Oops! Too late!
As a member of the paintball industry trying to scrape together enough to pay my bills every month, it is important that we attract as many people to our field as we can, but still make enough money from the average customer, so that at the end of the month, we’re operating in the black. This isn’t just a hobby for us. It’s our livelihood. Therefore, we need to make sure our customers are having fun and that they feel they have received good value for the money they spent.
Our customers will not just compare that value to other paintball fields they have gone to, but also all other goods and services they spend their resources on for entertainment. Many of our customers have never been to another paintball field, so it is of utmost importance that we are competitive with other forms of entertainment.
Value is what is important here. There are two main components that our customers will look at when judging the value of our product/service. First there is the cost. Is $60 spent for a day at our paintball field better value than $20 spent to go see a movie (including some food purchase)? Is $60 spent for a day at our paintball field better value than $100 spent playing 18 holes of golf? There are literally thousands of “other” choices that our potential customers have to choose from.
The second component is the quantitative measurement of entertainment received. The two really go hand in hand. But by quantitative measurement I mean; is the time spent playing paintball more pleasurable than the time spent on the other activities that are competing for our potential customer’s resources?
In the end, we need to create something that enough people will find entertaining enough to willingly spend their money on; enough money to keep us in the black. So we analyze trends. We experiment with ways that we think we might be able to provide our customers with better value, while still staying on the black side of the bottom line.
In the article below, Correlation does not imply Causation, I described what happened to our attendance numbers when we lowered and then raised our paintball prices a few years back. I’m not going to go over it again. Anyone interested (and you should be) can read the article if they haven’t done so. The results showed us that lowering our paintball prices significantly, did not, in the long run, secure us more customers. On the contrary, it resulted in less customers for us. But how could this be? One of the two main components of the entertainment value our customer looks at is cost. We didn’t change anything else, other than the cost of paintballs. Should the value of our product/service not have been increased from the customer’s perspective? We gave them the same thing for less money.
Or did we provide the same thing for less money?
Let’s analyze what happened. First, we lowered our paintball prices by approximately 37.5% (a case of paintballs went from $160 to $100). This initially resulted in an almost immediate influx of more customers. The most noticeable were the regular players as they pay more attention to current pricing at paintball fields, but we also had a slight increase in rental customers. A very noticeable thing happened. We had more customers but they really weren’t spending any less money on average, especially the regular players. Instead, they were buying more paintballs. So the “cost” component of our product/service hadn’t really changed for our customers. They were still spending roughly the same.
On the other hand, our product/service had changed. How? Well at our former paintball prices of $10/100, $45/500, or $160/2,000, our average customer was shooting around 600 paintballs. At the new pricing level of $7/100, $30/500, or $100/2,000, the average number of paintballs shot per customer increased to approximately 900 paintballs. This approximate 50% increase in paintballs shot made a significant and very noticeable change in what our customers were experiencing. We noticed much more “attitude” at the facility; we had more altercations between customers; there were more accusations of overshooting; and our staff was grumpier because of the change in attitudes of our customers.
Basically, it seemed, our product/service had decreased in value for our customers. Apparently, the average person doesn’t like playing paintball as much with the average player shooting 900 paintball compared to the average player shooting 600 paintballs. This started to become apparent when, within a few months, attendance leveled off to what it was before the price drop and then eventually lower to what it was before the price drop. It took us a while to figure this out of course. It didn’t make sense to us at first. Why would our customer base start dropping when we made it more affordable for them after several years of steady increases? We analyzed the situation and decided that we would return our prices to what they were before.
Looking back, we probably would not have noticed and been able to analyze the situation if we had dropped our prices at a slower rate. I think this is what has happened in the paintball industry in most of the rest of North America. Over time, fields have lowered their prices of paintballs very substantially. But of course, not many of them did it overnight. It was more of a trickling in price lowering over a period of several years. Had we only lowered our prices by $10/2,000, we probably would have noticed very little change. If that $10 had undercut our competitor and assuming all else was equal, it would have probably increased our customer traffic a little and may have made up for, or even worked in our favor, the change in mark-up of the paintballs. But we most likely wouldn’t have noticed a huge change in “attitudes”.
If we had lowered our prices in $10 increments only every 4 months or so, we would probably have not clued into the fact that it was actually the drop in paintball pricing that had decreased our attendance when we reached the $100/case pricing level. We probably would have figured that we would have to lower our prices further, to attract higher numbers of customers, especially if our paintball competitors had been following suit. But in reality, it would have been the change in value that our customer was getting that was the reason for the decrease in attendance.
Has anyone else noticed that the numbers of players has decreased in most of North America over the past years as paintball prices have dropped down to the ridiculously low prices charged at most recreational paintball fields? I certainly can’t be the only one that has picked up on this trend. But maybe all we need to do is listen to all the customers on paintball forums telling us they would play a lot more if paintballs were priced $30/case instead of the ridiculous $50 or $60/case charged at fields that are obviously ripping people off.
All I can tell paintball players in general is the same thing I tell our potential customers when they ask why our paintball prices are higher than our competitors; “Be careful what you wish for”.
But is it too late for most of North America? Have paintball fields shot themselves in the foot? Has paintball participation peacked and is now continuing on a downhill slide until it reaches the point where the number of participants matches the value in what is provided at the average paintball field in North America these days? Or are there entrepreneurs out there that have what it takes to reverse the trend? Only time will tell.
Sponsorship in Decline?
4 days ago