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Posts Tagged ‘economy’

Slower Marathon Times lead to Higher Costs

Tuesday, November 3rd, 2009

The Biz Runner wrote about an article in the New York Times named, “Plodders Have a Place, but Is It in a Marathon?”  The article brings up the fact that Marathon times have become higher, which has diluted the accomplishment of finishing a marathon for all runners, no matter what time they finish with.  They have said that slow runners have disrespected the distance and have ruined the marathon’s mystique.  Here’s a solution, if you think running a marathon isn’t as big of an accomplishment anymore, run a 50K.  Problem solved.

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Actually, not problem solved.  Chris Burch, race director of the Des Moines Marathon told the New York Times, “For every race director, there’s a very fine line between putting on a community event and putting on a race.”  Marathons take a lot of capital to be run successfully; therefore, you have to appeal to all types of runners, both the racers and community runners.  So how do you make a race attractive to all runners while not diluting the accomplishment for the more experienced runners?

The Berlin Marathon solution is to put the responsibility of finishing the race on their entrants.  They tell them before they sign up that they must run the race at a minimum pace.  Then during the race, the Berlin Marathon sends out a team running at that pace.  Anyone that falls behind that team will be asked to leave the race course.  This solves both problems, you get the entry fees of the slower runners, while enforcing the measure of accomplishment for finishing your event.

The Biz Runner pointed out that the longer runners are on the course, the more costs incurred to race directors for police on the streets, race workers, to pay the city to close the streets for the race, which can be the largest fixed cost to race directors, and much more.  His solution is to incrementally increase marathon runners entry fee based on time; going as far as to suggest billing your credit card based on your official finishing time.  But at what time do you start increasing fees?  He suggested the Oprah line; to increase fees incrementally starting at Oprah’s finish of 4:29:15 in the Marine Corps marathon in 1994.  The Oprah line is set at 4:30:00.  Are you above or below the Oprah line?

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While the Oprah line may be a great way to make a goal time, it may not be the best way to charge slower runners higher fees.  If race directors increased fees based on performance, I believe it should be more standardized and mitigated for race conditions.  Also, there should be a flat fee in order to be fair, letting runners know exactly what costs they may incur from running at a slower pace.  This can be done very easily using a bell shaped curve.  Race directors can take the mean marathon race time, then take two standard deviations to the right of the mean in order to encompass the top 97.7% finishing times of their marathon participants.  The bottom 2.3% of runners are often outliers in which the variable cost incurred from each minute slower is exponential.  A race director could be paying for 2-3 extra hours of race time for only 2.3% of all participants!  These runners should be asked to pay a higher entry fee to pay for this extra cost, instead of it being covered with all runners race fees, no matter how long they use the race course.  Also, by charging these runners more, less of them will elect to run the race unless they are serious about it, making the accomplishment of finishing your race more desirable.  Of course, you will always have 2.3% of your customers unhappy that they have to pay extra to run your race, but they are the ones using your product, a marathon race, more than the others customers.

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Runners are runners and all should be able to try to reach a goal of finishing a marathon; however, some may need to re-think signing up for a large, expensive marathon if their time is in the bottom 2.3% of all runners.  They should try running 26.2 miles on their own first to see if they fall in that lower category of runners.  You don’t need a race to accomplish your goal of running a marathon.

Run to Lower Your Health Care Cost

Thursday, May 14th, 2009

Here’s a good reason to start running, it saves you money.  Brilliant!  Add in some trail running and a website that is free to access that information and you’ve got value while building your wealth; what a combination!  You’ve heard someone say, “Well, at least he has his health.”  That’s because being sick is so expensive.  I came across an article yesterday about President Obama praising REI for their employee health care practices.  President Obama is so extreme.  He said:

Besides offering insurance to part-time workers, REI, according to a statement from the White House, “offers employees support for outdoor activities ranging from outdoor gear and apparel discounts, free rentals, and outdoor challenge grants.  REI employees can earn extra healthy lifestyle dollars to put toward the cost of coverage by engaging in specific “good behaviors,” such as getting regular aerobic exercise.  REI also supports personal health goals and provides equipment support, discounts, and time off so employees can achieve their goals.”

