Growing up just north of Fort Wayne, Indiana, there were two roller rinks that would compete for our business: the Roller Dome North in Fort Wayne, IN and Bell’s in New Haven, Indiana. We would frequent these two businesses for birthday parties, school functions, and other organizational outings.
As a kid, I really couldn’t see a difference between the two businesses - we went there to skate and have fun.
And honestly, I can’t remember the last time I had been to either one of these places. It’s just not something I have done since I was young and I really had no reason to visit either place until this year.
My kids got invited to a roller skating birthday party a few weeks ago. That led to a birthday party of their own at the roller rink, which led to them getting their own skates as a birthday present.
So now, roller skating has quickly become a very real part of my vocabulary: I use it for bribes - if you do this, then we can… - and I use it for punishment - if you don’t obey, you won’t be able to...
And my kids are totally hooked. Since there are not many high-energy activities for our kids to do during the winter months in Indiana, roller skating has become a great option for us.
2 Roller Rinks with 2 Different Models
Now, you wouldn’t think that a roller rink could be that much different from a local competitor, but the Roller Dome North and Bell’s couldn’t be more different in how they operate.
Sure, both rinks are older buildings, but they each operate in entirely different ways.
They have entirely different business models
Defining a Business Model
Every business has a business model.
Whether the model was intentionally designed or was a default of the industry, competition, or prior owners, every business operates under a business model.
And a business model is what can set a business apart from the competition.
But how do two businesses that look to be the same on the outside operate with two completely different business models?
The Budget Model
From my recent trip to Bell’s, it seems that they are operating on a “budget” model meaning that their prices are low and they cater to the customer who is looking for a value and low price. As the competition in the area charges higher prices, this model seems to have served well for Bell’s.
The Benefits to the Budget Model
The reason we went this past week was because of their prices - it cost me only $15 for a family of 5 to skate all Sunday afternoon. This was less than half of the price the Roller Dome North was charging ($7 per person included skates, skating, and a pizza buffet).
Bell’s also allows their customers to bring in food from the outside rather than require all food to be purchased from the snack bar. We saw cakes, bags of chips, sandwiches, and even a crockpot. This model of allowing outside food helps to cater to those customers looking to skate on a budget. If a family can bring their own food, they don’t have to pay for concessions.
Even their lockers to place our belongings were tailored for those on a budget - when I tried paying $.50 to get a key out of the locker to lock my belongings, I was advised that the lockers don’t work and was given a refund.
The Shortcomings of the Budget Model
While I love the low price offered by Bell’s, there were some fairly obvious shortcomings.
First, Bell’s doesn't have a website and doesn’t offer wifi for guests like its competitor does. For me, I am one to bring my computer with me any time my kids are at an event. Without wifi, I really can’t accomplish what I want to - so yes, wifi is important to me.
And as far as updates, Bell’s was clean, but it didn’t seem like there have been many updates in the last twenty years. For example, the bathrooms were exactly the same as I remembered them as a kid - concrete walls and a sink without a mirror.
An additional shortcoming of the budget business model was that it allowed for a more chaotic environment. Just as food was allowed from the outside, the establishment was fairly lax on most rules - including those for the skaters.
With a laid back approach to business, we noticed that the place had been trashed by many of the families there celebrating birthdays. Cake, sandwiches, and two liters had been spilled and were being skated over.
On the skating rink, there really didn’t seem to be many enforced rules, which led to concerns of injury. For example, we saw a small child going the wrong way run into a teenager who was speed skating - weaving in and out of all the other skaters - which resulted on one of the kids hitting his head hard on the skating rink.
Even the employees who were supposed to be monitoring the activities of the skaters were often hanging out with their friends and were even guilty of speed skating while weaving in and out of the other skaters.
Budget Model Summary
In summary, it appears that Bell’s has implemented a business model where they offer skating that caters to those on a budget. As long as you don’t mind the slight chaos that results from this model, you can enjoy your time skating at a fraction of the cost of the competition.
The Rules Model
The Roller Dome North appears to operate on what I call a “rules” business model. From the moment you walk in to the gated entry way, you notice the rules. The main entry door is locked and can only be opened by the ticket attendant who is safely secured behind a glass window. The bottom line is that the Roller Dome North is a tightly run ship and this model seems to have served them well.
The Benefits to the Rules Model
The biggest benefit of the rules model is that it provides for a safe and consistent environment for customers to enjoy their skating. While the rules may seem more strict than the competition, they help to provide consistency and a safe environment.
For example, the Roller Dome North appears to have a strong priority of the safety of their guests. And the rules help to create this environment. They help ensure that only paying customers enter the roller rink. They also help to ensure that skaters are protected from reckless teenagers and children going the wrong way.
Furthermore, the rules benefit the business as they help to drive up revenue. As the Roller Dome North doesn’t allow customers to bring in food or drinks on their own, all hunger needs are fulfilled from the concession stand. As people get hungry, this demand can only be filled within the roller rink, resulting in increased sales for the business.
Also, any customer wanting to hold a birthday party at the Roller Dome North must purchase a specific birthday package, otherwise they will have a difficult time finding a table and are even not permitted to bring in cake.
The Shortcomings of the Rules Model
While the rules model helps to provide a safe and consistent environment for skaters, there are also a few repercussions that result from all of the rules.
For example, a birthday party at the Roller Dome North will cost a parent much more than what they would need to pay at Bell’s.
In addition, the costs of the tight ship they run increases overall costs to skate at the roller rink.
Rules Model Summary
In summary, the Roller Dome North may have rules that seem to be a bit overbearing at times, but this approach allows for a safe and consistent environment for the customers while helping to increase revenues for the business.
As you can see, businesses that seem to be very similar upon first glance can actually have different enough business models that give them a unique competitive advantage in the market place.