2007 Series Prices

[rf360m]

I just saw on the SB website that the new Southern and Western series schedules have been posted. What I also noticed was the $200 increase in the race weekend and the $100 increase in the lapping day price. That an 8% increase for the race weekend, and more than 10% for the lapping day! I know things go up, but what goes up by that much each year. I would love to know the reason for it.

I have read some very interetsing ideas on this site about reducing costs, and wonder why none of them seem ot have made a difference.

As much as I love racing with SB, with this kind of an increase my participation won't last much longer. And I doubt that this helps to attract new customers.

-Russell

[999]

SB is still by FAR the best racing deal around.

Oh, and what else goes up by 10% per year? Gas prices, insurance, and an improved management team.

[chsutherland]

will the new cars be ready for the 07 season?

[rf360m]

Good points that those prices go up.

It would be nice it SB would say we have to raise the prices because of x,y and z, because then we could see why.

[dalyduo]

I've been told that track rent, fuel, insurance, labor and other fixed costs are only going up. While we'd prefer to see prices stay the same, the level of increase is really a partial pass along of costs that have already increased and have to be paid.

We all know how much fuel and insurance has increased recently. I doubt these price raises are passing everything along. Those of us on tight budgets may have to run fewer events... but where are you going to find better instruction, cars and racing for less money?

[cogentroad]

I assumed there had been increases in track fee’s, fuel and insurance cost. Therefore, I expected some sort of a price increase. But does this increase include the cost of deploying a new car? Or should we expect another increase shortly?

[dalyduo]

Important decisions about the new cars are still being made so it is impossible to guestimate the final cost at this moment. They are somewhat behind their goal dates for finalizing the car but important extra time is being taken to get as many good design, parts and material choices in from the start. If progress remains steady there could be a final design decision by the end of September.

On-track testing has ended and they're currently in a "repair phase". (Tearing the cars down and building them back up as will happen during maintenance and repair) Time studies have shown the replacement of basic components and suspension pieces take about half as long as the same work done on the R/T and when the final design is locked in those repair/maintenance times could be even shorter. That is truly great news in terms of crash damage and maintenance labor costs.

The just announced race series increases are only related to current costs and don't have anything to do with the purchase of a new fleet of racecars.

The goal is to have the new cars at or below the current RT cost to build but even if that goal is met, it is still unrealistic to think the new cars won't add to our race event bottom line.

It will be an enormous investment fabricating the fleet of cars and stocking all the spares needed to service every school and series event. And even if they phase them in gradually, the added costs to rebuild the fleet will have to be factored into every school and series expense. It would be foolish to think otherwise. At the same time, if the quality of our experience in the new cars goes up by a percentage greater than the cost increase we'll probably bear it willingly if grudgingly. The company is very aware of our cost concerns both for series events and crash damage. They want the new cars to revitalize the company and make the experience more satisfying for everyone. From a business standpoint they'd like the investment in the new cars paid for without killing off the customer base and the company, but no matter how you slice it... The new cars will have to be paid for and part of that cost will eventually find its way onto our Mastercards.

So the short answer is. It is not likely the new cars will be in service for regional race series use in 2007 and you won't be paying for what you aren't driving. Logic says the costs of the new cars won't come online until your Sparco's are sitting in them, so enjoy your cheap seat time in the current RT's and keep buying those lottery tickets so you and your 60 dearest and closest personal friends can sit in those new cars when they do arrive.

Originally Posted by cogentroad

I assumed there had been increases in track fee’s, fuel and insurance cost. Therefore, I expected some sort of a price increase. But does this increase include the cost of deploying a new car? Or should we expect another increase shortly?

[cdh]

Duo - whose phone do you have a tap on? or is this speculation?

.

[dalyduo]

If I told you I'd have to kill you but the batteries in the bugs are holding up nicely.

Originally Posted by cdh

Duo - whose phone do you have a tap on? or is this speculation?

.

[OLDMAN]

You're all a bunch of cheap bastards. Racing is worth the price whatever it is. Last year practice went up 15%, nobody said a word (except that guy in West Haven). So what's another small increase this year?

I know my wages typically increase 15 to 20% per year.

Quit being so cheap.


OLDMAN

[rf360m]

Originally Posted by OLDMAN

I know my wages typically increase 15 to 20% per year.


OLDMAN

Wow, 15-20% wage increase per yer - I'd love to have your job! I think you are lucky!

