By now I'm sure most of you have heard about the fiasco surrounding the Naperville Marathon.
In short, the race directors announced this new race, in the western suburbs of Chicago. They had it priced at $150, which included the usual perks along with a nicer-than-normal shirt and free photography. Potential racers flipped out about the high price on social media, and the race organizers capitulated and lowered the price to $105 a few days before registration opened.
And then the race sold out on the very first day it was open.
Now, my training in economics extends only as far as two semesters of intro in college, but I don't really think it takes an advanced degree to draw some conclusions here. Namely: demand for this race far outstripped supply, and as a result the race directors undercharged for the race. (Granted the price lowering probably did engender some non-quantifiable good will.) The end result is that consumers were left paying much less for a race than they would have.
Not that anyone is asking me, but in my opinion they should have offered a tiered system for race fees. Not the typical tier, where prices go up at a certain date, but instead a tier with more services.
Offer the first 500 slots for a finite window of time at $75. You don't get anything but the race for that amount. The next 500 slots cost $125, but you get a shirt and a medal. For the next 500 slots, offer a shirt, a medal, race photography, and charge $150. For $175 you can add showers and a finisher's meal. Charge $200 for the rest of the entries. The race will still sell out.
And before you can protest, this wouldn't actually be that hard to do logistically via tabs on one's bib or another simple system like they already do for race shirts. After the Mt. Washington Road Race, I didn't get my meal because I'd lost the small bib tab. I was annoyed, but it was my fault. Life goes on (and I got Dairy Queen, anyway, which was way better).
Race directors are often short-sighted, wanting to get their races full (and therefore get as much cash upfront) as quickly as possible, even if it means losing out on large amounts of potential profit they could make.
For Naperville, there's also a marketing issue. They opened their registration more than two weeks before registration opens for the Chicago Marathon. Chicago will sell out, and that will leave a lot of local runners seeking reasonable options - runners who would have likely paid (and paid well) to run a marathon in Naperville. $200 seems unreasonably high today. But with Chicago at $175, it's easy to see how a local runner could (and would) justify it to themselves - I mean, the last time I ran Chicago, I paid $150 for the registration, plus $250 for the hotel - and I had a place to stay, with my family. If the directors had waited, or at least adjusted their marketing around Chicago (maybe opening a few slots in advance but then holding off on open registration until after Chicago opens), they again could have used this as opportunity to make more money.
I'm as big a fan as anyone of lower race entry fees. That said, there is a huge demand for races right now, and arbitrarily lowering fees to increase accessibility or because you don't like high prices isn't going to work as long as people are clamoring to run races. We need the number of entries in well-run races (including more, newer races) to catch up with the number of runners willing to pay pretty much any asking price for the ability to pin a bib on themselves.
An ineffective pricing model like this does a disservice to both the runners and the organizers: organizers are left making less money than they could, and cheap runners like me are left competing for limited entries with runners who are willing to pay more than I am.
In short, the race directors announced this new race, in the western suburbs of Chicago. They had it priced at $150, which included the usual perks along with a nicer-than-normal shirt and free photography. Potential racers flipped out about the high price on social media, and the race organizers capitulated and lowered the price to $105 a few days before registration opened.
And then the race sold out on the very first day it was open.
Now, my training in economics extends only as far as two semesters of intro in college, but I don't really think it takes an advanced degree to draw some conclusions here. Namely: demand for this race far outstripped supply, and as a result the race directors undercharged for the race. (Granted the price lowering probably did engender some non-quantifiable good will.) The end result is that consumers were left paying much less for a race than they would have.
Not that anyone is asking me, but in my opinion they should have offered a tiered system for race fees. Not the typical tier, where prices go up at a certain date, but instead a tier with more services.
Offer the first 500 slots for a finite window of time at $75. You don't get anything but the race for that amount. The next 500 slots cost $125, but you get a shirt and a medal. For the next 500 slots, offer a shirt, a medal, race photography, and charge $150. For $175 you can add showers and a finisher's meal. Charge $200 for the rest of the entries. The race will still sell out.
And before you can protest, this wouldn't actually be that hard to do logistically via tabs on one's bib or another simple system like they already do for race shirts. After the Mt. Washington Road Race, I didn't get my meal because I'd lost the small bib tab. I was annoyed, but it was my fault. Life goes on (and I got Dairy Queen, anyway, which was way better).
Race directors are often short-sighted, wanting to get their races full (and therefore get as much cash upfront) as quickly as possible, even if it means losing out on large amounts of potential profit they could make.
For Naperville, there's also a marketing issue. They opened their registration more than two weeks before registration opens for the Chicago Marathon. Chicago will sell out, and that will leave a lot of local runners seeking reasonable options - runners who would have likely paid (and paid well) to run a marathon in Naperville. $200 seems unreasonably high today. But with Chicago at $175, it's easy to see how a local runner could (and would) justify it to themselves - I mean, the last time I ran Chicago, I paid $150 for the registration, plus $250 for the hotel - and I had a place to stay, with my family. If the directors had waited, or at least adjusted their marketing around Chicago (maybe opening a few slots in advance but then holding off on open registration until after Chicago opens), they again could have used this as opportunity to make more money.
I'm as big a fan as anyone of lower race entry fees. That said, there is a huge demand for races right now, and arbitrarily lowering fees to increase accessibility or because you don't like high prices isn't going to work as long as people are clamoring to run races. We need the number of entries in well-run races (including more, newer races) to catch up with the number of runners willing to pay pretty much any asking price for the ability to pin a bib on themselves.
An ineffective pricing model like this does a disservice to both the runners and the organizers: organizers are left making less money than they could, and cheap runners like me are left competing for limited entries with runners who are willing to pay more than I am.
