Friday, January 2, 2009

Part 2, Economics of a Recreational Paintball Facility

Choices, Choices, Choices

This is a multi-part article. To get the full story, you should read "Part 1, Economics of a recreational Paintball Facility" first before continuing on here.

So in Part 1, we determined that the Demand curve for you recreational paintball field was really based on the desire to have fun (Demand curve for anticipated fun) rather than separate Demand curves for all of the products and services necessary to run a recreational paintball facility.

From that we can conclude that, if all other things are equal, the facility where consumers anticipate they will have more fun, will be the facility they will choose to go to. "If all other things are equal" is an important part of that statement. That means cost as well. So if the cost of various facilities is the same, the one that the majority of consumers anticipate they will have the most fun, will be the facility where the majority will choose to go.

But rarely are there two facilities that have the same prices. So although that statement may be true, it is only a theoretical statement and has little bearing in the real world. Right? Well, yes, sort of. This is where most field owners tend to get confused. We have to stop thinking of "prices" of individual items and need to start thinking in terms of the "cost of fun".

Those that already operate a paintball field know that on any day that their field is open for business, the average amount their customers spend tends to be relatively stable. That average will vary from field to field, mostly dependant on the demographics of the people in the area. For instance, in our area, the average spent is right around $60 for a full day of paintball. We can play with our "prices" of individual componants such as field fees, rentals, or cost of paintballs, but the average amount spent by our customers tends not to change a great deal (slight fluctuations from day to day are normal). That means if we charge more for one componant, our customers will spend less on another componant (assuming we don't have all our componants lumped together in a "package"). For instance, if we raised our field fees by $5 and kept everything else the same, our customers would probably spend approximately $5 less on paintballs (buy less paintballs).

Now we have to be a little careful here, because as we determined earlier, consumers are coming to your facility to have fun. Part of the fun at a paintball field is obviously to shoot paintballs. If we play with the prices too much and charge too much for everything but the paintballs, leaving too little money left to purchase enough paintballs, then your customers aren't going to have the fun they anticipated they would have and not come back. Either that, or they will have to spend more than what they would normally allot for that fun, which would be another reason to consider not coming back. Therefore a paintball field's pricing structure has to be such that customers can get all the elements needed to play paintball, including a sufficient amount of paintballs. One relatively easy way to do this is for a field to put together a "package" that will include everything needed and price it at the amount the field has established that their average customer will pay for a day at their field. I'm not saying that is necessarily the best way to do this, but it is one way to do it.

So let's summarize for a moment. We've determined that a recreational paintball facility's customers are really buying anticipated fun, rather than the individual components a field usually provides. We've also determined that the average customer spends a certain "average" amount for that fun they are hoping to have.

So we have to ask ourselves, what is the variable in this equation? Well from a customers' viewpoint, the variable will be the amount of fun they will have. From a fieldowner's viewpoint, the variable would be the amount of paintballs and propellant you are willing to supply for the "average amount" your customers are willing to spend for their day of fun. OK, so let's chew on that a bit. Our consumer has come to have fun and it would make sense that the more fun they have, the happier they will be and therefore will return more often and will be singing a field's praises, which is obviously a good thing from the fieldowner's perspective. To create this fun, a fieldowner needs to supply his customers with everything they need to have that fun, including a certain amount of paintballs for an "average" cost. So how many paintballs? That's really the only variable for the paintball field owner's perspective (well, propellant as well, but they really go hand in hand). How many paintballs is the right amount of paintballs for the average player at the field? The fieldowner wants to make sure the amount of paintballs will be the appropriate amount for the average player at the facility to have the highest amount of fun.

You may have noticed that I have used the word "average" quite a bit thus far. I have done this on purpose, because if you remember, we said fun was a subjective thing. What one person considers fun may not be fun at all for another person. We've determined that the variable for fieldowners is the amount of paintballs provided to their customers. That amount is going to determine the amount of "fun" their customers will have. So more paintballs, means more fun, correct? If a recreational fieldowner supplies 2,000 paintballs to each of their customers rather than 500 paintballs, their average customers will have more fun, right? Wrong! Some of that field's customers will have more fun, but not necessarily the "average" customer. Remember, as a fieldowner, you need to make sure the majority of your customers are having as much fun as they possibly can. That's your recipe for optimum success. Making a few of your customers happy but the majority less than happy is a recipe for less than optimum success.

