This past September, I finally got to check off one of my big goals – complete a full ironman (2.4 mile swim, 112 mile bike and 26.2 mile run). Since it was my first race, I did the closest race possible, which in my case was the ChesapeakeMan in Cambridge, Maryland (a great race by the way). Technically, though, the ChesapeakeMan is not an “Ironman” event (even though it’s the same distance), but an “Ultra Distance” race. The difference is in the Ironman brand, a registered trademark, which got me thinking of brand value.
To start, let’s just look at pricing. The registration for the ChesapeakeMan is $375 dollars, which includes a one day $10 USA Triathlon insurance pass. The price to do an Ironman sanctioned event ranges from $575 to $625 and can go up to $700 for some races. Given that many of the Ironman 2012 races are already sold out, we can assume that the price point seems to reflect what the market will bear. Right away we can see that people are willing to pay a premium for the Ironman brand. How much? Given our two primary pricing levels between 53% to 66% more.
Another way to look at this is though an analysis called cojoint analysis. This method, in its most basic form, measures consumer behavior by comparing two products and then asks users how much of a premium they would pay for one over the other (it can also measure price influencing variables in a single product, but that's another post). In our example, this means that even though both products (ChesapeakeMan and Ironman) started out at say $375, the Ironman price could be continually raised until it hit $575 - $625 before people would begin questioning whether they were receiving enough perceived value for the price.
How does this translate overall? In 1980, Valerie Silk, who at the time was running a chain of health clubs, was asked to help oversee the management of a Hawaii Ironman race being put on by John Collins as U.S. Navy Commander. After managing or directing a number or races, Valerie Silk, who had by then become an owner of the Hawaii Triathlon Corporation, sold the rights to the Ironman brand to Dr. James P. Gills (a buy that redefines "busy") for $3 million in 1989. Jump forward to 2008. Rhode Island-based Providence Equity Partners, which manages about $21 billion in investments, purchases World Triathlon Corp. (established by Dr. Gills), which by then stages or licenses rights to 53 Ironman and half-Ironman distances annually, for an undisclosed sum. Estimates put the price between $50 – 80 million.
While there are a lot of takeaways here, I think one of the main ones is simply an understanding that great brands are built around a strong set of core values and an unwavering commitment to constantly delivering the best experience possible. It will certainly be interesting to see where Ironman goes from here.