Cover Story
(October 2004)Cover Story
(October 2004)Coast to Coast: offering
HOT
value
You've seen the products at shows and were impressed. Now, get to know the people behind the games.
Gary Balaban and John Maurer had one thing in common when they started college: Both had spent plenty of time in their local arcades when they were younger. OK, maybe that's not the stuff of legends, but when the two met while majoring in electrical engineering, there was a spark that would ignite into an outstanding company offering exceptional games.
Owner
John Maurer
John explained that their electrical engineering class was a small group so it was almost inevitable that they would become friends. "We went to college for electrical engineering and it happened that we got into it the first year they offered the course with a computer option.
Only about 35 of 100 or so graduated on time. Basically, we were trained to be field technicians for digital technology. However, all 35 of us applied for jobs in that field and none of us were hired. I took a job at Integrated Ionics, which was bought by I-Stat. I moved to Canada with the company and designed, built, and maintained bio-medical manufacturing equipment. I worked on making a hand-held blood analyzer."
Owner Gary Balaban
In addition to hanging out in arcades, Gary had worked in one during high school and started a small route while he was still in college. He started with just one location but was able to make money. He explained, "My first games were a used Dig Dug and Xevious. When I saw it was profitable, I got more locations and bought routes from those getting out. I also had The Game Room arcade on the Jersey Shore with a silent partner."
Ironically, Gary was just beginning as a serious operator at a time when the industry took a nosedive and no one could predict where or when it would stop. Gary admits now that it seemed like bad timing but he had a plan. He explained, "In 1987 there was a glut of machines. I bought my first games for $150 or less. I didn't even consider brand-new games. I remember the Mondial salesman calling to tell me he had games that were one step away from the dumpster and I'd buy them!"
Gary continued, "I operated in locations that didn't make the kind of money other operators expected, but they were good for me. Even though I operated used games, I maintained excellent customer service. I knew my locations, kept my machines spotlessly clean, and was available for service calls any time."
There's another chapter in John's story. It's a stage in his life that he credits with building a foundation of a solid work ethic you can't simply find; you learn it from experience. It began when he was just 11 and in charge of a paper route. "This is where I began to hone my business skills," John related. "I began with 100 houses and for seven years I built it up and made it work. I learned from that experience probably more than I realized."
Even though Gary and John had gone their separate ways after college, they remained friends and talked often, sometimes on a subject they knew well: computers. In conversations, they came to the conclusion that there was a need for memory upgrades and promptly formed Coast to Coast Memory to fill that niche. According to Gary, "We were buying used memory and selling it to others via mail order or the Internet. We then evolved into developing and selling new products."
Coast to Coast Memory is still an integral part of Gary and John's ventures. In fact, that company is now in the same building as Coast to Coast Entertainment, which has been a distinct advantage we'll touch on later.
As mentioned earlier, John was working in Canada in the biomedical field when he first partnered with Gary. After returning home and marrying Kim, who he met in college, there never seemed to be enough money to pay two salaries. John decided to look for work and Gary continued to manage the arcade. "Our company was constantly growing," John explained. "Our priority was to hire the best people and we needed to pay them well to keep them. So, I got a job at M&M Mars taking care of their computer networks throughout North America.
"One of the lessons I learned there is that information is the key to business. Knowing what to do, employing the right people, and having information integrity are worth almost as much as the product. I also learned a lot about customer service, which is so simple yet overlooked by many companies: Give the customer what he wants, treat him like you want to be treated, and you'll have a loyal customer."
John added, "In 2001 when the crane and merchandise business began to snowball, Gary and I decided it was time for me to be a part of the day-to-day operations of the company.
Enter the crane
About the time the men started Coast to Coast Memory, John bought out Gary's partner in The Game Room arcade. Now they were not only partners in the memory company, but also in the arcade, which has deep roots in the industry beginning long before Gary became involved. Owning the arcade offered valuable insight in their future business enterprises.
Gary and John were also building another route, which along with the arcade was a catalyst for starting Coast to Coast Entertainment. Gary explained, "As operators of an arcade and a route, we were buying games but we weren't that happy with the choices. One day we said, 'Hey, we can build games better than what we are buying.' In 1998 we were at IAAPA [the International Association of Amusement Parks and Attractions] trade show and found a company that wanted to import or sell cranes into the United States."
Gary continued, "It was an amazing product at a remarkable price. I looked at John and said, 'We have to do this!' We brought in a container of the first generation of cranes called Millennium 2000. We took half for our locations and another arcade took the other half. We literally tested all summer, a whole season, before we promoted the product to other operators."
They did well. So well that Gary claims he knows where there are machines from that first shipment and those locations simply won't trade them in!
It wasn't just the price and it wasn't only the looks of the machine that impressed John and Gary, although both made them take another look. There was way more to it, as Gary pointed out, "Some features that impressed me were built in to make it more operator friendly, such as how easy it was to adjust the claw coil. On most machines that chore was very cumbersome. You had to go in with a meter, find out exactly where to hold the meter, and dial in the correct voltage. On the Millennium 2000 this feature was built in and you could see everything. It was brilliant. There was a better sound package than anything I'd seen and much more flexibility."
