SBJ/January 2-8, 2012/In Depth

Sponsors take a hard look at suite usage

With so much focus on return on investment, the idea of companies wasting luxury suites haunts CEOs and sales managers alike.

After all, prime seats and suites often count as major bargaining points when a company negotiates a sports sponsorship. With investments typically starting at $100,000 just for a suite, not to mention the much higher cost if VIP tickets come as part of an all-encompassing sponsor package, companies and teams can’t afford to come up short.

Yet that is often exactly what happens, according to industry experts. So much so that a cottage industry has emerged to help companies solve the problem.

Companies are seeking ways to better manage suite inventory so that seats are filled with the most ideal clients and prospects.
Photo by: David Durochik
As much as 40 percent of corporate seats go unused, said Mark Crepeau, vice president of marketing solutions at Atlanta-based Ovations Management Solutions. Ovations Management counts Coca-Cola, Delta, Visa and Verizon among clients for which it helps manage tickets and sports entertainment.

Just as worrisome as unused seats is the specter of the desperate giveaway, a last-ditch attempt to find the nearest available bodies who can help fill out a corporate ticket block. This familiar scenario can leave a loyal customer or prospective client feeling something less than appreciated.

“If you’re in a suite and you chat up the guy next to you and he says, ‘I got the tickets because my brother-in-law gave them to me,’ how special do you feel?” said Dave Grant, principal at marketing agency Team Epic. “That’s a real problem.”

It troubles teams and venue operators as much as the companies and sponsors seeking solutions to the conundrum of making sure tickets aren’t just used, but put in the hands of people who affect the bottom line. Why? To cite the most
obvious reason, fewer people in a stadium or arena cuts into ancillary sales ranging from catering to souvenirs. Much more important, though, is the specter of losing a sponsor or suite holder frustrated by the hassles of mastering the art of corporate hospitality.

Many larger national sponsors — companies with tickets, club seats or suites at a slew of arenas and stadiums across the country — have turned to outside companies or created internal systems to control access and monitor results.

Stashing tickets in desk drawers is antiquated and ineffective. Instead, smart sponsors use technology to analyze ticket requests, track who is being entertained, and assess what resulted from socializing over, say, a Bulls-Clippers game at Staples Center.

“I don’t necessarily recommend to companies that they must hire someone to manage their suite or ticket inventory,” said Todd Fleming, vice president at Legends Hospitality Management, the company handling premium seat and suite sales for Cowboys Stadium and the planned new home of the San Francisco 49ers. “What I have seen work best is the company develops a plan among senior management.”

Fleming points to an approach that establishes defined advance deadlines for determining who will use the suite as well as larger parameters on how a suite will be used throughout the year.

Do top clients automatically get the best concert and the marquee games at the venue? Which events and games will be used for prospecting? Do clients and prospects commingle or are they invited to separate events? Other considerations: How do the various departments in a company share the tickets and how does each adapt its strategies to the overall hospitality goals targeted? What about employee incentives?

Crepeau, the Ovations Management executive, agrees with Fleming and other experts on the importance of priority. Who uses a sponsor’s tickets for a regular-season basketball game would likely differ from invites to a Bowl Championship Series football game, he said.

Depending on the ticket volume and the analysis (who was entertained and when, what did it cost and so on), Ovations charges clients $100,000 and up for comprehensive hospitality management, a sign of how detailed and complex taking a business partner to a ballgame has become.

No matter who manages it, hospitality works best when it’s meaningful and makes a connection beyond receiving a free ticket.

Jeff Marks, managing director at Premier Partnerships, a sponsorship sales and consulting firm, points to a deal he worked on between the Rose Bowl and jeweler Tiffany. The agreement signed last year made Tiffany the presenting sponsor of the President’s Ball, a black-tie gala preceding the game, while also encompassing VIP seating for the Tournament of Roses Parade and the bowl game.

Such access, combined with Tiffany’s exposure as maker of the game’s trophy, makes for a memorable trip for the company’s clients. “You’re creating an authentic relationship,” Marks said.

At the other end of the spectrum, Marks said that sometimes companies and teams make a mistake of automatically including tickets and hospitality when it might be superfluous — and damaging to prospects for a long-term relationship. He offers as an example a local fast-food franchisee group, which may benefit from backing a team by advertising at games and on broadcasts, by passing out samples and coupons, and holding other promotions. There may not be much, if any, need to entertain customers.

In a similar vein, companies have to make sure they have the right property, audience and approach in mind, said Michael Burch, vice president of national sales and marketing at Speedway Motorsports. With a key customer or prospect, it could be important to invite a spouse or other family members, too, perhaps creating a more lasting memory. Pit-road tours and visits by drivers and crew chiefs, standard fare in many NASCAR hospitality packages, can also enhance the invitation.

“To me, it goes back to who are my customers,” Burch said. And employees. As Burch said, “If you run a sales contest [for tickets to a speedway suite], you better make sure your employees like racing.”

Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication.

Turnkey Sports Poll

The following are results of the Turnkey Sports Poll taken in December. The survey covered more than 1,100 senior-level sports industry executives spanning professional and college sports.

How much of a priority is market research and/or customer insights within your organization?

Top priority 19%
Very important 50%
Somewhat important 20%
Not very important 6%
Not at all important 1%
Not sure / No response 4%

 


Which of the following best reflects your opinion on your organization’s budget for the following types of research?

  We should
spend more
We spend
the right amount
We should
spend less
Not sure /
N/A
Fan/consumer research 56% 30% 2% 12%
TV ratings research 18% 53% 9% 20%
Media impressions research 29% 47% 8% 18%

In what area of sports does research/analysis…?

  Marketing Sponsorship Ticket sales Player
operations
Other Not sure / N/A
… have the biggest impact 28% 32% 26% 8% 1% 5%
… have the largest budget 30% 25% 18% 18% 1% 8%
… need to be utilized more 20% 32% 31% 5% 4% 8%

Source: Turnkey Sports & Entertainment in conjunction with SportsBusiness Journal. Turnkey Intelligence specializes in research, measurement and lead generation for brands and properties. Visit www.turnkeyse.com.

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