Amway Center Proposal Final 2

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Strategic Business Proposal

for

For: Amway Center www.amwaycenter.com

Prepared On: 3-8-2019 Prepared By: Calli Hoostal Anna Lepetri Ben Fanderclai Davon White Colandra Tatum

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Instructor Name: Myke Fakir

Contents Introduction 3 Executive Summary 3 1. Organizational Challenges & Proposed Solution 4 Organizational Challenges 4 Proposed Solution 4 2. Environmental Scanning 6 Internal Analysis 6 External Analysis 11 3. Strategy Formulation 16 Operations 16 Sales, Marketing, & Distribution 17 Legal 19 4. Proposal Budget & Projections 22 Sales Projections 22 Project Budget 22 5. Strategy Implementation 23 Timeline and Key Milestones 23 6. Future Plans 25 Long-Term Opportunity and Development Plans 25 7. Appendices and References 26 References 26 Appendices 32 Appendix 1: Competitive Analysis 32 Appendix 2: Sales Projections 33 Appendix 3: Expense Assumptions 34 Appendix 4: Income Statements 36

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Introduction

Executive Summary The Amway Center’s goal is to develop a loyalty program where Amway can track patrons who have purchased tickets and/or attended multiple non-team related events so they can be rewarded. We plan to create a loyalty rewards program for Amway Center customers that have purchased tickets for events. We will distribute the app through all existing platforms for Android, expanding our reach beyond just the current Apple platform. While the app will continue to be free to download, ad revenue from mobile video ads and banner ads will generate significant revenue. Our first-year revenue projections are $31,720. The loyalty program will be concise, and it will track patron’s purchases and reward them accordingly. The program will give loyalty customers a clear tally of points earned and how they can earn more points. Our target market is defined by their use of personal technology, especially smartphones. Social media will play a big part in our promotions and marketing. Facebook, Instagram, YouTube and Twitter will give us direct access to customers. We intend to add the loyalty program to Amway’s existing app. We believe that setting specific, measurable, attainable, relevant and time-based goals will help us overcome any organizational challenges Amway Center has.

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1: Challenges & Solutions

Organizational Challenges Amway Center is challenged in the area of their loyalty program for their customers. For customers who have purchased tickets and that have attended events at the Amway Center can be rewarded. These events can be non-team related events or team related events that will be presented at the Amway Center (Wheelan, 2011). It cost a business about 5 to 25 times more to acquire a new customer than it does to sell to an existing customer. In addition to that existing customers spend 67% more than new customers. In short, customer loyalty is very important to the Amway Center. Rewarding our customers is very important and making sure they have good experiences at our venue is a top priority. Having this loyalty program will aid in the strength of our brand and create relationships across our organization. Engaging in this program will retain existing customers, bring new customers along the way, and close the door on the competition.

Proposed Solution The solution to this challenge is direct, simple, and concise. Creating an app specifically for Amway Center customers that have purchased tickets for events. The loyalty app will be concise, and it will track patron’s purchases and reward them accordingly.

The app will consist of analytical data such as sales, inventory, and history. Having these features on the app will appeal to existing customers and continue to build our relationship with them. Consumers will use the app to make purchases and/or record purchases that they have made in person at the Amway Center.

The app will give loyalty customers a clear tally of points earned and how they can earn more points. The Amway Loyalty app will also allow customers to use points earned and gain 15% off other products, merchandise, and concession stand purchases. There will also be a feature on the app to encourage existing customers to share with new customers, and both can be rewarded in points by simply tagging someone on social media. (Thomsen, 2019).

Loyalty customers that use this app maybe traveling to our area, or they can get free shipping for their tickets to be delivered to them. Also, if a parent/grandparent is buying tickets for younger family members, they can have the tickets delivered to that college graduate and use points to get free shipping.

The loyalty program app at Amway will allow customers to be alerted when their favorite artist or team is coming to town, and they can plan their event. The loyalty program app will track rewards for customers and allow them to earn 1 point for every $10 spent. Whether the customer make purchases online or in line. The app will be just that easy to use, track, and spend. Introducing this app to our Strategic Business Proposal Page 5 of 35 customers will allow our patrons to earn and save seamlessly. They will spend and earn at the same time and having fun doing so.

The points earned while using the Amway app will not expire, no matter if our customers change devices, change their email addresses, move, or even change their cell phone number. The points will be tied to the customers name only and their information will not be shared with other companies. Our customer’s privacy is very important and it will not be compromised by using this app.

Lastly using the Amway loyalty app will allow our customers to provide us with very valuable feedback about their experience while visiting our venue. Merchandise, concessions, tickets, customer service and the event itself. Feedback can be given directly to us through the app, or the customer can sign out of the app and remain anonymous if they choose to report concerns to us about their experience.

“Genuine customer loyalty is becoming a fleeting advantage for many brands. In reality, customer loyalty is deeply rooted in the overall experience with a brand. While pricing can be an important component to many consumers, there are large segments motivated by the overall experience a brand delivers (Harrington, 2019).”

