november2024 - 38

Longtime operator and industry
consultant Orrin Heubner offers his
operator clients a good gauge for
recurring revenues. " For OCS, you
should have, at a minimum, 10%
of your total revenue as recurring.
The real target is 15% to 20%, "
he said. " Recurring revenues for
OCS include point-of-use water
machines, ice machines, Bevi units,
kegerators, coolers and bean-tocup
machine rentals. All of these
translate into filter changes, periodic
maintenance and line flushes. "
THINK OF RECURRING
REVENUE AS AN ANNUITY
Heubner said that the recurring revenue
associated with OCS is nothing
less than an annuity, and he has some
specific strategies for selling it.
" Sell the rentals at the lowest
common denominator. A charge of
$12 per week for a water unit is not
a lot of money to pay for healthier,
filtered water, " Huebner said. " What
sounds more enticing, $12 per week
or $40 per month? Charge every 4
weeks and get 13 rental periods per
year. All rentals should be at weekly
denominations instead of monthly.
Make sure all fees are discussed up
front and put into the agreement. "
" Upsell the equipment and the
rentals will go up. Provide as much
rental equipment as possible. We
must continually look at ways to
monetize the services we provide.
Gold standard service is then
expected by the client and must be
supplied by the operator. All of this
will work, but an operator also has
to focus on maintaining the best and
most consistent relationship there
can be. Visiting the client just once a
year will not cut it, " Heubner added.
As enthusiastic as Heubner is
about recurring OCS revenue, he
said he is equally excited about the
newest opportunity for micro market
operators: Advana from 365 Retail
Markets and Cantaloupe Advantage.
Under these programs, operators
receive monthly checks for allowing
advertising in their micro markets on
screens, kiosks and other devices.
Advana from 365 Retail Markets
Jacob McNulty of 365 Retail Markets
is working on the Advana program,
and he agrees with Heubner: Micro
market advertising makes sense
for operators. " It's a consumer
engagement opportunity for an
operator, and the side benefit - it is
revenue generating. " said McNulty.
" If you're an operator, you can take
the easy button by allowing ads to
be deployed on your screens. They
could be from an insurance company,
from a technology company, from
any advertiser that wants access to
the employees that are sitting in the
break room every day. "
McNulty said the program does
not require involvement from the
operator, and revenue ranges from
$5 to $30 per month per location,
depending on the city. New York will
generate higher revenue for example
than a rural area in Indiana.
" Advertisers love this, because the
people seeing the ads are employed,
getting a consistent paycheck and will
typically be returning to the market
multiple times per day or per week, "
he said.
If an operator is willing to
add additional screens or work
closely with CPG brands to launch
products, show video, display other
rich media or engage in a more
targeted advertising program, the
revenue potential grows significantly.
According to McNulty, four to five
times the revenue is potentially
available. " Just about everyone starts
out with the easy button, " he added.
Operators can partner with companies like 365 Retail Markets and Cantaloupe
Inc. to participate in advertising programs, where the operators' kiosk and other
equipment are used to display messages from local companies or CPG brands.
38 Automatic Merchandiser * November 2024
Cantaloupe Advantage
Elyssa Steiner, chief marketing officer
for Cantaloupe, a payments and
software services company that
ID 322818746 © Dmytro Zinkevych | Dreamstime.com
http://www.Dreamstime.com
november2024

Table of Contents for the Digital Edition of november2024