[dalyduo]

Bob's being just a tad ironic about his pay. He'd prefer prices be rolled back to earlier times when a gallon of gas or a pack of cigarettes could be had for 22 cents. Sadly, racing is tough on a relatively fixed income.

[GEORGE]

WOW! OLDMAN IWANT YOUR JOB NOW. IF I RECOLECT RIGHTLY
STARTING PAY NOW...$80,000..... 20%INCREASE ANNUALLY....
RETIREMENT IN 5YEARS.... FULL YEAR OF SKIPPY RACING AND LAPPING WITH MONEY LEFT OVER FOR FOOD.....
PRICELESS

[Dom Bastien]

In my view, Skip Barber is raising prices again because it believes it can increase its overall profitability.

Let’s take a quick look at the Eastern Series, 2006 versus 2005.

1. In 2006, the price of a race week-end is $3,645 vs. $3,445 in 2005, a $200 and 6% increase. For those who pre-pay the full season, the cost is $3,280.50 vs. $2,928.25 in 2005, a $352.35 or 12% increase [SBRS in 2006 reduced the discount from 15% to 10%].
2. Through 5 race week-ends in 2006, SBRS has sold 408 races versus 317 in 2005, a 29% increase;

Conclusion #1: raising prices has not hurt demand.

3. A corollary to point #2 above is that SBRS in 2006 is selling an average of 82 races per race week-end versus just 63 past year. Projecting current trends, SBRS will sell 571 races in 2006 with 6 race week-ends versis 496 races in 8 2005 week-ends.

Conclusion #2: SBRS average race week-end costs are going DOWN,

[Note: That was visible to the naked eye with the consolidation of East/Midwest events]

SBRS figured a while ago with the racing schools that raising prices would not hurt demand. In mid-2003, I paid $1,925 for my advanced two-day school; today the price is $3,195. And demand for the schools seems to be rising.

So, SBRS is trying to improve its short-term profitability and margins—not an unreasonable objective for a business!

But there are issues. In the past 3 years, SBRS has significantly changed the character of the series by appealing more to the recreational user versus the more committed user. Today “sportsmen” racers account for roughly 75% of the field versus about 30% only 3 years ago. SBRS is also putting operational pressure on itself with the big combined week-ends [Road America and Mid-Ohio]. This could have an impact on overall customer satisfaction.

With everything said above, the new SBRS Western schedule which has Millersport and Thunderbird and no southern venues as in the last two years, shows that SBRS is willing to take financial risks to appeal to its customers. And of course the new car could radically change the whole equation and bring back in the fold former customers and attract new hot shot racers.

[999]

Originally Posted by rf360m

Good points that those prices go up.

It would be nice it SB would say we have to raise the prices because of x,y and z, because then we could see why.

When you go to the supermaket, do they explain why prices go up? How about at the Gap? Is there a sign of explanation?

Honestly, I don't understand a lot of the comments about Skippy pricing.

They obviously understand supply and demand. They raise prices when necessary to cover cost or increase profits. If they drive too many customers away, they will lower prices or go out of biz.

[OLDMAN]

I think they already did that! Wasn't it around 2001?


OLDMAN

[AlDelattre]

Excellent analysis and perspective from Dom.

Also, I would have to say as a guy just in Year 2 with the Skippy system, the level of "ownership" by the customer base - as evidenced by TJR among other things- is incredibly rare and powerful in business. ALL businesses should be so lucky.

Having said that, a company CAN screw it up. For recreational activities, price/demand elasticity CAN impact things dramatically - OR, take a company like Apple Computer. Forget the iPod, their computers are actually a GREAT product with a passionate install/customer base, but they are WAY expensive - you can argue Apple vs Wintel all you want, but a 5% market share in a mature market....well, not the key to success. Also, price increases CAN help profitability AS LONG AS OPERATIONAL PERFORMANCE is there - which, for Apple, it wasn't and really still isn't.

Unless SBRS can improve the product - even with flat prices let alone increasing ones - it won't make it. This business needs to be profitable to a VERY discerning crowd (you/me/us) and needs to spin cash at a good clip since it needs to recapitalize itself every few years (eg new cars) while still managing operational costs....

[WatertownNewbie]

Originally Posted by OLDMAN

You're all a bunch of cheap bastards. Racing is worth the price whatever it is. Last year practice went up 15%, nobody said a word (except that guy in West Haven). So what's another small increase this year?

I know my wages typically increase 15 to 20% per year.