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2: Environmental Scanning

Internal Analysis

Company Overview The Amway Center is a sports and entertainment venue in Orlando, Florida. The Orlando Magic served as the developer of the new downtown Amway Center. The facility is owned and operated by the City of Orlando on behalf of the Central Florida community. The Amway Center was designed to reflect the character of the community, meet the goals of the users, and build on the legacy of sports and entertainment in Orlando. From the inside out, beginning to end Amway Center is committed to developing a world class venue that would bring a myriad of events; that would appeal to the diverse taste of Central Florida residents ("By the Numbers," 2015).

Since opening its doors on October 1, 2010; the arena has welcomed 6,657,672 guests to a total of 1,079 events. During that span, the state-of-the-art venue has hosted 55 sold-out shows by many of the biggest names in music, including Paul McCartney, Taylor Swift, Justin Timberlake and the Eagles. The Amway Center is the proud home to three teams; the NBA’s Orlando Magic, ECHL’s Orlando Solar Bears and the AFL’s Orlando Predators and has hosted several high-profile sporting events including NBA All-Star Weekend, NCAA Division I Men’s Basketball Championships, the ECHL All-Star Classic, World Championship Boxing and the Ultimate Fighting Championship (UFC).

Amway Center has hosted 51 Hispanic/Latino concerts since 2010, during which time some artists have garnered impressive arena records ("Amway center achieves record growth," 2018). “Our programming is reflective of our community and as the demographics of Orlando’s population evolves, so does the way we approach the arena’s programming,” said Orlando Venues, Chief Venues Officer, Allen Johnson. As the influx of the Hispanic/Latino population continues, promoters and touring acts have taken notice, which has directly impacted Amway Center’s business in a positive way. Amway Center uses a revenue management strategy. Revenue management is defined as selling a physical space for a given length of time for a variety of prices. Sport stadium revenue management is in its core about selling seats (the physical space) per game (Cornell.edu, 2013). The goal is to maximize the revenue per available seat. To be able to do so, it is important to control both space and time in order to effectively manage customer demand. Strategic Business Proposal Page 7 of 35

Financial Standings Financial results distributed to city commissioners show an operating profit of $998,913. After some non- departmental expenses were included, Venues Director, Allen Johnson claimed a bottom line of $584,536 (Schlueb, 2011). Financial records show that in addition to rent, concessions, and other income directly tied to the building, the venue also received a taxpayer subsidy of $980,053. That contribution came from Orlando's general budget, the fund that pays for police, parks, and most services. The arena's first-year bottom line also included a one-time $200,000 signing bonus from Ticketmaster when the city gave the company exclusive ticketing rights for the venue. While the company Amway is a publicly traded company the Amway Center is not.

Organizational Strengths Amway Center takes great pride in the security of those who are in attendance to any of the events at this arena. Security of this establishment has undergone great measures and heightened educated protocol in order to keep safety as a number one priority. Unfortunately, in today’s society after recent negative impacts happening at large arenas making world-wide news, safety and security is a mandatory protocol. Those who are in attendance of these events resonate with the idea that their safety may be at risk. Amway recognizes this as being a priority and has created a very detailed and strict list of what can be accompanied to any of the events via Amwaycenter.com (Center n.d.).

Another great asset Amway possess is an environmentally positive establishment. When Amway was in the process of being built, the designers wanted their focus to be set on creating a sustainable location. The energy, atmosphere protection, water reservation, and indoor monitoring of environmental quality and health was very important. Conserving materials and resources upon the construction of this establishment therefore, making Amway one of the most successfully performing, environmentally positive, professionally resourced arenas in the United States (Center n.d.).

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Amway also possesses a prime locational service with a capacity of 18,500. The Amway Center was specifically designed to interact with patrons of an urban setting and bring large amounts of tourists to inhabit Orlando, Florida and the surrounding area. This is not only a positive impact to Amway, but to the surrounding restaurants, bars, hotels, and public transportation in the Orlando area. Amway operates 365 days out of the year and houses 13+ events ranging from popular concerts, Olympic Trials and a multitude of sports expeditions (Center n.d.).

Organizational Weaknesses One weakness that is associated to our proposed solution would be that not all consumers fully trust loyalty programs as a way for benefits, nor do they feel like their information that is to be provided is kept 100% safeguarded. According to a report taken by Forbes in 2017 reference to loyalty programs, it was stated that, “85% lack full belief in the system, this belief increases vulnerability to fear and further distrust” (Meehan, 2018).

Another weakness found with Amway’s loyalty program is the potential of misinterpretation for identity per individual. Individuals want a brand to know and understand them, as well as, having them meet their needs. If a consumer feels like they’re not getting their money's worth out of a loyalty program, then frustrations will occur. Demographics are very important to translate with rewards so that all individuals win. However, what is most valuable and crucial to Amway, is that they pinpoint the proper lifestyle, age, and geographic of the consumer and understand their purchasing behaviors (Meehan, 2018).

Amway must consider the entire process of developing a loyalty related program via a mobile device application. This is not just simply a one-time expense that will temporarily impose on their financial standings, nearly up to 5% of Amway’s generated profits may be cut with this development. This is an entire process of figuring out short- and long-term figures that they will be able to account for out of their revenue. Commit certain individuals to employ for these roles and be able to positively develop, promote, and disburse the loyalty rewards that consumers earn. If there is no foundation asserted for this development, Amway’s quarterly goals may be at risk ("10 Most Important Pros and Cons of Loyalty Programs | Annex Cloud," 2018).

