I recently asked my LinkedIn network what KPI’s, besides revenue, they use for their entertainment venue analysis.
I figured this would be a tough question because I removed the most prevalent answer when it comes to venue management analysis – revenue generation. I wanted to omit the low-hanging fruit to force my network to consider other Key Performance Indicators regarding their entertainment space and how valuable they can be.
For those who do not understand what KPI’s are. Here is a quick and simple breakdown from Investopedia. According to their site. “Key performance indicators (KPI) are a set of quantifiable measures that a company uses to gauge its performance over time. These metrics are used to determine a company’s progress in achieving its strategic and operational goals, and also to compare a company’s finances and performance against other businesses within its industry.”
The revenue metrics are the most important and fairly easy to digest in regards to entertainment booking. If you book a band and they sell out the venue. That is a positive KPI. Just remember, if you are in charge of assigning revenue metrics you should include ancillary income such as food and drink sales. I have seen many situations where one act didn’t sell out the room but brought in a demographic that drank the house dry resulting in an overall larger return on investment.
Key Performance Indicators go beyond just revenue-generating metrics. Better institutions will assign them to other areas of the business eco-system such as cost reduction, process improvements, and customer satisfaction. All of these variables work off of one another and when assigned properly and analyzed consistently can lead to exponential growth. Here are a few suggestions of non-revenue generating KPI’s to consider for an entertainment venue.
Cost Reduction: Is the venue overstaffed? Are your performance hours not in-line with your demographic (e.g. does the room die at 11:00 pm, but you are paying entertainment and employees to be on-site until 2:00 am)?
Process Improvement: Are you getting your guests in fast enough and moving them to areas of revenue such as the bar efficiently?
Customer Satisfaction: Are you monitoring the social chatter regarding your venue? Are the reviews of your entertainment, venue, and operations positive? Are you surveying past customers to learn about their experiences to share with your team?
*BONUS – Employee Satisfaction: Are you talking to your team to see if THEY are happy? Do you survey guests regarding their experience with specific employees through analysis such as Net Promoter Scores and satisfaction surveys?
These are just a few suggestions regarding non-revenue KPI’s you can adapt for your entertainment venue. Just remember each business environment is different and you may have to tweak your analysis to uncover your areas of weakness and opportunity. If you would like some help analyzing your entertainment venue, give me a shout.