Extra OCR Fees: Revenue Stream or Freedom of Choice?

Anyone who has signed up for an obstacle course race lately will have shared the same experience: not climbing cargo nets or crawling under barbed wire, but rather watching extra OCR fees getting tacked on to what you have to pay, from the time you register to the moment you get to the race venue. It’s aggravating, and not in a “having to carry a bucket of gravel up and down a steep hill” kind of way. Why do virtually all of the races do this, as much as it annoys their customers? Are the organizers being greedy, or is there something else going on?

The process is reminiscent of what happens when you shop for an airplane ticket. You see a base price, and then you have to pay extra to check a suitcase, and you might also wish to buy extra leg room if you happen to be over six feet tall. On the plane, you might need to pony up for snacks or drinks or wifi. Similarly, when you sign up for an obstacle course race, you will have a base price for the race, but then you will get hit with mandatory extra fees for insurance or for the online registration, and other fees for parking, bag check and even for spectators who want to watch you cross the finish line.Tough Mudder - Bag Drop

My previous experience was in road racing and triathlons. The nature of triathlons means you have to bring equipment with you to a transition area, and even for regular road races, I had never been asked to pay to check a bag. Sometimes I might be required to use a clear plastic bag to satisfy the paranoia of local law enforcement, but no fee was involved. The first time I was asked to pay to check a bag at a Spartan Race, I was taken aback, but sheepishly handed over the money. What choice did I have? The typical OCR will have instructions to bring a bag of clean, dry clothes for after the race. I certainly wasn’t going to take my wallet and phone with me on the course, so I felt like I was being fleeced, if only for a small sum.

I canvassed some of my fellow racers, and I found I was not alone in being annoyed by the extra fees. The phrase “nickeled and dimed” came up frequently, as did one particularly annoying specific example. Spartan Races offer a season pass, allowing you to race as many times as you like for certain events. The catch? You have to pay a separate “insurance” fee for every race you start. Given that the season pass costs a hefty amount, people who bought the pass thought this was a particularly petty way to extract even more cash from them. The overall opinion was “why don’t race directors just roll these fees into the underlying race fee? I’d rather pay $100 than $60 for the race and $10 for registration and $10 for insurance and $10 for parking and $10 to check my bag.”

Another pet peeve was charging for spectators. This seemed like a way to drive away customers. If I’m running a marathon, no one charges my family to see me along the course. Also, today’s spectator can easily be tomorrow’s racer. Why deter them from seeing how much fun we’re having?

Since so many races charge these extra fees, I reached out to several operators to get their side of the story. At least one race did not feel the need to defend the practice. The sum of the response from Spartan Race? “We don’t have a comment on this specifically, but we do everything we can to provide the best race experience in the world.” While this response is marginally more polite than what I have experienced in the past from Spartan, it does reflect an attitude that I associate with their organization.

Other races provided a much more customer-friendly approach. Rugged Maniac uses the fact that they don’t tack on all their extra fees as part of their marketing, and they find that it works. Rugged Races COO Rob Dickens told me: “I do believe that our customers notice that we don’t tack on extra fees, especially those people who have done other obstacle races.  We have a very high customer retention rate and I believe it’s due mainly to the way we treat our customers, including the “no fees” policy.” He continued:

“You’re right that we don’t tack on any extra fees.  We did when we first started out because everybody else was doing it (Warrior Dash, Spartan Race, and Tough Mudder) as a way to simply get more money out of their customers and we couldn’t really afford NOT to do it and remain financially competitive with those bigger runs.

But we stopped doing it the minute we could afford to, which was back in 2012.  Why? Because price-gouging your customers shows a complete lack of respect for them and violates the golden rule (do unto others…).  I don’t like to have a bunch of fees tacked on to something I’m buying, so why would I do it to my customers?

After all, none of the “processing” or “insurance” fees charged by the other guys are legitimate.  We all have nearly identical insurance policies, and none of those policies require us to charge our customers an insurance fee.  Likewise, we’re all using similar registration platforms, and none of those platforms charge more than a $2 fee per registrant, so why are the other guys charging 8%-12% processing fees?  

Everyone’s insurance policies are based on the number of expected attendees in a calendar year, so if Spartan is charging an extra “insurance” fee when someone run the same course twice, it’s simply another way for them to squeeze more money out their customers.  Their insurance company doesn’t require it, and they don’t have to pay higher premiums for someone running twice.  As I said before, their insurance companies don’t require any “insurance” fee.  It’s completely bogus.

