THE FINANCIAL BENEFITS OF A RECREATION MANAGEMENT SOLUTION PARKS & RECREATION

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1 THE FINANCIAL BENEFITS OF A RECREATION MANAGEMENT SOLUTION PARKS & RECREATION

2 In This Whitepaper: + + Existing Challenges + + Improve Operations Management + + Improve Participation + + Improve Data Insights + + Reduce Total Cost of Ownership + + How it All Adds Up Introduction Offering new and dynamic programs to a broad reach of the community can be a daunting task for Parks & Recreation departments facing budget cuts. Often, out-ofdate recreation management software can get in the way of providing new services, as well. Without modern systems, Parks & Recreation department staff find themselves burdened to find the time for registration, reservations, on-site check-ins and facility scheduling, rather than focusing on improving programs and community outreach. ACTIVE Network, a leader in registration and recreation management technology, worked with Hobson & Company, a third-party research firm, to explore these challenges and learn how industry leaders are responding. Independent research, consisting of nine in-depth interviews with ACTIVE Net Parks & Recreation customers, found that a modern recreation management solution addresses customer constraints across an organization to deliver a quick and compelling return on investment (ROI). The goal of this research study and paper is to highlight examples of universal benefits where the impact of this recreation management solution is not only strategic and timely, but also measurable, based on key motivating metrics validated with existing customers of ACTIVE Net.

3 Challenges Parks & Recreation customers interviewed for this research study noted that despite their current management approach, whether using older generation recreation management technology or a manual solution, key challenges persisted across the organization in areas including operations management, driving participation, capturing data insight and minimizing total cost of ownership. Below is a list of some of the most universal concerns. With ACTIVE Net, staff can repurpose their time and spend more time supervising programs. Director of Community Services, City Parks & Rec Department OPERATIONS MANAGEMENT: Inefficient operations can actually harm the recreational experience of participants. Customers interviewed for this study cited cumbersome processes in managing registrations, facility rentals, and memberships which impacted the users perception of the organization. Parks & Rec staff had difficulties accessing participant and member data for routine general inquiries, and spent much of their time looking for information rather than servicing the participants. PARTICIPATION: A well-run organization is the first step to improving participation, but the Parks & Rec customers cited many challenges to that goal. The lack of an online experience and a social media presence were significant barriers to participation, especially among younger members of the community. DATA INSIGHT: The inability to access current and past program and membership data to understand participant interests was cited as a challenge for many of the customers interviewed. Customers craved richer insight around overall facility utilization as well as which classes were successful and had wait lists. TOTAL COSTS OF OWNERSHIP: Parks & Rec departments generally have limited staff and financial resources. Those interviewed cited managing technology and credit card payment process outside the Cloud, and maintaining expensive servers as main concerns. They also found the process of maintaining PCI compliance to ensure all credit card information is secure to be costly and time-consuming.

4 ACTIVE Net: Improve Operations Management IMPROVE STAFF EFFICIENCY MANAGING REGISTRATION AND FACILITY BOOKINGS: ACTIVE Net facilitates participant registration and facility bookings with a system that allows staff to view up-to-date program information and availability. Parks & Rec managers liked having a central view of customers and reservations and the ability to manage registrations, private lessons, withdrawals and waiting lists. On average, customers were able to decrease the time required to manage registrations and bookings by 20%. Front desk staff was reduced and the remaining staff saved many hours during the day, which they could subsequently use to focus on managing program operations. INCREASE REVENUE AND IMPROVE PRODUCTIVITY WITH AUTOMATED REVENUE SYSTEMS: Managers interviewed for the study liked that with ACTIVE Net, all cash handling is integrated so managers can see who is logged in and what transactions have been processed, thereby reducing theft. This was especially important for those organizations with cashiers at park entrances and front desk staff who managed cash for miscellaneous POS items such as food and drinks. ACTIVE Net customers saw a 5% reduction in time spent cash handling and a 2% increase in cash payments (reduction of loss) when using ACTIVE Net. ACTIVE Net customers cited a number of specific operations management improvements including: + + Reduced front desk staff by two FTE + + Improved staff efficiency by 25% + + Save ½ hour per cashier, per day for 11 cashiers + + Increased memberships by $10K using auto-renewal + + Now, we can pull out specific groups of people (i.e. Female, aged 30-50, took a spinning class) and send them an about future classes or events. (Systems Coordinator, City Parks & Recreation Department) Managing credit cards was an issue for many of the organizations because rerunning expired cards, re-attempts and performing reconciliations at the end of the day was time-consuming. With ACTIVE Net, the auto draft feature updates expired credit cards and the Reattempt Failed Payment feature automatically retries failed accounts, leading to a 2% increase in the overall revenue to the organization. IMPROVE STAFF EFFICIENCY COMMUNICATING WITH PARTICIPANTS: Many organizations were unable to keep participants informed about upcoming activities, canceled classes and changes to permits because they didn t have the staff to devote the time for manual notification, or their previous system didn t allow for automated communications. AC TIVE Net users stated that they are now able to send automated s or texts to any identified category of users. For example, if the pool was going to be closed for maintenance, an automated could let all pool pass holders know. Communication that used to be either impossible or extremely timeconsuming is accomplished in minutes with ACTIVE Net.

