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Date: December 08, 2016
Author: Gina Calvert
How to Boost Race Revenue Despite Declining Registration
The endurance industry is becoming increasingly competitive, a fact well known to Event Directors. In general, competition has traditionally been considered a healthy component in the marketplace. It gives consumers more choices and keeps prices reasonable. Athletes love the increase in event options, but the flipside is that Event Directors are feeling the pinch.
ACTIVE's data and insights platform delivered data and analysis for over 125,000 events across more than 16,000 organizations managed through ACTIVE's software between 2013 and 2015. The resulting data suggests that while competition for participants has generally increased in recent years, opportunity exists for Organizers to grow revenue. Specifically, ACTIVE data suggests that 57% of triathlon Directors saw their total number of event registrations decline year over year. Triathlons are the highest revenue-generating event category, with events bringing in an average of $108,651, marking a slight increase year over year. Despite lower registration numbers in recent years, registration fees increased slightly to an average $183.07 per entry, contributing to the revenue growth of this industry segment.
Beyond pricing increases, however, we have seen many segments innovate their business models to stay financially healthy by utilizing a variety of tactics.
Registration Pricing Strategies
Tiered pricing strategies that provide more opportunities to register at different price points help Event Directors balance ideal registration windows and price increases to encourage maximum registration. Opening registration on race day for the following year leverages the event's excitement to capture commitments, even at full price. For athletes who like to plan their entire year in January, early registration provides the increased possibility of being among the events chosen. Some Organizers choose large increases for those late to register, while some increase prices earlier on. Generally, discount windows that are narrow and calculated to promote the unique value of each race maximize the amount participants are willing to pay.
The upside is that earlier revenue collection gives Event Directors more flexibility in race planning and paying vendors. The downside is that event participants are waiting later to commit to and register for events, therefore being faced with the higher registration fees. Because this can either increase revenue for the Race Director or result in a flat or even slightly lower participation rate, tiered-pricing windows are generally implemented as part of a broader strategy.
Registration Flow Opportunities
The sale of merchandise and gear has long been a supplemental stream of income for Event Directors. However, the cost of inventory can represent a substantial investment and onsite sales are often impeded by athletes' focus on the event on race day or failure to carry cash or credit cards. To offset these obstacles, Race Directors are increasing wallet share by leveraging the online registration process as an optimal and early point of purchase. While registering with credit card in hand, participants are more likely to add other items to their total sale.
Increased merchandising options, such as ACTIVE's partnership with Viralstyle that provides on-demand and direct-to-participant solutions, can increase the initial sale beyond the registration fee without the Event Director's financial liability of unsold inventory. This risk-free option eliminates the need to keep inventory for online items and provides an attractive labor reduction for the event team, as well.
Besides the traditional race t-shirt, other purchasable items allow Race Directors to serve the asks of their athletes while increasing capital, such as offering the option for iTab's customized plates with race finish times for the back of the finisher medal.
Nonprofit events are electing to use technology solutions with a fundraising component integrated into the registration path. As individuals register for an event and set up their fundraising pages, many elect to donate money on the front end to seed their fundraising effort. Charity events that relied solely on event profits are now incorporating peer-to-peer fundraising, boosting the amount of funding raised through the event.
Although not included in ACTIVE's data set, we've also seen positive revenue trends in the area of ancillary ticketing to related events that are part of event weekends. These include tickets for pre-race dinners, VIP area access, food and beverage, limited seating areas for spectators, and other hospitality events.
Data Insights, Marketing and Social Media Integration
As the industry moves forward, registration and revenue trends will more and more be positively impacted by the execution of strategic, omni-channel messaging roll-outs across multiple cost-effective platforms.
In addition, we have seen and expect to see more Race Directors leveraging market analysis and race-specific data to understand the underlying factors in trends-such as gender breakouts, favorite event types, timing and locations-enabling them to increase the effectiveness of their marketing efforts to raise both registration and revenue rates.
Gina Calvert is the Senior Marketing Writer for ACTIVE Network, providing marketing and business resources for active lifestyle organizations across a range of markets, including government, nonprofits, camps, schools and endurance events, for more than six years.
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