So in short, the “business” side of the fee argument is just that the business wants as much money from you as possible.  That’s it.  Now some may say we’re stupid for leaving all that money on the table and still charging much less than the other guys, but I truly believe that if we treat our customers with respect, they’ll continue to come back to Rugged Maniac year after year, and that has proven to be the case thus far.”

I also asked Ben Johnson, Communications Director from Tough Mudder about how they go about deciding what fees to add. His answers were enlightening. For starters, why tack on that insurance fee instead of rolling it into the race fee, since participants have no choice but to pay the fee?

“The insurance is broken out, above all, to draw attention to the fact you will receive it. Our insurance policy provides accidental medical benefits up to $100,000 per person for medical bills arising from a covered accident incurred while participating in a Tough Mudder event. This knowledge can provide peace of mind to participants while registering, and we’ve found that the best way to ensure everyone is aware is to break it out in the pricing.”

As for the “optional” fees, such as parking and bag drop, he admitted that the comparison to the airlines was fair and apt. Participants can save a little money by carpooling and combining bags, in the same way fliers can save cash by skipping the in-flight movie. However, TMHQ has another reason for imposing these fees, namely to reduce the numbers of cars and bags, which lead to a better experience:

“Charging for items like parking and bag drop encourages behaviors that help the event run more smoothly, which means a more enjoyable event for everyone. The more people carpool, the less traffic there will be into and out of the event (as you’re likely aware, many events are held in remote locations with limited access — and no one likes traffic jams). The fewer bags at bag drop, the quicker we can find your items, and the fewer staff needed to find your gear and run the check in process smoothly.”

He also explained that part of the reason to charge for spectators comes from the fact that hosting the spectators on the course adds significant costs. A Tough Mudder can attract as many as 5,000 spectators on the course, and with those extra people come extra expenses, everything from staff to support the visitors to additional portable toilets. With numbers as high as that, it is easy to understand that allowing spectators on the course can cost a lot of money. In return, Tough Mudder tries to make coming as a spectator worth the price of admission, not just by providing plenty of YouTube-worthy moments for the fans, but also by making the festival area an attraction in itself.

One of my fears is that, as with the airlines, people complain about the fees, but they don’t alter their consumption patterns based on those complaints (i.e., people are flying in record numbers even though they’re getting charged some new fee every time they turn around). I asked Ben Johnson if using fees had worked to change the behavior of the participants. Given Tough Mudder’s origin story as a Harvard MBA project, I should not have been surprised when he told me that, indeed, they had crunched the numbers.

We do significant amounts of A/B testing. From parking (pushing carpool benefits) to testing where we place obstacles on course to ensure we reduce lines and maximize the experience, we are data driven. We have seen tangible benefits of enabling participants to ‘control’ some of their costs by being transparent in pricing and price increases and urging behaviors which have a positive impact on the experience (such as carpooling).”

Two different approaches, tacking on the fees and not tacking on fees, are both yielding good results for these event operators. As with the airlines, people are clearly going to pay the fees. The question remains as to how sustainable each model will be in an industry that already has plenty of question marks as to how sustainable OCR will be in the long run.Tough Mudder - Phone Charging Lockers

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Christopher Stephens

Christopher is an attorney, a middle-of-the-pack triathlete, a marathoner, an open water swimmer, and a recovering Jeopardy contestant. A native New Yorker, he trains in the rugged wilderness of Central Park and can sometimes be found swimming in the Hudson. He also bakes pies. Delicious pies.
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  1. I am perfectly fine with feels for optional services. People not checking a bag or parking shouldn’t subsidize those who do. I didn’t love insurance fees, but I do like Tough Mudder’s justification (legitimate or not) that it brings attention to the presence of insurance. I’ll let that one slide.
    What I CANNOT STAND are mandatory fees. “Processing fees”, “Convenience fees” and “registration charges” are baloney. Are you saying I could save that $4.50 if I brought cash to Vermont and handed it over to Joe DeSena directly? No? Well if there’s no way to avoid it, then its bogus. That should be rolled into the admission price, period.

  2. All these other fees is one more reason I’m going to stop doing Spartans and concentrate on the smaller races that put the athlete first. Rugged Maniac and Conquer the Gauntlet are two of the races I’ll be supporting. I’d like to see some transparency from these races that charge all the fees. How much revenue comes in from the different sources and how much is going out.

  3. Great article. The comments from the COO of Rugged Maniac were interesting. He’s not worried about throwing the other companies under the bus.

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