This is a great policy and I, like President Obama, applaud REI.  They understand the extra time off or discounts on equipment actually saves them money in the long-run because of the decrease in health care benefit costs.  Large American automobile manufacturers are learning this lesson the hard way right now with high health care costs to retired employees contributing to their bankruptcy.  Companies must encourage a healthy lifestyle now so their employees will live healthy later in life.  For the general population, look no further than Jazzercise to remain healthy in your later years.  Jazzercise could be the answer.  It’s combines the power of Jazz with benefits exercise!

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REI is not the only company that encourages their employees to take better care of themselves, many organizations offer healthy meals and on site gyms in order to lower health care costs.  I am a big proponent of this.  Solve the issue before it becomes a problem.  It puts the ownership of caring for health back on the individual rather than relying on a program that incentivizes social loafing and well, loafing in general.  As a runner and an overall fit person I am not really into paying high insurance premiums to help other, less healthy people who can easily become more healthy, which would relieve the stress they are putting on the system.  Why isn’t there a “runner’s” health insurance policy available?  Because you don’t need it.  Reading this blog is insurance enough that you will healthy for years to come!

I commend REI for encouraging their employees to live healthier lifestyles.  A healthy employee is a happy employee; and costs less, which leads to a happy employer.  Everyone’s happy when you go running!

Trim the Fat. Run a Cheap Local Race.

Thursday, April 16th, 2009

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I was talking to some friends last night about the economy and the fear of many individuals about losing their jobs.  I told them a penny saved is a penny earned (I came up with that).  If you aren’t earning as many pennies as before, then save the pennies you’ve got.  Don’t spend and you won’t need money.  Even Americans are saving!  This from a country that consumes probably about 110% of their income.  In last quarter disposable income dropped by 1.5% but people have increased their savings by 11%.  How can they do this?  By not spending.  However, if you must spend, buy running shoes or purchase a race entry.

Your local 5K and 10Ks should spend less to stay profitable as well.  Smaller, local races are a lot of fun for all participants.  They are a great way to bring a community together, try to run a PR, and keep you motivated, but they should stay in that niche.  People run these races for different reasons than they do larger races and marathons, so why try to offer the same product?  In order for small races to maintain their revenue stream in a poor economy they must lower their entry fees.  Lower entry fees?  Wouldn’t that decrease revenue?  Maybe, but these small races need to understand their demand is elastic.  As people decrease their discretionary spending, running a local 5k road race is one of the first things to go.  It makes sense.  Running a 5k really isn’t a necessity, even for the most avid runner, especially when there is an almost perfect substitute available, running 3.1 miles on the road…for free.  How do you compete with free?  Get as close to it as possible.  Cut costs and offer a cheaper product, Sam Walton.

T-shirt: Why does every race offer a ‘technical’ T-shirt these days?  I personally like to receive them but I can’t imagine these T-shirts being cost effective.  If your race relies on sponsorship logos on your T-shirts, then use the traditional cotton T-shirts.  They’ve sufficed as fine clothing for about 90 years.  If you don’t have sponsors donating to cover T-shirt costs then think about cutting out the T-shirts all together.  Trust me, runners have enough T-shirts.

Accurate Timing: I’m definitely into accuracy.  I like to know exactly what time I ran…plus or minus 5 seconds.  However, these smaller races don’t need chip timing.  I know it is more convenient for compiling and distributing race results, but you can do this manually like it has been done for 80 years.  The main benefit to chip timing is accounting for the difference in the race clock and your actual time.  In smaller races this is usually within 5-10 seconds if you are a serious runner.  It is already an unwritten rule, faster runners start close to the start line, slower runners line up in the back.  Look, your runners are already lining up in order of preference for an accurate time!  Without you saying or doing anything.  Now, that’s an efficient market!

Food and Beverage: This can be minimal.  Some bagels, bananas, Gatorade and water.  Try to find somewhere that sells older baked goods for cheaper priced bagels.  Runners don’t care, they are just trying to replenish their energy.  If you live on a tropical island, climb a tree and get some bananas for free.  Ok, so really I don’t know how to get cheap bananas other than by climbing ladders and jumping barrels, Donkey Kong.  However, you can also save money by making Gatorade in large coolers with the mix.  You can even make money on your refreshments by serving and charging for a recession proof product:  alcohol!  Everyone will remember your race as a good time for sure!  Well, hopefully they’ll remember.

It’s time to streamline.  Become more efficient.  Create value.  Trim the fat and run a cheap 5k.  You’ve got this runner’s support.

