July, 2008

Last night my wife and I went to the Three Doors Down concert at the local outdoor amphitheater. The venue has some under-roof seating, but the vast majority of the seating is on the lawn, a huge grass-covered hill where you can just pick out a place, flip out a blanket, and sit.

You can also rent lawn chairs. After about 15 minutes of sitting on a blanket, my back was hurting and I was ready for a chair. So we walked all the way back down the hill (about 10 mins) and scoped out the rental place.

I noticed the sign right away – Lawn Chair Rental $5. Excellent. Five bucks. I can handle that.

So we go up there and hand over the $5 bucks. I get a chair and a ticket. The lady explains to me that if I bring the chair back, along with the ticket, I’ll get a dollar back.

Wow, really? I can walk all this way back for a dollar?

If you’ve read the book Freakonomics, you’ll remember a story about daycares in Israel that were having problems with parents picking up their children late. So the daycare decided to issue a ‘late penalty fee’ of $3.00. And what happened? The amount of late arrivals increased dramatically. The parents realized that for only $3/day, they could extend the time they had without the kids to get things done. The daycare’s plan backfired.

Same for the lawn chair. I had walked up there fully expecting to pay $5 for a rental. Once there, they informed me of the deposit return, but instead I heard “For no extra money, you can leave your chair on the hill after the show”. They just saved me from walking all the way back over there, thanks.

So in my little marketing mind, I started thinking about things they could do that could actually work. We know the chair rental really costs them nothing, other than the initial purchase price of the chair, which I’m sure they recouped in the first two shows of the season. That means the other 100 or so shows are pure profit, minus having to pay the girls that man the rental booth. So let’s just say the profit per chair per concert is $4.50.

There are many businesses who would love to get the exposure of thousands of people nearly every night of the summer. These businesses would be wise to contact the lawn chair rental place and work out a deal. For example’s sake, lets say I own a sandwich shop near the ampitheater. I could print up some buy-one-get-one sandwich coupons, and give them to the lawn chair rental booth (up to $5 value). Now the booth can promote something of more value for each returned chair, a free $5 sandwich, making the rental “free”.

They’d do even better if they got a few vendors to offer deals. A local nightclub/bar would do well after most concerts. A free bucket with purchase of a bucket would pull people in. A skate shop (for the teen visitors) could offer a $5 discount off shoes. Dave & Busters (which is very near the amphitheater) could offer $5 in free tokens.

Even if the lawn chair company paid $1 for each coupon, they’d still come out was ahead.

Be careful how you portray ‘value’ to your customers. I was fully willing to pay $5 to rent a chair, and when I found out that I could just leave it, and didn’t have to bring it back, it was even better. I was in no way notified of the $1 ‘refund’ until I had already paid for the rental.

A ten minute walk with an already-hurting back vs. a $1 refund was an easy decision. Someone come get this chair. I’m going home.