Tiered pricing has been growing in popularity for all types of summer camps. Pioneered by YMCA camps, the flexible-fee approach has spread to religious camps, recreation department camps, and scout camps. This has been developing for several years, as evidenced by the 2009 NYTimes.com blog post, Pick Your Own Price for Summer Camp. The Times article hints at the moral and philanthropic reasons why this kind of system might be desirable–caring for families with fewer financial resources and giving others an opportunity for generosity. Pecometh offered tiered pricing for the first time in 2013 and had a VERY positive response. We kept our lowest price the same as 2012, added $50 for Tier 2, and added $100 for Tier 1. We excluded certain programs, including our camp for adults with disabilities and day camps. Out of 868 campers who had a choice of tiers, we had the following results:
Tier 1: 261 (30%)
Tier 2: 157 (18%)
Tier 3: 450 (52%)
The fact that nearly half of the campers chose to pay a higher price is significant. This resulted in $33,950 more in income than if we had we simply charged the 2012 fees. In essence, tiered pricing amounts to a voluntary price increase funded by those who feel able to contribute a little more.
Tiered pricing gives families the freedom to choose a camp fee that fits their financial situation. The summer camp experience is the same for every camper, regardless of which price tier is chosen. Most camps that implement this model use a three-tier system. While explanations vary, the tiers recognize that some families are able to pay the full cost of camp while others have the freedom to choose a subsidized cost without having to fill out forms. The typical explanation goes something like:
Tier 1 (highest price) the full cost of camp
Tier 2 (middle price) partially subsidized fee
Tier 3 (lowest price) fully subsidized fee
It’s important to note that we feel a major factor in the results Pecometh experienced was that Tier 1 was the default option. Tiers 2 and 3 were available via the drop-down box. Our registrar did have to spend some more time on the phone explaining tiered pricing to some people, but we literally did not receive one complaint. The closest we got was a woman who asked, “Why should I pay the higher price?” That’s a good question. Here’s an answer:
Some camps call this an honor system that recognizes that the cost of camp has traditionally been subsidized by an agency or parent institution. The majority of camps, including Pecometh, are now receiving significantly less in the form of subsidies. Rather than raise prices on all families, tiered pricing essentially asks families with greater financial means to subsidize those who can’t pay the full cost of camp. In almost all cases, camps offer additional scholarships for campers who need greater financial assistance.
The restaurant chain Panera Bread has implemented a similar system with a new cafe concept. Their version of “pick your own price” is called Pay What You Can. The nonprofit Panera Bread Foundation recently opened its fifth Panera Cares ® Cafe in Boston, MA, adding to locations in St. Louis, MO; Dearborn, MI; Portland,OR; and Chicago, IL. The Panera Cares Cafes don’t list any prices and they don’t have cash registers. Instead they have suggested donation levels and donation bins. The menu is consistent with for-profit Panera Bread Cafes. The big difference is that each customer picks what they can pay. Panera calls this a shared responsibility model. Those who can afford to pay more are helping those who can’t pay much, if anything at all. The business model is clearly working, since they continue to open new cafes.
In the same way, tiered pricing is working for summer camps. It’s helping us respond to changing economic conditions while giving families the chance to pick the option that works for them. Of all the camps that I’ve heard from or heard about, the overwhelming sentiment is that their camp families appreciate having the choice. One camp even switched their pricing from fixed pricing to tiered pricing in the middle of the camp registration season, with no complaints. This business model is realizing positive values and a positive bottom line, both for camps and for camper families.
Jack Shitama is Director for Camp & Retreat Ministries for the Peninsula-Delaware Conference and Chair of the National Camp & Retreat Committee, the UMCRM Board of Directors. He is an ordained elder in the UMC and past president of the International Association of Conference Center Administrators (IACCA). Jack lives and serves at Pecometh Camp & Retreat Center (MD).