5 ACTIVE Net: Improve Participation INCREASED PARTICIPATION WITH ONLINE REGISTRATION AND FACILITY RESERVATION: With participants increasingly becoming more tech savvy, having an online registration component for activities and facility usage was an important factor mentioned by the Parks & Rec departments interviewed for this study. Rather than having to fill out paperwork or register in person, most participants preferred to use ACTIVE Net s selfservice feature to register on their own, whenever and wherever they wanted. ACTIVE Net allows participants to view and book programs and facilities online. All activities, programs and facilities are housed in a single system. As a result, the customers interviewed saw an average of a 5% improvement in overall participant registrations for facilities and registrations. INCREASE PARTICIPATION USING SOCIAL MEDIA: Managers mentioned that the use of ACTIVE Net s Communication tool would greatly impact their community reach and enable them to compete with private organizations through the use of social media. ACTIVE Net customers cited a number of specific participation improvements, including: + + Pool revenue increased 10-11% % online registrations led to 6% increase in participation + + More than doubled the amount of park permits issued + + We published our 5K event on the ACTIVE.com site and there were more participants as a result. Publishing on Twitter and Facebook has helped us reach people we never would have been able to touch before and represents an additional revenue stream for us. (SVP Technology) ACTIVE Net s Communication tool allows for targeting of specific segments of the population. s are collected to better communicate with entire populations, and a user can share information with friends using many social media integration tools (i.e. Twitter, Facebook, etc.). Some features of ACTIVE Net s Communication tool include: + + marketing campaigns to distribute information to members + + Personalized push notifications for automatic membership renewal + + Recruitment of former participants based on past participation or interest lists + + Integration with ACTIVE.com and ACTIVEkids. Using ACTIVE Net s social media features produced at least a 1% impact on additional registrations for the customers interviewed.

6 ACTIVE Net: Improve Data Insight and Reduce Total Cost of Ownership IMPROVE ACTIVITY/PROGRAM/FACILITY REVENUE WITH BETTER DATA INSIGHT: Gaining access and insight into current facility usage, programs and activities in order to ensure the right activities are reaching as much of the community as possible was considered difficult with many organizations previous recreation management reporting systems. They found that using ACTIVE Net s automated reports allowed them to make better-informed decisions. Managers had access to numerous reports including revenue by program, wait lists, reservations, deposits, payments and refunds. They were able to review real-time reporting to help increase utilization rates. On average, customers were able to adjust programs and policies to increase revenue by 2% as a result of this better data insight. REDUCE COSTS TO MANAGE IT INFRASTRUCTURE: ACTIVE Net is a SaaS model that is managed through one user-friendly system. Customers access the system via the Internet or mobile device, and updates are pushed automatically, saving customers the time and cost of managing their own recreation management software. Customers reported a 25% time-savings in managing their current IT solution and a 100% reduction in the cost of database and webservers. ACTIVE Net customers cited a number of specific data insight and reduced TCO benefits, including: + + Management reports allow managers to identify activities and programs that are running a deficit and actively promote programs to get more participants. (Assistant Facilities Manager, City Parks & Rec) + + Saved ten hours per week for each of 10 programmers, 25% efficiency gain + + Saved $14K by eliminating the cost of new servers every three years + + Saved $30K - $40K/year on PCI compliance costs REDUCE PCI COMPLIANCE COSTS: For any organization accepting credit cards, PCI compliance is a requirement. To be at the minimum PCI compliance level, an organization must adhere to twelve major steps. Customers noted that it is time-consuming, difficult and expensive to meet these standards on their own. It was much easier to use ACTIVE Net since it is PCI Level 1-compliant. The PCI infrastructure is 100% owned by ACTIVE Network and reduces overall compliance costs by 75% by saving time to run credit card transactions and draft reports, and by eliminating the cost of upgrading all computers to be in compliance.

7 How it All Adds Up The value of ACTIVE s recreation management solution is immediate and demonstrable. A sample Parks & Rec department with $1m in revenue managed by ACTIVE Net, four registration and facility staff, five membership management staff, processing $500,000 annually through credit cards and spending $30,000 per year on PCI can realize annual benefits over $150,000 per year from an investment in ACTIVE Net. For this sample Parks & Rec department, the three-year investment totaling $196,000 generates a positive return in 9.1 months. The three-year-net present value (NPV) and return on investment (ROI) are strong at $177,000 and 112%, respectively. The key financial metrics for the sample organization were calculated by standard methods and are shown below. The NPV calculation assumes a 10% cost of capital. The chart below shows the extent to which each benefit contributes to the total value of the ACTIVE Net solution. For the sample Parks & Rec department, the benefits reach broadly across the organization. About ACTIVE Net: ACTIVE Network is the leader in Activity and Participant Management and data solutions powering over 47,000 customers worldwide with SaaS technology that streamlines activity and event administration. Our enterprise-level ACTIVEWorks cloud platform, combined with our business intelligence tools, make managing and operating all types of activities, events and organizations smarter and more efficient. ACTIVE Network was founded in 1999 and has offices worldwide. For more information, visit: activenetwork.com or follow us on 2.3% others 2.8% reduce IT time managing solution 3.8% improve staff efficiency managing membership 6.6% increase participation using social media 10.3% increase revenue and improve productivity with automated renenue systems 12% improve staff efficiency managing registrations and facility bookings 33.9% increase participant registrations due to online bookings for facilities and registrations 15.1% improves staff efficiency communicating with participants 13.2% improve activity/ program/facility revenue with better data insight About Hobson & Co.: Hobson & Company helps technology vendors and purchasers uncover, quantify and validate the key sources of value driving the adoption of new and emerging technologies. Our focus on robust validation has helped many technology purchasers more objectively evaluate the underlying business case of a new technology, while better understanding which vendors best deliver against the key value drivers. Our well-researched, yet easy-to-use ROI and TCO tools have also helped many technology companies better position and justify their unique value proposition. For more information, please visit GET STARTED Learn more about ACTIVE Net communities@activenetwork.com ACTIVEnetwork.com/active-net