Customers Like many businesses we’ve set our sights on the millennial generation, but more specifically those within the ages of 22 and 30. This is an “experience first” generation - a generation who, unlike those before them, decided that experience is far more important than material items (Gilliland, 2017). This doesn’t just apply to choosing to an experience over an item but, also to choosing an experience that will be far more enjoyable than others. This means convenience, rewards, and customer service are key Strategic Business Proposal Page 9 of 35 needs to our potential users amongst other things. This is supported by a report done by Per Kobie, which stated that 86% of millennial’s join loyalty programs to collect and redeem points for rewards, 78% for discounts, and 28% for convenience (Chamberlain, 2018).

Overall, our users are particularly male, Caucasian and located in Central Florida. Many are college graduates with at least an associate degree and are making $33k-$40k annually in lower-level management, sales and other blue-collar jobs. They turn to sports first for entertainment and are loyal fans of the Orlando Magic, Orlando Predators, WWE, and NXT. You can also catch them at the Amway Center when notable acts such as Billy Joel or Luke Bryan come through. Other leisurely activities they enjoy are nights out at bars, especially sports bars, keeping up with shows like Futurama, Family Guy, and Game of Thrones. Spending time with friends and potential romantic partners, taking a trip here and there to the nearest beach. They’re also moderate users of gyms for fitness and dating apps including Tinder. Like applied above, they’re looking for a more rewarding experience for paying the money and taking the time to visit the Amway Center, when they can just turn on a large-screen TV and watch a Magic game from the comfort of their own couch. With a $339 average cost to attend an NBA game in 2016 (Sports Fan Coalition, 2016) and the Orlando Magic specifically only being a currently 9th ranked team in the Eastern Conference, our target user is looking for a more compelling reason(s) to visit the Amway Center.

With Amway Center having around 75k followers on Instagram, I’d say that there’s a market size of about 70,000 people with a 35% potential growth. If we focus our app around loyalty rewards including free drinks and food at the venue, discounted event tickets, a night of free parking, etc., if all that we ask for is basic information and no money, there’s a high chance of fans latching on to the app. This is specifically supported by the fact that approximately 78% of millennial’s belonged to two or more loyalty programs in 2018 (Chamberlain, 2018). And with 45% of smartphone users using Apple and another 54% using Android (Nielsen, 2016), we’d have to ensure accessibility and functionality to the app on each respective operating system and store (Apple Store, Google Play, etc.). A millennial smartphone user’s pickiness to design should be noted as well, as a 2017 Comscore study discovered that 21% of millennial’s deleted apps that didn’t look pleasant on their home screen. Again, it’s all about experience, experience, experience, even down to the experience of having the app on their phone.

As unoriginal and unsurprising as it sounds, advertising on social media to our target market will most likely bring us the best results. As part of Adobe Digital Insights’ (ADI) “State of Digital Advertising” report, ads on social media play a huge role in millennial customer acquisition. As 42% of millennials identified social media as the most relevant advertising channel to them (Adobe Team, 2018). TV fell behind, with the statistic reading closer to 28%. Advertising on social media would also make it much simpler to connect potential customers to the app, as they could be directly linked to the download source. Digital advertising should also have a strong focus on smartphone compatibility, as the statistics Strategic Business Proposal Page 10 of 35 on device visited on smartphones, continue to rise while desktop and tablet visits have seen a 21% and 31% drop respectively (Abramovich, 2018).

Of course, advertising should not just be kept to social media. Advertisements for the app should be present within the actual venue, including on screens during stoppages and intermissions at games and on both digital and physical banners. Handouts including pamphlets and printed stock cards available at food and merchandise stands, stores, and ticket counters could also be of benefit. The QR codes will directly link those who scan it to the download site. Venue attendees should be frequently reminded that the app exists in multiple formats, as they will never feel more encouraged to download it than when they are physically attending an Amway Center event. And they can immediately reap the benefits of participating in its loyalty program.

("Is this what the Orlando of the future will look like? Project DTO's final report to the city was released this week," 2015)

Collaborators The Amway Center currently hosts the Orlando Magic and the Orlando Solar Bears, serving as two of our most essential collaborators for a variety of reasons. They’re also partnered with Disney Parks, Advent Health, Harris Corporation, Pepsico, and RP Funding. These partnerships have shown benefit to both the venue and its teams and the company with which they work with. Disney and the Orlando Magic have each been able to sell and develop co-branded merchandise, as well as collaborate on many other marketing and community opportunities. Including the 2017 promotion that allowed new or returning Walt Disney World annual passholders to earn a free Orlando Magic jersey upon purchasing a pass - an APV worth $125 (AllEars, 2017). With the wide-scale fanfare surrounding the Walt Disney Company in Central Florida, the Disney partnership may be their most important when it comes to revenue. Strategic Business Proposal Page 11 of 35

Just this year, the Orlando Magic open the Advent Health Practice Facility, a collaborative result of the two organizations’ shared vision of “promoting whole-person health and utilizing cutting-edge sports medicine research” (Denton, 2019). Much of the data collected from the Orlando Magic players at this facility will be used in the medical firm’s treatment of younger athletes. Advent Health, previously known as Florida Hospital, has also previously put on community events that have allowed fans to meet and interact with Orlando Magic players. Harris Corporation provides the high-quality video technology used to cover the venue’s events both inside and outside the actual venue as part of their focus to enhance their fan’s experience. Pepsico, Amway Center’s longest-standing exclusive partner, is the official and exclusive non-alcoholic beverage and salty snack provider for the Orlando Magic and Amway Center as a whole (NBA, 2015).