18th Annual Running the Blues 5K Run & 2.5K Walk

Friday, March 27th, 2009

running-the-blues-5k1It’s time again for the 18th Annual Running the Blues 5K Run & 2.5K Walk in Jacksonville Beach, Florida.  The event is being held on April 4th at 9:00 am this year and coincides with the Springing the Blues festival weekend, as per usual.  This isn’t your normal 5k race mainly because the whole course is on the nice, flat (as opposed to a hilly) beach.  I recommend running barefoot.  Even though the tide will be down, there is no promise that you won’t be running into the wind so watch where you are spitting.  If you aren’t extreme enough to run the 5k on the soft sand then you can still enjoy the beauty of the beach and participate in the 2.5K walk on the beach.  I did some research on Match.com and found that “walks on the beach” was an activity that 96% of singles enjoy.  So if you’re not a runner, at least consider impressing the opposite sex by walking on the beach.  You’re so sensitive and I dig that about you.  You need to register for this race TODAY by sending a mail in entry postmarked by the 28th or registering online before April 1st for the price of 17 dollars.  Everyone knows that’s a steal for a cool 5k like this.  The T-shirt alone probably costs that much.  Also there is race day registration available but then the price goes up to 20 dollars.  It’s a bad economy, go ahead and register now and use that 3 dollars to get yourself a McDonald’s Value Meal after the race.  You earned it, you just ran 3.1 miles!  Or walked 2.5K, still something to eat a Big Mac about.

The event is hosted by Performance MutliSports Event Planning and Production which is a really cool organization.  Performance MultiSports organizes a variety of races and promotes healthy recreational opportunities in NE Florida. Performance provides athletes of many sports a way to meet, train, and socialize together, while giving back to the community, as it produces sports events for a variety of other non-profit organizations.  They put on all kind of races like adventure, running, bicycling, triathlon, duathlon, kayak, and multisport events all over Florida.  We all know that running is the best sport you can participate in, but it’s great to get out and challenge yourself with some new activities and races.  You have to keep challenging yourself if you want to truly be extreme.  I’m thinking about doing a kayak race.  How cool would that be?  Pretty cool.  You can check out their event calendar to see all the different events you can participate in.  There’s also a plethora of links available on their website if you want to learn more about these different activities. However, don’t click on the Running link, it may give your computer the flu or some other sickness.  They have bicycling resources available too but not necessarily mountain biking, but you already know where to go for that. You’re so renaissance and I like how your resume reflects that.  You’re hired!…to run the 18th Annual Running the Blues 5k Run & 2.5K Walk.

You don’t live in Florida?  I don’t care, this 5k is a destination race for sure because it goes along with the Springing the Blues festival which is a free, three-day, ocean front concert.  Run a 5k on the ocean in the morning, then chill out with a free oceanfront Blues festival the rest of the day.  Sounds like the perfect vacation for this economy!  Some of the performers include Regi Blue, Cedric Burnside and Lightnin Malcolm, Chubby Carrier and the Bayou Swamp Band and many more.  I honestly don’t know much about the Blues but Downbeat magazine rated this festival as one of the top 50 Music Festivals and Southeast Tourism Society named it one of the top 20 destination events.  See, it’s official, the Running the Blues 5k Run & 2.5K Walk is a destination event.  Make it you’re cheap vacation destination!  Where else would you go in Florida anyways?

No where other than Jacksonville Beach.  Go ahead and take your shoes off and relax…after running 3.1 miles of course…with our without shoes.  Don’t you want to earn all the beer you’ll consume watching blues all day afterward?  Beer that you earn tastes almost as good as free beer!  Almost.

NYC Marathon Race Entry Fees Increase: Running is Recession Proof

Saturday, February 21st, 2009

recission-running_boston-marathonSo I read in a New York Times Article this morning that the NYC Marathon is raising its registration fees about 17 dollars per entry.  That’s about a 10% increase.  The New York City marathon is a non-profit organization who says they are just trying to break even this year with the entry fee increases.  I guess the entry fees received from participants who apply, but do not get awarded a race number in the lottery system, doesn’t generate enough revenue to cover the cost of them NOT being able to run the race.  The Disney marathon in Orlando also increased their entry fees by 20 dollars this year.  If it’s a poor economy, wouldn’t they decrease race entry fees to entice more price conscious runners to participate?