So more paintballs doesn't necessarily mean more fun. Why not? If I go to a fair, won't I have more fun if I can go on more rides for the same amount of money? Sure I would (unless I go on so many that I might feel ill). Why would that not be the same for the amount of paintballs purchased at a paintball field? To answer that, we have to think about what our "average" players wants out of a day of paintball to achieve their anticipated level of fun. Recreational paintball fieldowners that can figure this out, are well on their way to success.

It's not an easy question to answer though. Recreational paintball players want lots of different things, depending on their experience level. Players playing for the first time or who play very rarely are going to be looking for something different than those that play more often. I still remember my first outings years ago and the fun I had crawling on my belly through the undergrowth of the forest for what seemed like an eternity trying to sneak up on players to surprise them by popping out when they weren't expecting it. I remember being real still behind a bunker while several of the opposition thought they were sneaking up on our fort, only to blast them all when I thought they were close enough for me to get most of them. I remember taking the high ground, lying in the brush, sniping the opposition in the valley (yes, I said sniping). These are all great memories. I also remember talking about these events and many others for a long time afterwards, reliving them over and over again whenever I shared them with friends. Today when I play, I still enjoy surprising the opponent, but I also now enjoy a head to head shootout with a fellow player of equal or better skill. I don't mind a firefight with a fair amount of paintballs involved, although I still prefer a more leisurely pace, with less paintballs in the air.

What I didn't enjoy when I first started playing, was playing in an atmosphere where there were so many paintballs hitting and buzzing past the bunker I was behind that I felt I couldn't move or even stick my head out. I didn't enjoy playing against the local "pro" with his semi-auto Autococker who seemed to have no problems taking most of us out, and not just with a single hit. There were almost always several hits on me, rather than just one. I didn't enjoy the animosity felt for the local "pros" and how the whole mood changed when they played with us and seemed to shoot endless streams of paintballs. And I wasn't the only one that felt that way. There was always lots of talk after the games. There was talk of the good time, but there was also talk of the things we didn't like. Some guys that came to play at our organized outings never came back a second time.

So back to the question. How many paintballs do we give our customers for their allotted budget for their day of paintball? If we give them too few (let's think ridiculously low now and say 100 paintballs for the day), chances are they are not going to have very much fun. If all they think about every time they pull the trigger is "how am I ever going to make it through the day with only 100 paintballs? How am I going to be able to protect myself when I'm surrounded by two players from the other team?" This is just going to cause stress. Stress isn't fun, and we want our customers to have fun.

Well what if we give them 2,000 paintballs? As a player now I won't face the stress of conserving every paintball and will more than likely have enough to get through several fairly heavy firefights, with paintballs to spare. I will really be able to lay down the paint, keep the opponent’s heads down and make big moves on them. When I see an opponent in the open, I won't have to worry and shoot just two or three balls in their direction, I can shoot 10 or 15 (or more) balls and really make sure I get them. But wait! If I can do all that, won't that mean everyone else will be able to do all that as well? Won't I be the one behind the bunker, unable to peak my head out? Won't I be the player that might be caught in the open and have 10 or 15 (or more) balls come at me in a very short period, probably hitting me several times? Yes, of course. It's a two way street. Along with all that comes the total change in atmosphere at the field. The mood or tone changes. With each player shooting that many paintballs we start to see many more confrontations, mostly between players thinking they were overshot and offenders who feel they weren't guilty.

Ok, I'm going to cut to the chase here (finally!). The only real variable for fieldowners is the amount of paintballs to provide for their customers for their allotted budget. 100 are too few, and 2,000 are too many. So the amount lays somewhere in between for the majority of recreational paintball players to have the most amount of fun. What's the number? I don't know. But from experience running a successful recreational paintball facility, I can tell you it is somewhere between 500 and 700 paintballs per player if you have a mixed bag of players. This is an opinion. It's my opinion. But I can tell you from experience, that this is a range that will work for the majority of recreational paintball players to have fun. And if your customers are having fun, they will come back, probably with friends.

Check back soon for "Economics of a Recreational Paintball Facility, Part 3" to find out how you can achieve your success without making your customer feel they have been hobbled.

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