On a more philanthropic side, RP Funding, whose CEO is no stranger to partnering with sports-related brands, hosts events at the Amway Center as part of an effort to encourage growth within the community. Such as an event that included a sleepover at the venue for local, underserved youth, which included suite tickets to a Magic game and donated beds and gift bags for the kids (Cohen, 2017).

In February of 2019, Advent Health announced that they suffered a year-long data breach that compromised the information of about 42,000 of their patients. There was little coverage of the issue and since then, the company has improved their system safe guards so the situation does not feel worrisome in regard to the existing partnership with Amway Center.

External Analysis

Competitors Some of the direct competitors of Amway Center include, American Airlines Center and Bankers Life Fieldhouse. Both host sporting and live entertainment events. They are also home to NBA teams. They sell the same products through ticketing, and concessions for events (Dorsey, 2017). What truly makes them direct competition is hosting NBA teams and selling tickets to the games? Indirect competitors include Red Coconut Club and Mangos Tropical Cafe. These club venues are located in Orlando Florida. They sell tickets but are not in direct competition with the Amway Center. The common factor as seen in the attached competitive analysis is the entertainment industry, but Amway Center specifically does sport and concerts. The clubs supply dancing and entertainment for consumers.

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Business Climate Political & Regulatory

It is common for city or county governments to pay for professional sports arenas, and chip in for their upgrades. In Sacramento, the city is spending $273 million on a new arena for the Kings. But elsewhere in California, the Golden State Warriors are building a $1 billion arena, without public help. In Minneapolis, the 1990-built Target Center is getting a $129 million makeover, of which $74 million will come from city sales taxes. The NBA established a document containing short provisions and regulations governing the suitability of NBA arenas. The regulations allow the commissioner the power "from time to time" to establish minimum standards for arenas as it relates to the production and marketing of NBA games. That seems to give the commissioner a wide berth in dictating what an arena should look like in terms of seating, signage, suites, locker rooms and more.

Economic

It is our strategy to target the millennial generation but, we have to consider how the economy will affect ticket sales. With that in mind we have researched how this program will have a good effect on the economy. During economic slowdowns consumers tend to be very cautious with their spending. Concerts, team events and non-team events maybe a luxury (to some) during those slow times. This is the very reason we designed a loyalty program like the one aforementioned. When those times of a slowed economy happen upon us, points earned are saved, and will not be taken from our customers just because they are not financially able to attend an event at the moment. This is one way we show appreciation for our customers.

When consumers are thriving in strong economy, their disposable income is high, and they are able to enjoy those team and non- team events again. Because of this newfound confidence, it tends to excite people to take in an event or two. Rebounding from a slowed economy is mentally challenging; therefore, enjoying a local event at the Amway Center is sometimes needed. When our customers take to their app, there they are able to pick up where they left off. Browse events, invite friends and share their experiences from their events. Our customers are able to use points that they have earned and purchase tickets for 15% off for certain shows. For example, it may be cheaper or a better incentive to attend one of your favorite events on a Thursday night, instead of a Saturday night. Use the app to purchase tickets, save money, and earn more points. This loyalty program will not forget to send email reminders about additional savings for our target customers; we could all stand to save a few more dollars.

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Social & Cultural

A general trend surrounding the sports industry right now is the unwillingness of millennials to go out to just any experience. The millennial generation is notorious for putting a huge focus on experiences over items and these experiences need to be well worth it. Because many experiences can be enjoyed or witnessed digitally from the comfort of their homes. In fact, 3 in every 10 millennials prefer to spend a typical night out, rather than at home; while only 15% of baby boomers want to stay home. A lot of this comes down to money, and the fact that millennials grew up in financially different times than previous generations - that were not so positive. So now, the sports industry has to be creative in convincing the millennial generation that they just absolutely cannot miss out on a game, that they can simply watch on TV or even their own phones.

So, while our product is meant to target millennials and reward them for attending games at the Amway Center via a loyalty program. It still might be hard to convince them to purchase tickets simply for that reason - they still have to purchase tickets. They are app savvy enough to know that although attending a sporting event at the arena might earn them a free meal at the venue, they're still sacrificing $60+ for those savings (Forbes. 2018, December), (Guerra, J. 2018, June 11), (Sports Management Degree Guide. n.d.), (Statista. 2019, February).

Technological

Our target market is defined by their use of personal technology, especially smartphones. According to Jingjing Jiang, the research of the Pew Research Center shows that “More than nine-in-ten Millennial’s (92%) own smartphones.'' This goes hand in hand with internet usage (97%) and social media use (85%). The generation is focused on technology and technological experiences that are centered around them.

