The Bench With the View: A Business Lesson for Parks and Recreation

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by Posted on August 9, 2013

Written by: Jeff Price, MBA, Business Manager, Everett Parks & Recreation Department, WA

 

I must admit I was a bit nervous. Despite having met with many customers over the years to happily describe or extol the virtues of parks programs and services, I’ve never found myself in a situation quite like this nearly two years ago.

 

Let me explain.

 

Gayle, a local resident, indicated that she was interested in honoring a deceased loved one by purchasing a memorial bench from us and having us install it in one of our parks. Many of you are familiar with these types of programs. The donor purchases a bench to honor a loved one and the community gets a great amenity at no cost to the agency. We’ve sold many of these over the years. It’s a classic win/win for everyone involved.

 

However, my meeting with Gayle nearly 2 years ago at American Legion Park marked the start of something different for us. I had a unique option to present to her that day.  She could purchase and have a bench installed overlooking beautiful Port Gardner Bay or purchase a bench and have us install it across the street near the playground of the same park.  

 

The big difference?  The bench overlooking the bay would cost her $1,000 more than the one near the playground.  We “differentiated” the price due to one major factor: the view.  It was the same style of bench mind you, but the differentiation provided us the opportunity to charge a higher rate.


A-Bench-With-A-View-Webinar-Preview

What's a bench have to do with business for park and recreation agencies? Jeff Price talks business models for parks and recreation in a webinar on Aug. 22

 

Pricing differentiation is essentially charging a different price (for the same product) based upon some unique characteristic. In our case, in this instance, the view was the unique characteristic.

 

Are there other opportunities in the parks and recreation industry to engage in pricing differentiation? Absolutely! Join others who are registering for a unique webinar where we’ll not only look at this revenue opportunity, but several other (no cost) ones as well. “The Better Business Model” will provide you with some fascinating, university level researched marketing and revenue avenues to consider. You won’t want to miss it!

 

What did Gayle decide? After I explained the two options and the pricing difference she thought it over for about 10 seconds and enthusiastically said, “Oh, I’ll definitely take this location with this wonderful view!” 

 

The result was a very satisfied customer, a new park amenity for the community, and the start of a significant boost in revenue to our agency.  What opportunities are available to you? Let’s brainstorm together on August 22. See you then!

 

Editor’s Note: Join Jeff on August 22 at 2 p.m. ET for the Better Business Model webinar.  Check out additional details and register today

 

About Jeff  

Jeff-Price-Business-Blog In addition to serving as Business Manager for the City of Everett Parks and Recreation, Jeff is an adjunct professor for the University of Phoenix and has written articles for Parks & Recreation as well as WRPA Magazine.

 

 

Comments (1)


Allow me to present another view. The example you used is an interesting one for those of us in California where Proposition 26 (2010) defines (generally) the appropriate guidelines for setting and charging a fee for a service or a product such as a recreation program, classes, rental or admission. In general, a fee or charge that is not “imposed by a local government” is not covered by the 2010 tax limitation Proposition. 26. Consequently, payments that are made pursuant to a voluntary contract or other agreement, and that are not otherwise “imposed” by a government’s power to coerce as a government monopoly, are not taxes and therefore are exempt from Proposition 26 requirements, which my include voter approval. This would seem to be the argument for your scenic bench example. Since the bench agreement is a voluntary contract it would not be restricted by provisions of Proposition 26 and therefore the agency may be legally clear to charge whatever it wants. Proposition 26 is aimed at a particular class of fees imposed by state and local governments commonly referred to as “regulatory fees. There are seven classes of fees that are exempt, and most of the traditional fees provided by park and recreation departments fall under one of the exemptions. However there are some nuances to Proposition 26, which may have a chilling impact on government decision makers setting of those more traditional park and recreation fees even though they are exempted. In California the rule of thumb is that a fee is exempt and can be imposed for specific benefits, privileges, services and/or products provided to a participant, which is not provided to those not charged as long as the fee does not exceed the reasonable costs of what is provided. In addition, although not directly applicable to traditional park and recreation fees and charges, policy makers and public officials may interpret the spirit of another tax limitation measure, Proposition 218, by refraining from establishing fees and charges to cover the costs of products or services provided to some at no cost from fees imposed on others for the same product or service. Thinking about discounts (youth, low income, senior, etc.) may be similarly impacted as long as the costs of the service are not funded by higher fees charged to participants ineligible for the discount, but are instead funded from other sources, such the general fund or donations. So in the playground versus view bench example had the donor been from an urban environment and possessed a love of the joy for young children on playgrounds, would there be a rational to adjust the fee for the playground bench upward to a threshold consistent with the donor’s fiscal and emotional tolerance because of the value placed on the playground bench. Or would it perhaps be more appropriate to charge a fee which is reasonable based the actual cost of bench, installation and perhaps maintenance and not an ad valorem type fee, for which the value of the environment, or experience, may vary based upon donor inclinations and the proclivities of those setting the fee. Is it not enough to be able to add a new asset to our park inventory for others to enjoy without having to attempt to monetize each nuance and attribute? And who is going to be the arbiter and defender of such subtly? Experience, like beauty is in the engagement of the beholder and I think park and recreation professionals should be in the practice of providing the highest quality experience at the least / actual (and most reasonable) cost and not attempting to valuate each experience as a means to maximize revenue. by Scott Reese on 08/20/2013


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