Payments

09:30 AM
Paul McMeekin
Paul McMeekin
Commentary
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The Cinema: A Place of Payments Innovation?

How to maximize value for the customer with the innovations happening in payments today.

When was the last time you had a surprisingly good customer experience? Mine was last night at the cinema. To give you the context, I have not been to a theater in almost two years (hey, I'm busy). The last time I went to the movies, the floor was sticky, the popcorn was cold, and the overall experience felt like a big ripoff after I spent at least $30. If things didn't change/improve, this particular cinema was going to go the way of the record store.

Fast-forward to the present day: The theater complex has been renovated. My wife convinced me to return to the big screen to see Gone Girl, based at least partially on the idea of a free popcorn and $5 ticket promotion (read: value). The experience was great and seamless. She booked the tickets online and chose our seats, paying an extra $1 for the convenience. When we arrived at the theater, we picked up the tickets from an automated machine in about 30 seconds.

[For more from ACI's Paul McMeekin, check out: Doubling Down on 'Card Not Present' Fraud]

The theater was clean, the seats were comfortable and reclined, the popcorn was hot (and as mentioned, free). Good for me, you say – so what?

Being at the older end of the "millennial" generation, I think I speak for all/most of us in stating we like value for our money (quite the bombshell declaration). Those of us who graduated college sometime between 2004 and 2010 entered the workforce right before or during the worst financial crisis since the Great Depression. We're a little scarred and a little jaded, and we don't like feeling ripped off. Remember the backlash against the $5 checking account fees?

On the flip side, Netflix and Hulu Plus subscriptions are soaring, because the companies are providing relevant content to my generation and others. How long will it be until ESPN cuts out the middle men and taps into the nearly 3 million broadband customers who don't have cable?

What does this have to do with payments? Everything. After my experience at the cinema, I started thinking about how the complex could make the experience even better with technology that exists today. What if the ticket could be delivered to the phone and scanned when you get to the theater? Instead of rewards such as free popcorn being delivered to the inbox, what if they came to the phone on an app that could be used at the POS via NFC?

What about using real-time analytics to offer flash sales? Could the movie complex use new pricing strategies? If a movie is not sold out the day of the event, could variable or discounted pricing start at 9:00 a.m. (a la StubHub or airlines)? Chances are, the next time you sit down on an airplane, you will not have paid the same price as the guy next to you. Could (or, rather, couldn't) theaters take this approach to maximize revenue?

Building a true picture of the consumer would need to happen. What are their likes? What would really incentivize them to come to the movies more frequently than once every 18 months? How much are they likely to spend there? Which customer(s) will likely bring a friend and maximize revenue? How can the theater provide value to the consumer? There are already bars, restaurants, and in-theater dining. What's next? Fully licensed on-site day care? Well, let's not get crazy.

Commerce and payments are all about creating value, particularly for millennials. To create value, you need to understand your customers. What do you know about your customers? How often do they visit the branch (or do they even visit)? How often do they go online to make a payment? How do they receive (and pay) their bills? How can you cross-sell to them? How can they be Net Promoters?

As for the movie Gone Girl, I would highly recommend it.

Paul McMeekin is a big believer in the power of payments and how electronic payments can change the world. He currently heads up the business intelligence and market research function at ACI, a large global payment software provider. Previous roles at ACI include product ... View Full Bio

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Becca L
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Becca L,
User Rank: Author
11/30/2014 | 11:49:26 PM
Re: Movie Magic
Jon, i think you're right that transparency is key. Consumers get paranoid about sharing information but if they believe it's in their best interest (ex: promotions) and that the firm won't be selling it without their knowledge, then I think we can all feel we're making informed decisions, and that's a step towards forming a trusting relationship, right?

Just borrowed the Gone Girl book, very excited to dive in.
Kelly22
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Kelly22,
User Rank: Author
11/20/2014 | 1:53:24 PM
Re: Movie Magic
Good point, all the recent data breaches will probably cause many customers to think twice - and we definitely haven't seen the last of them. Knowing their data is protected will help people feel safer about sharing information.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/20/2014 | 11:59:30 AM
Re: Movie Magic
That's true, but I also think there has to be information provided to customers on how their data will be protected and when it will be shared to others. I think as time goes on, and the data breaches pile up, that will be needed on top of offering perks for data.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/20/2014 | 11:02:38 AM
Re: Movie Magic
Yeah I agree that that opt-in ability and transparency is key. People need to feel like they have some kind of control over their personal data. Given the current environment, I think companies that offer that control will stand out. That's one thing that stood out about ApplePay: "We will never reveal your card data during the transaction."
Kelly22
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Kelly22,
User Rank: Author
11/20/2014 | 11:00:40 AM
Re: Movie Magic
Personally, I'd be happy to share data with a movie theater if it resulted in cheaper tickets or a better experience. To Jon's point, I can see why customers might be wary of sharing personal information, but I also think in general, people are becoming more willing to provide data in exchange for perks or discounts.


Also, glad to hear a good review of Gone Girl - I just finished the book and can't wait to see the film.
paulmcmeekinACI
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paulmcmeekinACI,
User Rank: Apprentice
11/19/2014 | 4:35:36 PM
Re: Movie Magic
Thanks Jonathan...I think big data falls into two camps -

1. The big brother style data which is collected without us fully knowing (Google, Facebook, NSA) what we are signing up for. I think in the coming years we will see a backlash against this, probably starting with some regulations in Europe!

2. Opt-in to big data for personal benefit or long term trends studies.  If I share my data with a health company to get better rates I would, if I share my prefrences with a movie complex to get a better experience/cheaper tickets I would.

Would be interested in the thoughts of others...
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
11/17/2014 | 4:43:07 PM
Movie Magic
Thanks for the article Paul (and the movie recommendation). I'd definitely be a big supporter of flash sales at the movie theater. It'll be interesting to see though how consumers' preferences around data privacy play evolve over the next few years and play into this. Will consumers want organizations to have the data that would be needed to design a personalized experience like you say? Organizations are going to have ot be really good at delivering real value while also making customers feel like their data is in safe hands.
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