On top of this in the event industry, branded multi-use apps “have become an integral part of how we function in everyday life” (Waida,2018). It is also clear that “branded apps provide limitless opportunities to interact with consumers right on their own phones.” This provides the type of interaction this millennial generation is seeking, creating a personalized experience for them that is easily accessed anytime or any place.

Other growing trends in the technology field for event industries are proximity sensors and RFID. Proximity sensors are various forms of technology used to detect objects without physically touching them. Recently, these types of sensors are being used to boost attendee engagement by connecting them to other people around them and/or giving them opportunities to interact with the environment around them. These types of sensors can help track different parts of the venue where people have visited, and customize their experience in a venue through avenues such as an app. RFID or Radio Frequency Identification are a type of electronic tag that contains different data points, making it easy Strategic Business Proposal Page 14 of 35 for customers to engage in paperless and or cashless events, avoid queueing, and help improve security (Carter, 2018).

On the horizon for the event industry (which will majorly influence the course of event centers like Amway) is the Virtual Reality segment of technology, a rapidly growing trend. “The Global virtual reality Market is expected to exceed more than US$ 43 billion by 2024 and will grow at a CAGR of more than 33% in the given forecast period” (Market Research Engine, 2018). Virtual Reality allows users to experience an event like they are sitting in the audience while there are in another location. The industry has already begun to experience this segment taking over, with Super Bowl LI being the first Super Bowl to be broadcast in full virtual reality (EventMB Studio Team, 2017), as well as major artists like Lil’ Wayne giving fans VR experiences for his shows (Kennedy, 2017). In conjunction with this, events have started using VR as a way to accentuate their content, giving users a brand-new experience ("Live from Intel's CES 2017 press conference!", 2017). Companies in the event industry will need to incorporate and adapt to this trend in order to stay relevant and continue to support physical locations outside of VR. We cannot stress the importance of this technology trend enough.

Industry Trends Business Opportunities

As mentioned in the technology section, a rapidly growing trend in the event industry is virtual events. Organizations indicating themselves offering a virtual experience for events has leaped from 19.0% in 2010 to almost 44% in 2018. On top of this 24.7% additionally stated that they would be offering a virtual event within the coming 12 months (PR Newswire. (2018)). With VR growing rapidly, this will become a cornerstone for Event Centers moving into the future, whether it be creating in house VR or offering events to be streamed in VR.

Sustainability is another trend within the event venue industry. Especially within the Millennial community, where 71% of Millennials surveyed are putting trust in businesses to lead the way in CSR or Corporate social responsibility and 86% of consumers expect companies to act on social and environmental issues (2017 Cone Commissions CSR Study,2017), (Grouhi, 2018). Investing in sustainability efforts makes customer segments have a more positive view of the company, trust company, and maintain loyalty. This gives the center the perfect opportunity to determine and publish their efforts in creating a sustainable future, as well as being a pioneer in that segment of the industry.

A final up and coming trend for the industry is block chaining. While it is commonly associated with crypto currency, block chaining is a format of data transfer that is resistant to modification. This means it is extremely useful in digital identities and data transfer. This will bring on the future of networking with the super-fast and safe 5G network, as while as continue to be utilized by companies in creative Strategic Business Proposal Page 15 of 35 ways to help in “stemming piracy, enabling micropayments, and returning more royalties to content creators” (Westcott, 2018).

Business Threats

Security is a rising issue around the globe in the event center industry. With large scale acts of terror being carried out at events such as the Manchester bombing or the Los Vegas massacre, security has become a top priority in many event goers’ minds. If the correct measures are not established and displayed, people will not feel as safe and likely not attend the same number of events. Or they will take the easy way out and begin investing in experiences from home (Goldstein, 2017).

That leads to the next threat, which is streaming. In the same way that virtual reality can provide a great business opportunity, it can pose a major threat to the event industry. The goal is to use VR to enhance live events, not become a substitute for them. Event venues must be careful to continue to make live experiences an engaging experience so as to not lose their market. An example of the draw of streaming can be seen with Beyoncé’s Coachella performance in 2018, where she drew more than 41,000,000 unique viewers (Gutelle, 2018).

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3: Strategy Formulation

Operations Our proposed solution for Amway will be introduced into Amway as a parallel strategy, as the overall approach the center is taking when approaching customers do not need to change. It also may be worth noting that a type of pilot approach could be utilized, introducing the reward program first to a group of either volunteers or a group of handpicked customers that already “shop” with Amway. Once their feedback was gained the program could be tailored and then released to the general population.

Organizational Impact

This program will not require a large team but, it will need one nonetheless. Craig Borkon, the assistant director for Amway (Amway Center, 2019) would be the perfect over-seer of this project as he could focus on placing resources in the right hands. As well as appointing duties for either existing staff members or hiring together a new team to oversee the app. It is our recommendation that the app work is not contracted out to another company and is instead cultivated in house. We will need 3 main divisions for the strategy. The first will be a direction department, where the overall flow of the program will be constructed and changed as needed. This department will lay out on paper exactly how the program will work for customers, what kinds of rewards are in place, etc. This department will also be responsible for working on the legal aspect of the app, in cooperation with the HR team. Next will be the technical department, where the loyalty program will be programmed and designed into the app. This team will need to work in cooperation with both the HR and the direction departments to make sure all the features of the app work as intended. The final department will be the HR department, which will work closely with customers to gain feedback and deliver the best possible service of the program. This department will also help those with problems, questions, or concerns involving the loyalty program. As mentioned, they will need to be prepared to work seamlessly with the other two departments.