Quit being so cheap.


OLDMAN

This was the funniest posting since the Garden Club made its appearance.

[dalyduo]

Great observations from Dom & Al.

It makes no business sense to run a higher number of poorly attended race weekends when just short of 70% capacity is currently needed for the company to break even. Running 8 race weekends at 65% puts them out of business, and 6 weekends at 80 to 100% capacity keeps us racing. Well-attended race weekends are more dynamic fun for everyone except perhaps our overworked, under funded mechanics.

Combining series events (East vs. West etc.) allows the various regions to cross-pollinate and the race series to pay for itself. If there are now enough newbies and old timers to justify more stand alone regional events things are going in the right direction.

At my first race weekend 3 summers ago at LRP there were less than 10 sportsmen in my group and 4 under-populated race groups. Way below 70% capacity and that was fairly typical at the time. Some cost cutting measures had backfired rather grandly, the pro series was abandoned as a money loser, and there were many departures of employees and clients. Moral was at an all time low and some didn't think the company would survive.

Much has changed since then. Car maintenance and cosmetic appearance has vastly improved, instructors are more appreciated (if still vastly underpaid), enrollment is up and beginning with Sebring two years ago February, combined events with good attendance put some of the racing joy and financial viability back in the equation.

Rick Roso never blinked during the tough times and we've come to take for granted his standout camera and keyboard work portraying the serious learning and fun that takes place at each event for the Skippy website. (Rick's always singing the praises of everyone else and hardly ever gets a nod himself, so I figured he was overdue. :-)

Dom's mention of full sportsman groups is a good thing because they produce future crops of champ group drivers.

There are so many opposing needs being served in committing to the new car that it will be a huge achievement if they can pull it off. The car has to have the capacity to go from wingless forgiving low powered school car to edgy, high powered, high down force pro car (If they choose to revive that series) easily and cheaply with all the regional, kiddies national and master's national variations in between. They will all have data acquisition capability, and in a perfect world, be even more durable than the R/T's we now abuse beyond reason. If done right, the new car will serve those many masters and be vastly cheaper to build, maintain and repair than the current reverse engineered school and R/T cars.

The RT's and school cars are good but primitive and vintage compared with current materials, race car design and data acquisition. Like comparing a Checker Marathon to a modern day minivan taxi, they both can transport 5 passengers over long distances but there is no comparison in the quality of the experience. (And the taxi analogy is intentional given the miles per year the racecars endure)

The new car is a vital link to the future of the company and all involved seem to recognize that. Being at the leading edge of racing and race training is what gives authority to every other part of the SBRS programs. (The driving and racing schools) If you are training competitive up and coming drivers you attract and keep better students, instructors and race series participants across the board. (An overall quality of life improvement) Its that intangible connection to pure racing that gives power and cache' to every other part of the company. If you don't have cars that at least hint at current design and technology it gets harder and harder to attract quality sponsors and clients.

A new car by definition has to reset everyone's clock in some very profound ways and that makes both the company and clients as nervous as first time parents in the delivery room. I'd like to believe that a new more responsive forgiving car would also make us all better more responsive forgiving drivers who crash less! Ha!

As Michael points out, the economy and marketplace has a big say in what can be charged for that new car. Lets hope it is enough to pay off the new pieces yet low enough to let more of us enjoy the privilege of learning and practicing the craft of racing with a special group of people.

[OLDMAN]

I just got an email form SBRS stating that prices for this winter's Southern Series are $1,150 for practice and $2,495 for a race weekend. Isn't this what I just paid this past summer or am I misinformed.

I've also been told that lead follow is $1,700 plus a mandatory $400 tip for the instructor. Is this correct?


OLDMAN

[Zach Ply]

How much of a tip is expected to be given to the instructor after a lead follow day??

Zach

[dalyduo]

A tip is an expression of appreciation for exceptional service so if a fee is mandatory it is certainly not a tip.

Jim Pace charges a premium for the use of his radio equipment and real time instruction during lead-follows. I've never heard anyone report that they didn't get their money's worth with Jim. He is a highly decorated professional racer and one of the hardest working and most sought after instructors at SBRS so his position is somewhat unique.

[TomBobN20]

Lead/follow pricing has gone up. I just paid for a session. Don't remember how much but I want to say it is $1900 now. Lotta cash but it's better than paying for crash damage. Tips are still optional but a good idea as the instructor gets nothing additional for filling you with their wisdom.