Nope.  So far this year, marathon and half-marathon races are seeing record race entrants in places like Miami, Houston, and Phoenix, but race promoters are gaining less revenue. One problem is that race entries do not cover the cost of putting on a race; a large portion of the revenue comes from corporate sponsors.   For instance, the NYC Marathon’s race sponsor through 2010 is the embattled Dutch financial services company ING (who sponsor a number of other large races).  Poor preforming or bankrupt corporate sponsors don’t seem to bring in very solid revenue to race promoters.  Weird.

But race promoters are also saying their expensives have gone up.  I had a phrase when I had just returned home from Iraq and was trying to finish separating from the Army, while also applying to grade schools and find a job.  When people would ask me to hang out or do something for them I would say to myself, “Everyone just wants a piece of me.”  I have found in these poor economic times everyone seems to want a piece of us, the consumers.  Gas prices are rising because OPEC isn’t getting enough revenue from our decreased consumption.  Universities are increasing tuition because they aren’t getting the alumni donations they were used to.  Sports players still demand lucrative contracts so  sports ticket prices have had to increase to cover the loss of the amount of fans at games.  When times get tough, everyone wants a piece.  Possibly vendors and service providers now want a piece of marathon promoters.  Why are they going after marathon’s?  Because the amount of race entrants seems to be recession proof.

Why are marathons recession proof?  Well first off, the only cost to a participant is running shoes and an entry fee.  Possibly more people are goal driven in poor economic times.  I imagine a lot of people have more time to train now that they do not have jobs or are working less because the economy is slow.  What a perfect time to attain that goal you’ve always wanted to do.  Marathon runners usually have high annual household income so they aren’t as price sensitive.  I may look further into whether or not marathons are recession proof.  The allure of accomplishing difficult goals will always be demanded.  Plus, it impresses people at job interviews when you put on your resume “marathon running” under interests.  However, in one interview I had the interviewer begin to talk about his extensive marathon running and training.  But when my PR was a good bit faster than his was he kind of got “over” the interview.  I guess it’s like the Army, you always want to be able to out run those you are in charge of.

Let’s pull this country out of its economic slump one marathon mile at a time!  Yes, we ran!

Recession Proof Running

Thursday, January 15th, 2009

Yesterday I was sent two separate articles from friends about running in a poor economy and began to think about how running is affected by it. This is something that I have thought about many times before not only because I am a runner, but also because I am an economist who enjoys getting value out of every dollar. Some of the reasons I enjoy running so much are that it costs nearly nothing and you can do it where ever, whenever. I have never understood people who spend sixty dollars a month for gym memberships when the streets and trails or free. Maybe it’s a social experience for them.  Maybe they do a lot of weight training; I do push-ups and sometimes I even find a bar so I pull myself up above it, over and over again.  It’s pretty hot.  No matter how we exercise though, we can all agree that even in a poor economy it is very important to stay healthy and look your best.  At your job interview you want to look like you have the endurance to work those long hours don’t you?  I thought so.  One often overlooked reason it is important to stay healthy in a bad economy is that exercising is preventive medicine; keeping you from paying high health care costs later. A study found that those who worked out twice a week for 2 years saved 1,252 dollars in health care cost over those who exercised only once a week. Likewise, people who are overweight by thirty pounds typically spend between 5,000-21,000 dollars more on health care than people of average weight.  Not only do they have to spend more money for food, but also on health care costs!  Unbelievable.

Running is also a relatively inexpensive sport. I run almost everyday and it barely costs me a dime. However, there are two aspects of running that can become expensive:  running shoes and participating in races. Running shoes guard against injury and thus may save you money in the long-run (no pun intended). Remember, I value every dollar, and spending a bit extra for a good pair of running shoes is well worth it to me. However, before you spend a premium price for running shoes you want to make sure they are the right pair for you.  On this site at there are detailed descriptions along with runner’s reviews of running shoes to help you make the right decision for you.  You’re welcome.

The other major cost to runners is participating in events.  This cost is a personal judgment call depending on how much money you need to save and how valuable running certain events is to you.  In times like these I continue to participate in the events that I have a tradition of participating in but typically do not try new events or run in the random 10k just because I live near it.  You can decide which races are worth the price based on other runner’s reviews.

You can stop Running out of money and Recession Proof yourself!  Now who’s up for some McDonald’s dollar menu?