Staffing Needs

Positions:

SALARIES BASED ON DATA FROM Careeronestop.org

Direction Department

Product Management Team Member x 2 - $25,000/yr.

Tech Department

Programmer x1 - $47,000/yr. Strategic Business Proposal Page 17 of 35

User Interface Designer x1 - $27,500/yr.

HR Department:

HR Head x1- $35,000/yr.

Customer Support Rep. x1 - $10.00/hr.

Sales, Marketing, & Distribution

Marketing Mix Price

The new and improved Amway Center app will still be free to download, as it is before the loyalty program is implemented. Being that the app and its new loyalty program that we’ll be heavily focusing on are meant to compliment and then boost the already existing business endeavors of the Amway Center, generating revenue from the app isn’t of utmost importance. In fact, it may hinder on our goal to facilitate and improve the Amway Center guest experience. Plus, a 2015 study at Cambridge University revealed that only 20% of paid apps get more than 100 downloads while a mere 0.2% of paid apps get 10,000 or more downloads. On the flip side, a significantly larger 20% of free apps actually hit that 10,000 or more downloads threshold (Lunden, 2012). For these reasons, we believe a focus on penetration pricing will result in higher guest usage.

Product

We will not be changing the name of the app from “Amway Center” in order to prevent confusion from new and existing customers. In the case that a potential customer is unfamiliar with the app’s name, more likely than not, they would search “Amway Center” anyway. Before the proposed update, the existing version of the official Amway Center hosts a variety of services, including:

● Full event schedule including photos and videos ● In-app ticket purchasing ● Song previews and purchasing ● Interactive directions ● Check in to events via Facebook for special offers ● Sign up for push notifications to receive the latest updates of concerts & on sales ● Event Seating Charts ● QR Reader ● Live Chat

Following the update, the app’s biggest focus will be the Amway Center loyalty program. As previously mentioned, users will be able to convert the money they spend at Amway Center events into points that Strategic Business Proposal Page 18 of 35 they can use in the future for special discounts on tickets, merchandise, concessions and other Amway Center-related products. The loyalty program aspect of the app will allow users to view, track and easily use their points at different points of sales, as well as input any Amway Center purchases that were not recorded by simply scanning a receipt or contacting a customer service team member via the app’s live chat for additional help.

Via the loyalty program, customers will be rewarded for their business with the venue and earn benefits that they otherwise would not have received. Seeing as the customer will mainly use the loyalty program at the Amway Center itself, we hope that the special offers that they could receive for their loyalty will encourage people to not only want to return to the Amway Center in general but, convince them that it is worth it to visit.

Distribution

Before this update, the Amway Center app was only available to download from the Apple iPhone App Store. While we will be keeping the app strictly to mobile devices, as mobile internet usage has risen over 933% since 2008. Desktop internet usage remains where it was in 2008 (Mindsea Team, 2016), we will be sending the app to an increased number of app stores. Besides the iTunes App Store for the iPhone, the Amway Center app will be available for download on Google Play Store, the Amazon Appstore, and Samsung Galaxy Apps. Distributing to these additional stores allows the app to be used by Android users instead of leaving us limited to just iPhone users.

Promotion

The objective of our marketing plan is to drive traffic towards our new and improved app and therefore, our venue loyalty program. Being that our loyalty program will benefit those physically attending events at the Amway Center, it only makes sense to directly market the program to audience members inside the venue itself. This includes promotional videos featuring athlete endorsements from our two home teams and other video ads on the large screen during intermissions, ad placement on all digital banners, and distribution of cardstock flyers with QR codes that link to a download source. We will add more in- venue promotion with a Snapchat Filter that advertises the loyalty program and app. A heavy focus is clearly being placed on in-venue promotion simply due to the customers’ heightened excitement and emotions while being entertained - the goal is that they’ll feel more impulsive to download the app while they’re already enjoying themselves at the Amway Center.

Outside the venue, online promotions will expand to web banners and social media ads directed towards out target market. We will also feature traditional advertising in the form of billboard ads along heavy traffic roads such as I-4 within a 10-15-mile diameter of the Amway Center and radio advertisements on local classic rock and Top 40 radio. All promotions will have one cohesive theme, which will focus heavily around earning rewards for your visits so each one can be better than the last. The official hashtag will be #AmwayLoyal. Strategic Business Proposal Page 19 of 35

Sales Strategy Inside the Amway Center’s primary entrance will be a table with an Amway Center Loyalty Program Ambassador, who will answer any questions about the program and help interested users properly set up their loyalty accounts. The ambassador team itself will include 4 different part-time employees who will be present at all evening events at the Amway Center, whether it be a game or a show.