Gary continued, "John and I started Coast to Coast Entertainment to bring in these extraordinary cranes. But I have to admit it wasn't easy selling them at first. We were the 'new guys.' People didn't know us, weren't sure they could trust us, and were trying to figure out why the price was so low. They had that you-get-what-you-pay-for mentality and thought that if the price was low, so was the quality. However, nothing could have been further from the truth. Those who bought them were our best advertisement because they kept buying them."
Current games
After the sales of the Millennium 2000 cranes took off, Gary and John found another product they wanted to market: skill-stop machines. "We met Al Girola, who was making skill-stops," Gary began. "We liked his games and approached him with a plan. We told him that with our contacts we could get the games out all over the country. We formed a partnership for him to build a new line of skill-stops with better graphics and better engineering. The company makes only skill-stop slots: Freedom, Extreme 777s, Diamond Mine, Home Run, Jumping Cherrys, Rockn Reel, Bikes n Bars, Fargo the Penguin, and Underwater Treasure."
According to Gary, these are "Redemption Legal" for redemption use only, token or coin in/ticket out with payouts from 300 to 900 percent. Features include awesome sounds, full bookkeeping cabinet, upright or sit-down versions available, and custom speech attract mode and receipt printer optional. "These will be the highest grossing machines in your family entertainment center," John said.
Coast to Coast also offers Lotto Sevens, a kit for Cherry Master/8-Liners or as a complete game. Generally this machine is a lottery number picking machine. For 25 cents the machine picks three random numbers. As an extra bonus, depending on the combination of the numbers that the machine picks, you can win chances to play the game more times and have the machine pick more numbers.
After Coast to Coast introduced the Millennium 2000 and eventually retired that crane, it introduced the blue 31 and 46 Challenger crane. "When we retired the Challenger name, we introduced two black cranes: Hot Stuff with its trademark flames and Prize Depot with a train theme. These black cranes are our current models available in 31- and 41-inch sizes. The 31-inch model can be purchased as a plush or candy crane, advised Gary.
All of Coast to Coast's cranes have a variety of features: play-until-you-win selectable, all metal construction, microprocessor control, great sound and voice, joystick control, tempered safety glass, recessing rope light in both corners, electronic coin mechanisms, adjustable claw strength with built-in meter, stacker dollar bill acceptors (available), optical prize detection system, easily accessible service panel at the front of the games, customer graphics (available), high security cabinet, big locking wheels for easy moving, and prize and money meters. They're easy to fill, and there's an extra deep product area with an included platform (removable on the 31-inch model only).
Coast to Coast also offers a new crane, Jewelry Stop, based on the Plush Depot platform. The Jewelry Stop was made at the request of customers who had switched to operating jewelry in their cranes instead of plush. "This new model has been such a hit for us," John relayed, "we could not keep them in stock and we couldn't make them fast enough. They sold so well, in fact, that we didn't even get any from the production line to use in our own arcade and route this summer! This new model comes standard with heavy-duty glass shelves for displaying the product and a special claw to handle the jewelry as well as a base of gravel to enhance play.
"When we introduced the Jewelry Stop crane we also spent quite a bit of time sourcing new jewelry products to add to our line of mixes. We looked at what the competition was selling and pretty much said, 'This is what my grandma would like but she does not play cranes!' We decided to focus on a new modern mix of hot, flashy, shiny jewelry to appeal to the people we see playing cranes. We call it our Bling Bling All Hot Jewelry mix."
Gary hinted that there are some other fantastic products in the works. He told us he can't talk about them just yet, although you can hear in his voice that he'd love to! Since John and Gary are both engineers, they will come up with an idea, often do their own electronics, and then use a contract manufacturing facility to manufacture the products.
Customer service
Coast to Coast Entertainment is a stickler for customer service just as they had been on their route and are in the arcade. John already told us that he learned a lot about customer service in his other work experience, lessons they have put to the test.
Assistant Dawn Balaban
"If a customer is going out to a bowling alley to fix a game, they can call us if they are uncomfortable with programming or want to make a change. They know we won't abandon them," Gary advised. "We do about anything we can to assure our customers that they are getting the best service. Why are we so focused on that? It's easy. We know how they feel, we know what they need, and we know what they want because we've walked in their shoes; we've been there. We want to treat our customers like we would like to be treated. For example, we will FedEx parts overnight at no charge, only asking for the original part back. Our motto is that no machine will ever be down more than 24 hours."
Merchandise
After finding overwhelming success with its line of cranes, the next logical step in the evolution of Coast to Coast Entertainment was in the area of merchandise. Gary said, "When John and I had to buy plush from others, we always seemed to get some first-rate items along with some horrible ones we'd never use. We started looking into other options and decided we could do our own mixes. Our mixes don't have any of that slum that no one wants, only 100 percent usable material. Combine the plush with hard goods merchandise (laser pointers, small radios, light-up items, etc.) and I would describe our crane mixes as superior. If you put your hand in a bag of one of our mixes and pulled out items, you wouldn't find one you didn't like."
He continued, "We also have the luxury of buying merchandise for our arcade and use that information to know what works and what doesn't."
