The Athlinks report “2022 End of Year State of the Industry” is rich with valuable information, enhanced by meaningful graphics. A lot of good useful stuff. To download the .pdf go to https://go.chronotrack.com/athlinks-state-of-the-industry-2022.
But what’s with the curious advice, “Saving on costs where possible in order to lower registration fees may be an impactful strategy as we enter 2023”?
Saving on costs, yes! Lowering registration fees, no! That’s the kind of “impact” you can do without.
In fact, there is no better time to raise fees than now, when buyers have become so inured to sticker shock that small increases on goods and services are expected if they are even noticed. If you maintain your old fees during inflation, then you are already discounting your services in constant dollars—as much as 9% since 2021, 16% since 2019. Just don’t overdo it—boosting your 2019 fees by 16% could risk a fierce backlash.
Indeed, the pie chart near the end of the Athlinks report itself strongly suggests that modest price increases or holding fees steady should not be much of a barrier to participation. In the pie chart “Why haven’t you raced since before the pandemic?” you see that “Trying to save money” is only 6.9% of the pie. It’s outweighed by “temporary injury” (13.2%), “out of the habit” (13.2%) and far outweighed by “out of shape” (18.1%). Even “Not as many events” comes in at 9.3%, suggesting that runners might be willing to pay a bit more just to have a race to go to at all. (Other less relevant categories in the pie chart add up to the remaining 40%.)
When we wrote an article on inflation and road races back in the July issue of Road Race Management Newsletter (“The Inflation Squeeze”), we found that six of the nine experienced race directors we interviewed have either upped their fees by $5-10 or are planning to. Jon Scott at Maxwell Medals observed that travel and hospitality expenses have grown out of proportion to fees, and in “destination races” with a customer radius of a thousand miles or more, those expenses can dwarf the race registration fees.
Responding to our article in the August issue of Road Race Management Newsletter, Michael Iser wrote:
“I doubt very much that shoe companies will worry about an additional $5 charge to their product, when that is what they need to do to stay in business. Yet our races wring their hands at such an increase because of what their customer might say or do. However, if you don’t charge what you need to stay in business, at the end of the day there won’t be a business, and the runners will not have a place to go. In addition, there are ways to ‘add on’ benefits that cost you nothing to offer, but might make a difference to the bottom line.“
(Iser has worked with many small businesses and insures events of all sizes around the United States from a World Marathon Majors event to local 5Ks. In addition to being a member of Road Race Management, Mike is a member of RUSA, IIRM, ESA and The Global Crowd Management Alliance.)
Running shoe prices are a good example of how negligible small price differences are in relation to the value for the customer. When you find a shoe you really like, are you going to reject it in favor of a similar shoe that you don’t like as much, because it costs $10 more? All the hours and miles you will be running in that shoe make the price difference moot. (Incidentally, this argues for buying shoes in a running shoe store, where you can get to try on several pairs and even trot around in them on the spot. Think of the many times when these objects will become almost literally part of you.)
Michael noted that insurance costs have been creeping up and insurance coverage has been creeping down. Better to find a broker than buy online.
“Yet many race directors are willing to go online to buy insurance, just so they can secure their permit, instead of searching out a broker who can provide advice and support. Your insurance broker should not be a name in your Outlook directory, but the person you should contact along with your lawyer and accountant when critical decisions need to be made.”
As with the shoe, so with the race in terms of value to the customer. Make it better, make it more exciting, make it different, make it imaginative, and market the heck out of it—and then the customer will shrug off a modest price increase to enhance their quality of life. And if you choose to keep your fees as is, no one will have reason to complain.