Legal

Legal Factors Regulations

Considering the fact that a major purpose of our loyalty program is for data gathering, we’ll need to adhere to The Florida Information Protection Act, or FIPA. This expanded law requires a notification to the Attorney General for breaches and consultation with local law enforcement which before was optional (Grachis, 2018). Under this law Amway Center will have to:

● Appraise policies and procedures to verify that they are implemented effectively. ● Set up reporting for large printing jobs. ● Limit access to sensitive information. ● Review all employees' access to systems, data, and sensitive areas. ● Review business associate and contractor agreements and security. ● Consider the role of bring-your-own-device (BYOD) policies. ● Assess physical security, as well as cyber security. ● Ensure that customer record disposal policies meet new legal provisions. ● Create an investigative and reporting process if a breach occurs. ● Select an external partner for forensic investigations, audits, and other data breach services.

Florida law also requires that any discount coupon that is issued in connection with the retail sale of merchandise or services to have cash value legibility on their face when presented with a total value of at least 25 cents (Fla. Stat. § 559.03). In this case, all discount coupons that are distributed via the loyalty program, whether they be physical or digital, must clearly be labeled with their monetary or percentage value in order to adhere to these “trading stamp” laws.

When it comes to the expiring of rewards, Florida Statute § 501.95 states that “a gift certificate may have an expiration date if it is provided to the recipient, or to a purchaser for transfer to the recipient, as part of a loyalty or promotional program when the recipient does not pay a separate identifiable charge for the certificate, or if it is provided in conjunction with a… sporting or fine arts event having a limited duration so long as the majority of the value paid by the recipient is attributable to the convention, conference, vacation, or event”. So in the situation that a customer fights for expired rewards, we’d be protected by state laws. Strategic Business Proposal Page 20 of 35

We’d also need to follow the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce”. 15 U.S.C. § 45(a)(1). This means that the Amway Center loyalty program cannot engage in “unfair” or “deceptive” trade practices, which is a broad blanket statement that can cover things including selling products or services in a fraudulent or misleading way, failure to meet reasonable consumer expectations, and failure to clearly disclose important information to consumers. A way to avoid legal repercussions in this area is by establishing a clear and detailed contract with customers when they sign up for the loyalty program. Please see the “Contracts” section for information.

FTC Endorsement Guidelines under the FTC Act must be followed when using any influencers to promote the loyalty program. Such influencers may include players from the Orlando Magic and the Orlando Solar Bears. All endorsements must be honest and not misleading and any connection between the endorser and the endorsee must be clearly disclaimed. This is especially essentially when the endorser is being paid to make the endorsement, which will be prominent when using Magic and Solar Bear players for endorsements. Disclaiming a relationship to the company may include, but is not limited to, a written disclaimer on any visual advertisements or using relevant hashtags including #ad or #paidpartnership on social media posts.

Contracts When creating a loyalty program, we have to be ready to enter into contracts with thousands of users. We, the company, set an offer of terms and conditions that our guests/consumers then have to accept. Therefore, what we advertise as rewards for our program must align with what we state in our program’s terms and conditions so we don’t end up like Shell Oil, who had to agree to a $2.2 million settlement due to the prizes in their ads not matching up with what was contractually stated (Maher, Puccio, Young, 2016). We also need to mention that we “explicitly reserve the right to change or alter program terms and conditions or to cancel the program outright”, as courts frequently uphold such provisions (Maher, Puccio, Young, 2016). The terms should also clearly explain how our customers earn and redeem points. It’ll also be important to mention that while the owner of loyalty points under our program by law has a right to demand services or products in exchange for those points, they can not demand the cash value for those points (Smith, 2011). Products and services that are exempt from earning loyalty points should also be clearly detailed in customer contracts.

Independent contractor agreements will also need to be made with internal employees who are signed on as contractors, including brand influencers and app developers and designers who will be working with product managers, updating the current app and implementing the loyalty program.

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Insurance In the case of a data breach, we’d need Data Breach & Cyber Liability insurance to help cover the costs for things including identity protection solutions, public relations, legal fees, liability and more. Data Breach coverage needs to be in place before or by the launch date of our loyalty program so quick action can be taken if necessary to protect the Amway Center’s reputation. I would also recommend that Amway Center expand its Property Insurance to cover any new equipment and/or devices brought in to maintain the new app and the loyalty program if the existing insurance doesn't cover more property.

Intellectual Property In the case that we use any of the arena’s athletes or other related public figures to promote the loyalty program, we’ll need to obtain a right of publicity. We’d need to ensure that we receive permission from all public figures used in any promotional activity via proper contracts and releases. Communication between both Amway Center’s legal team and the public figure’s legal team would be essential.