John admits, though, that it's not an easy job. "Gary and I spend time at trade shows throughout the country to see what's hot. We talk to everyone we can. We visit other arcades to see what they are stocking in their cranes. We play with everything. If it looks cool to us, we'll try it."
John added that his two children, Andrew and Christopher, ages five and three-and-a-half, help in knowing what to look for. "I listen to them a lot. I check out what they enjoy watching on TV and items they want in stores. They drive a big majority of what I want to buy. There's no better way to find out what kids want than to listen to one." Gary doesn't have the luxury of kids' opinions yet, but that will change in December when he and his wife Dawn will become parents for the first time so it won't be long!
Gary added that Coast to Coast specializes in handholding, as he explained, "There are many who are new to the crane industry and don't know where to start or what to buy. We explain percentage and let them know that if they use good product, set up and make sure everything is right, they'll be successful. Our machines are made so that if you can hold a screwdriver, you can fix just about anything that could possibly go wrong."
The most popular mixes for Coast to Coast are the Generic Plush mix ($.85 average), Extreme Generic Mix ($1.25 average), 20 percent Licensed mix ($1 average), Jumbo Jr. mix ($1.75 average), Jumbo mix ($2 average), Jewelry mix ($1.99 average), Combo mixes (80 percent plush and 20 percent electronics, $1 average), and Beanie mixes ($.85 average).
The company has recently added a new Jordache line of jewelry that is perfect for jewelry cranes and redemption counters. The mix comes with bracelets, rings, and earrings.
John said, "We pride ourselves in making all of our mixes without the use of junk or filler merchandise. All of our mixes come with 100 percent usable merchandise, we even make a promise to our customers: If there is anything in the mix that they don't find acceptable, we will replace it free of charge. If we wouldn't use each item we put in a mix in our own arcade, then we would not put it in a mix and sell it to others. We also offer free shipping on all of our mixes without any minimum order."
The people
Gary and John put their staff at the top of their list of priorities because as much as they tout exemplary customer service, it just wouldn't be possible without a dependable, enthusiastic, and dedicated staff. "We've kept some of our original employees," Gary said. "Some of the key people with Coast to Coast Memory are still here after 10 years. We are going on our third season with the same managerial staff at the Game Room, which has tremendous value when it comes to making our customers happy. Our staff understands our values, respects our goals, and it shows."
John added, "Our first employee, Beverly Ruhman, came from the arcade. We brought her into Coast to Coast because she works hard. We try to take care of our people. The staff is the most important part of any business; our people are vital to us. To show you just how crucial they are to us, there have been years that Gary and I had to take a pay cut to give them bonuses because they deserved them."
He continued, "One of our key people is Carlos Colon, who is in sales. He came from Bonita Marie and brought ideas about mixes and different merchandising. He is responsible for allowing our company to add sports mixes and jewelry, which we might not have gotten into if not for him. He has the experience, the knowledge, and we trust his opinions and ideas."
"Another person we could not do without is Paul 'Chuck' Skroczky, who was originally with Coast to Coast Memory. He oversees building all the mixes and the final assembly of the machines. He backs up tech support and we say that 'quality control' is his middle name!"
The latest addition to the staff is a familiar name in industry circles, Jim Chapman. With almost 20 years of experience with companies such as SNK, Taito, and Sega; working with distributors; and having his own operating company, Jim has the skill, understanding, and contacts needed to work with distributors. Jim will head up Coast to Coast Entertainment's entry into the distributor sales world.
Jim said that he is impressed with the company from its staff to its products. "I've been out of the industry about a year, but from everything I've seen, there just aren't enough good games out there. Coast to Coast has the games operators demand and there are more in the works. These guys have so much exuberance it's contagious. They are optimistic and understand what operators want."
Gary said, "Since the companies are now in one building we are no longer running back and forth. It works out because we have employees who can rotate between the two. We might need a little extra help in Coast to Coast Entertainment and we can get a hand from the Coast to Coast Memory staff. Almost everyone floats between companies when a need arises."
Future
Gary and John agree that the direction of the industry is not toward high, over-priced equipment with a poor return on investment (ROI). "We see an enormous need for reasonably priced machines that will provide the best ROI operators can have. The direction is to offer high quality machines that offer good ROI and don't forget the player. Then everyone can make money."
Gary and John said they want to be known as the value company. "We don't mean we want to offer cheap products, we want to give the industry games and products that offer value. The bottom line," said John, "is we want you to get a crane out the door so it will be paid for in eight months to a year."
Coast to Coast Entertainment's goal is to bring out two games a year. "We understand the market from many levels," noted Gary. "We'll use the knowledge we've acquired as operators and the understanding of our customers' needs to offer the best products at the best prices. That's our future, and it's tied into the future of the industry."
Flash is the company's resident cat.
Tom Costello and Paul Chimenti in the Sales Department.
Executive Parts Coordinator Bill Skroczky
Stephanie Salazar is in the Order Fulfillment Department along with Joseph Ferrer.
Debbi Falzini is in Shipping and Receiving.
Sales Manager Rich Newman
John Paccione heads up the Internet Graphics Department.
Michelle Fazio in Shipping and Receiving.