the instant-marketing potential. The property’s outlets will use it to run last-minute promotions. Then there’s sponsorship. The liquor distributors will pay me big dollars to push Guinness or Skyy Vodka on the video wall on a Friday night and people will be ordering those drinks at my venues, so I’ll be making money at both stops.

“On New Year’s Eve 2013 we had an Omega watch countdown on the screen to drive some revenue.

“Later in the day, the video screens will display music videos or something suited to the property to create a good atmosphere,” he adds.

The initial investment for the MGM Grand Hotel video-wall project was around $500,000 including structural works for the installation, and Dearborn expected to see ROI within 24 months, but as new revenue streams came to light he did it in 14 months and continues to reap the rewards today.

Asked whether a similar initiative cold work in a boutique hotel, Randy says ‘yes’, but calculating costs and planning content will be crucial to its success.

“The size and scale of the video wall can be whittled down to something affordable, but you must invest in sharp marketing people who know how to fill a missing component in the area.

“The aim could be to drive more bodies to your restaurant when business is particularly light, looking at what could be promoted on the wall to fill that gap, for example. I consider content before I think of software or hardware. We lay everything out on story boards with the goal in mind.

“We’d have millions of dollars worth of unsold show tickets each year, so we started ticket promotions just for guests which they would see when checking in. We’re not broadcasting these to anyone on the street; we’re rewarding our guests with tailored offers,” he explains.

For those boutique hotels that do it well, they’ve got an advantage on MGM Resorts as they are not competing with the sensory overload that is the Las Vegas Strip to draw attention to their all-singing, all-dancing video walls. So you can make a bigger impact on your guest, according to Dearborn.

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A safe bet for menus
Another initiative Dearborn has been rolling out is tablet-based menus.

Around 1000 iPad menus in operation across MGM’s restaurants have led to more intelligent procurement, enabled dynamic pricing for better margins and boosted sales volumes — benefits just as applicable to boutique hotels as they are to the big boys.

“You’re able to track the details of the order on the iPad menus. Typically you’d hand somebody a paper wine menu, they’d flick through and pick out a bottle of wine, but you wouldn’t know how they came to that decision. I now know what wines they’re looking at and what they’re not looking at and we’ve been able to reshuffle our inventory and drive prices down on popular wines,” he explains.

“There is also real estate on the iPad home screen available for advertising. So if I’ve ordered too much wine for an event I can push that inventory on the iPad.”

Just as boutique hotels know their customers, Dearborn knows who’s in town at any particular time and the tablet-based menus enable dynamic pricing so he can tailor the offering to the diner and demand.

“If I know that there’s a convention or a big event in town I can automate my pricing and push them up by a percent or two, there’s a huge value in that. If there’s a consumer electronics show on I know it’s a bunch of tech guys, if it’s a rodeo show they’re cowboys. Knowing who it is that you’re marketing to is a huge advantage,” he says.

A combination of iPads featuring menus with clever content and well-trained waiting staff will enable your restaurant to up-sell items at every course, according to Dearborn.

“Just looking at drinks sales, we’ve had a 35% increase in many venues because now people can look at this incredible photography, touch the image, spin it around, see what’s in the drink,” he says.

But for boutique hoteliers considering splashing out on technology in 2014, Dearborn offers a few words of warning.

“There are costs associated with new technology from now until the end of time, are you able to absorb those costs? Think about what it is you’re trying to do and is it realistic to make ROI on that? Do you have the infrastructure and knowledge base to support it?” he asks.

“When we started doing interactive touch screens several years ago I’d say we need a fourth grader to be able to understand it. I realised I was completely wrong, the fourth grader gets it, it’s the 60 year old that doesn’t. So now I need a 60 year old to understand it.”

And finally, he says there’s a fine line between being cutting edge and being too ahead of your time.

“We’re trying to figure out mobile wallets at the moment, but I don’t want to exert too much time on this. Let’s wait until the big retailers figure it out and we’ll adapt once the consumer is familiar with it,” Dearborn asserts.
 

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