Join Bridge Winners
We've Got It Backwards - Costs are Turned on Their Heads
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Financial responsibility has many facets.  Marketing strategy is straight-forward. 

Revenue Excess*=(p-c)*q - I - O + D 

where p is price, c is variable cost, and q is quantity, I is cost of inventory, O is cost of Overheads and D is Debt (Yes, debt adds to cash. The debt servicing adds to overhead cost).  We ignore working capital, taxes and depreciation for relevance and simplicity.   Overhead includes HQ and IT equipment, central operations staff.  Arguably field operations staff are variable cost to the event. Let's ignore income from teaching training and other efforts not central to game activity.   

The mission to grow bridge and to maximize member satisfaction is unmet.  Bridge tournament attendance is in decline, and membership is waning.  Demographic limitations loom.  Growth requires cash (investment). Where will growth and the funds to support it come from? Stopping membership decline is important but does not put more tables or sessions on the ledger.   

So what.

Well, understanding how much disposable income our membership has, and creating high value offerings that cause them to part with more of that income is the way to maximize growth.  We also need to understand the demand elasticity for bridge experiences.  While the ACBL is the only sanctioned game in town, it is not the only game.  Substitutes abound and are drawing minds away from our game.  But I digress.

I would like to focus your attention on an ad hoc comparison of "Total Cost" for playing various sanctioned bridge events under the ACBL umbrella.  I find the comparison illuminating and alarming at the same time.  

(*Since the ACBL is a nonprofit membership organization it is proper to talk about excess of revenue over cost, and not profit).

The following pro forma is simplistic but makes key points.  Take the number of sessions for an event and multiply it by the entry fee. Add in costs accrued for food, housing, transportation, and the ubiquitous miscellaneous (Uber anyone?) and we get an interesting picture:

Pro Forma Bridge CostsOf course, your session costs and other costs will differ.  Of course few ever play all possible sessions.

Of course few really pay $4K-5K to go to a NABC tournament, right?

Look More Closely.

The total cost takes the number of sessions times the entry fee an adds in the remaining costs.  

My own plane ticket to Hawaii was $1200 round trip so I understated that component.  However for me $600 is a high side average for air travel.

Lodging?  I can normally get by with 7 nights at $50 per night sharing a room at regionals in the Midwest.  Sometimes less with AirBnB success.  

For Hawaii I was able to find $100/night accommodations one block from the venue.

However those staying at the venue spent upwards of $240 per night for 11 nights minimum.  

Yes - the total cost by event type skyrockets.  This is a clear barrier to playing more days at a tournament or more tournaments in a year.

However there is an even more telling statistic.  Look at the portion of the total cost that is spent on bridge itself.  By the time we get to NABC events we are spending 5 times more on non bridge needs than on bridge itself.  This inversion of the total cost makes improving revenue extremely difficult.  Think of the part of the cost players spend that's not directly on bridge and you get the idea behind "lost revenue". 

Said differently, for the flagship event in the bridge calendar, the enterprise controls very little of the total cost for the consumer.  That leaves the enterprise with very few marketing strategy degrees of freedom.

I hope you can see that there is so much more leverage in lowering incidental expenses for the majority of attendees.

Why? 

Pro Forma Bridge CostsIf you can structure the cost of housing and food so that players spend half (?) what they do today, there are two things you can do as a business:

1) Attract more players because the total cost of participation is dropped substantially, or

2) Raise bridge fees because the players are accustomed to a certain total cost, improving excess revenues over expenses.

Given the decline in attendance that affect tournaments, finding venues like Gatlinburg and Reno that are affordable, walkable, fun and high value for the player will help sustain or grow participation.

Likewise placing NABC tournaments closer to where members live and the majority of the tables are being played makes sound business sense - you automatically improve the value equation for those players.  

I fear that without some adjustment in the associated costs of attendance, raising the entry fee will drive more people away. or shorten their participation.

Neither of these consequences are aligned with our mission, are they.  

I have not participated in the Online NABC events so I do not have entry cost data for that new opportunity.  Given such evens are theoretically infinitely scaleable,  they represent pure profit for ACBL and BBO.  I do not advocate moving all Bridge on-line.  Let's please avoid that argument. 

We do need to tend to the total cost of participation and redirect efforts to create better value for the majority of participating players. High cost luxury venues might appeal to a certain subset of our membership, but they are not conducive to good marketing strategy. Nor do they appear to maximize the growth of bridge.  

What I cannot know, but would like to understand, is - were we to run all NABC tournaments professionally (no volunteer support) what venues would become possible on a permanent or regular bases, and what would the costs be?  Imagine the possibilities.  

We simply have to get the TOTAL COST OF PLAYING BRIDGE right.  There is no other way.  

Thank you for considering this thought experiment.

What do you think? What should we do?

  

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