With the UK now under tight restrictions and lockdown measures you’ve likely either settled into an online timetable of activities for customers or you’re focused on supporting your own children studying from home. Many of you will be doing both.
Whichever camp you fall into, we hope it’s going well.
We’ve spoke recently about our infinite hope for the children’s activities sector and how you haven’t come this far to stop now. If you’re feeling a little low on motivation or optimism, we’ve had some really great feedback on those articles so if you’ve got a few spare minutes, give them a read.
Today though, we want to talk about business/sector trends in 2021 we believe providers need to be aware of, and as the title suggests, you may want to embrace.
We try and take a broad view of the children’s activity sector across the UK, but understand despite our vantage point, some of these may not apply as strongly to your business as it will to others.
So, what are these trends?
1. Flexible offerings will continue to win
Business models have been tweaked, pivoted, tested and changed across the sector over the past 10 months. The impact of Covid-19 has meant providers have needed to make sometimes sweeping changes to adapt.
What we’ve witnessed is those who had (or now have) multiple potential revenue streams have been better positioned to survive the business threat. We anticipate this continuing to be the case as we move further into 2021 and 2022.
Does this mean the death of in person class based providers? No. We actually anticipate the demand for these services to be at their highest ever, however it does mean if the Government continue their flip-flop approach to opening sectors, then suddenly closing them, activity businesses who aren’t able to swiftly adapt will suffer, potentially to the point of closure.
This flexible approach will also give providers the opportunity to test their model, which should enhance their knowledge for better long-term strategy creation.
2. Online activities are mainstream
Over the past two decades we’ve all seen the boom of technology and how that has impacted our everyday lives. The vast fragmentation of the children’s activity sector and typical skill set of most providers (more often than not, not technical or IT based) has meant we haven’t been the quickest sector to adopt online services and advanced communication tools.
That’s not to say activities and providers operating online didn’t exist before 2020 – quite the opposite in fact, many were already online and you only have to do one simple Google, YouTube or App store search, to see millions of hits for children to do activities online. Similarly, the likes of augmented/virtual reality and mass online learning have been mooted for some time.
But what Covid-19 has forced many traditional in person activity provider services to do is go online. This for many providers will be simply a temporary measure while we are forced to stay at home, but we believe it’s potentially fast tracked the opportunity to consider new models of live experiential learning as a core revenue stream or new business in itself.
Some reading this point will look at their dwindling numbers and retention rates for online classes and think differently. We accept many customers have become somewhat fatigued and mindful of screen time for their children during Covid-19, however if approached the right way (and that typically isn’t shoe horning an offline model online) we fully expect hybrid or online only activity businesses to be created this year and next.
3. Technology enhancing customer experience
Technology used well can dramatically lead to better management of your business. An obvious point you might think. Perhaps less obvious and certainly less evident in the children’s activity sector is those using technology efficiently and leveraging the possibilities to save themselves time, make more money and vitally improve customer experience.
Simple things like better website design to improve user-friendliness, booking system integration to reduce time taken for each sale and automation to serve customers with timely information as and when they need it.
Theo Millward of Swimtime Group and Franscape recently did a talk about how he has integrated technology (and built his own system) to enhance customer experience and exponentially grow his activity business. Well worth a watch here.
4. Wider usage of data analytics to leverage marketing communications
With customers (and the world) more online than ever before, providers are needing to better understand how to reach and communicate with potential and existing customers. Similarly, tracking return on investment (of both time and money) is critical to business efficiency.
A really simple way of doing this is through data analytics. If you haven’t already got Google Analytics set up on your website, we suggest you do this today (it’s free). This used appropriately and consistently can be a great tool to understanding customer behaviour in terms of where they are coming from, what they are looking at on your website and what ads and promotions are working well for you. And this is just scratching the surface.
Once you have this insight you can then make better decisions to drive your business forward.
5. Connecting with customers and building relationships
Most providers will now be well versed in communicating with customers online via email, social channels and other methods. Something that has become increasingly important is the ability to connect with customers in more meaningful ways than before.
Are you having conversations online? Are you fully engaging with customers through social media channels? Is there something more you can be doing to develop relationships?
Building rapport and loyalty was previously a way to thrive and increase customer retention. It’s now become the norm for business survival.
6. Providers to maximise on potential upsell opportunities
Many of you have had to lean on alternate means of generating revenue. For some this has been moving online or focusing efforts on previously under-utilised streams. Some of these revenue streams may have been seen as ‘upsells’ where you’ve sold the core service or product and then perhaps sold some merchandise or additional value for an extra cost.
We believe many providers have failed to utilise this potential in the past, leaving ‘money on the table’. Through necessity you’ve perhaps seen customer demand when prompted for additional services or products you can sell to them more regularly. Those who choose to embrace a more strategic approach to upselling now and beyond Covid-19 will stand to increase business turnover significantly.
7. Movement away from service commoditisation
We’ll start this final trend by saying we rarely come across a business that is truly unique in the children’s activity sector. We actually believe through the huge growth in service providers over the past ten years or so, there’s been a significant move towards saturation within the market (certainly in some regions) and commoditisation (where one provider can easily be substituted for another).
Simply put, there’s less room to innovate today than twenty years ago, and that’s actually okay. It’s the same for many industries much more advanced than ours and reinventing the wheel for the sake of it is rarely advisable. However, with some careful consideration providers can start to really see what their points of differences are from competitors and to build upon what customers are saying they like about your brand. This in itself, with a healthy dose of creativity and originality, will lead to greater options for customers across the marketplace, which we should all encourage.