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4: Proposal Budget & Projections

Sales Projections Project Budget In our first year, we project 100,000 app downloads. Based on those downloads, we expect repeat customers to spend money after their initial purchase and at an average of $2 per customer, we would generate $200,000. We will spend $50,000 yearly on app maintenance and development, which averages a 50 cent cost that we’ll pay per download. Mobile video and banner ads will create the bulk of our revenue. If 50,000 users watch two ads a day, that will give us 100,000 impressions. Two ads a day adds up to 730 mobile ads yearly. Average eCPMs for this format are around $8 which would generate $24,000 a month. That gives us $288,000 yearly in mobile ad revenue. The average cost is $394 per mobile ad and two banner ads will be displayed on our site weekly. That’s 96 banner ads yearly! We have a fixed cost of $1,000 per banner ad. Our revenue is 96,000 from banner ads in Year 1. According to our first year projection number, our total net sales are $533,620. In Year 2, we’ll increase total net sales by $49,200. In Year 3, we’ll have a significant increase in total net sales equaling $404,420. Year 2 sales increases are reflective of a 20,000 download increase. We project our downloads to double by Year 3 which will greatly increase our mobile ad revenue.

Strategic Business Proposal Page 23 of 35

5: Strategy Implementation

Timeline & Key Milestones

Pre-Launch

1. Build our loyalty program plan.

We will consider attractive incentives and rewards, loyalty currency (points, cash-back, discounts, coupons, etc.), and marketing channels.

2. Research our Users and Competitors.

Our plan will begin with understanding our users and competitors. We will gather demographic data on users that can help us visualize exactly who we are trying to reach. Researching our competition will show how users interact with loyalty reward apps like ours and their expected behaviors. Looking at other loyalty reward apps will help us position ourselves against their selling points, weaknesses, and relevant keywords.

3. Start Marketing Our Loyalty program on the App

This is a significant milestone. Awareness will build slowly and peak at the launch date. We will pick our marketing channels and stay consistent to the Amway Center brand to build interest. Possible channels include social media (Facebook, Instagram, Twitter). We will also target current email lists.

4. Prepare a Press Kit

Our press kit will include each of the following:

· Review guide: Highlight the features, pricing, FAQ, release information, and contact details

· Screenshots: Showing the app for publications to use in their write up

· Icons, logos, banners: Included .png images for digital posts, or .eps for print publications

· Video: Enhancing the reach and impact of our marketing; uploaded to YouTube or Vimeo for best compatibility

5. Beta Testers

Beta testers help improve the app quality and will empower our pre- and post-launch app marketing strategies. They’ll provide insight into our target audience, which in turn will help us select the right Strategic Business Proposal Page 24 of 35 features and rewards for our users. They can also become our biggest advocates.

6. Optimize App Store Listing

· The app name must describe the new loyalty program and encourages downloads.

· The app description must discuss about the loyalty program and its features in depth and attract users by using relevant keywords

· Keyword optimization must target the language(s) users will use to search for the loyalty rewards program. Necessary languages to our local demographic include English and Spanish.

Year 1 ● Hire Software Engineer and Developer ● Launch app with loyalty rewards program added ● Launch online marketing campaign ● Obtain 100,000 app downloads ● $533,620 total net sales ● $31,720 total profit

Year 2 ● Increase app traffic by 9% ● Decrease total expenses by $27,200 ● Obtain 120,000 app downloads ● Increase total net sales by $49,200 ● 13 percent total profit increase

Year 3 ● Increase app traffic by 14% ● Decrease total expenses by $11,400 ● Increase app downloads by 100,000 ● Increase total net sales by $404,420 ● 53 percent total profit increase from year 2

Strategic Business Proposal Page 25 of 35

6: Future Plans

Long-term Opportunity & Development Plans While envisioning the future of Amway, we must consider the trends and insights that are helping to develop and mold businesses into the successful empires that are reaching new heights within the entertainment business industry and marketplace projections (Quaile, n.d., p.91). Digging a bit deeper, Amway must understand what it is that consumers are striving for and adhere to those changes over the course of decades to come.

Overall, keeping current and investing in new and promising technology is absolutely essential in order for the Amway Center to remain a venue not only known to host events, but also to provide exceptional guest experiences. As we venture deeper into a new age of live entertainment, we must be willing to take technological risks that may keep us ahead of the competition. Advanced creative decisions including the application of holographic technology will not only be game changers against competitors, but it will enhance the guest experience at our venue and help increase the number of repeat visitors, therefore encouraging consistent revenue. Holographic technology has sparked interest in countries like Japan and South Korea while here in the United States, it has yet to truly make its impact. But with holographic technology, arenas and productions are given the opportunity to feature performances by artists that may have passed on and “bring them back to life” for audiences that loved them (Bukszpan, 2018), therefore opening our venue up to a wider range of music fans. This kind of technological advancement will definitely put Amway ahead of the game against competitors as well as generate revenue for the Amway Center brand.

More plans that Amway has to develop within the next decade are new collaboration projects. Since Amway is set to develop loyalty rewards via an application program within a mobile device for consumers, projects in development include collaborations with other brands in relation to technology. The Amway Center has found that co-marketing will help increase brand value and ultimately increase consumer experience. Brand collaborations could be prosperous to the entire Orlando area and will help to increase tourism, ignite business compatibility, structure new, strong business models, innovate newfound approaches to Amway’s profitable revenue streams, and strategically advance advertisement amongst two brands (Bernazzani, n.d.).

Strategic Business Proposal Page 26 of 35

7: Appendices and References

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Appendices

Appendix 1: Competitive Analysis

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Appendix 2: Sales Projections

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Appendix 3: Expense Assumptions

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Appendix 4: Income Statements