How one franchise is making membership more meaningful

Membership has its privileges” is the guiding, core principle of the American Express card. The consumer pays an annual fee and, in exchange, he/she is entitled to earn points by way of their spending in the Membership Miles Program. The miles can be converted by the member to purchase a variety of products and experiences ranging from vacations to golf clubs to electronics to unique golfing and driving experiences to meals and travel. It is up to the members to decide the benefits most important to them and to act accordingly (by spending) to acquire those benefits. It’s more than a loyalty program because the member pays a membership fee, and unlike most loyalty programs, the benefits are more varied and appealing, dependent upon one’s interests.

Loyalty programs in professional sports have seen varied degrees of success over the past 20 years. They have failed usually because of the lack of quality incentives, or because of the level of spending or attendance necessary to accumulate enough points to earn a meaningful reward. For the most part, these programs have been free and thus the enrollment numbers large, but the actual participation and involvement has been much smaller.

The Padres’ membership program focuses on season-ticket holders. Photo by: SAN DIEGO PADRES

European sports franchises, particularly those in football, have referred to their supporters as “subscribers” or “members” for some time. The level of benefits usually correlates to the amount of the ticket purchase and, in some cases, the length of the relationship between the subscriber/member and the club. There has been growing interest in this approach in the U.S., particularly among MLS teams. A particular concept and implementation by the San Diego Padres has caught my attention.

The Padres have launched a new membership program, the first phase of which focuses on season-ticket holders whose purchase of a ticket plan qualifies them as a member. The second phase will focus on general ticket sales prior to the 2013 season. For these prospective new members, signing up to become a member is free, and then they can move into blue-, gold-, and platinum-level memberships that include 21-game, 41-game, and full-season plans, respectively. (Consider the ticket purchase as the membership fee or dues.)

Blue, gold and platinum members select which type of membership that best fits them (fanatic, social, business or family). As the members’ status increases, so do their benefits. It isn’t a loyalty program based upon points, but a membership program designed to give fans a greater sense of belonging with the team, and benefits and opportunities reflecting their interests and type of relationship with the team and the organization.

Memberships can be tailored to family, business, social or fanatic, depending on a buyer’s interest. Photo by: SAN DIEGO PADRES

For example, a business member can select to participate in the Padres golf tournament and bring a client; a family member may elect to have a birthday party or an overnight campout in the outfield at Petco Park; and a fanatic member could choose to attend a Padres away game or an exclusive autograph session. In all of these cases, the choice belongs to the member.

“The membership program is something we’ve been working on for a long time, and we’re excited to finally roll [it] out for 2013,” said Padres President Tom Garfinkel. “It started with a few core themes. First, the idea that we needed to tap into fan psychology more and create a sense of belonging. Being a fan is emotional, not rational, yet somehow we keep going to market trying to rationalize with people. Secondly, we needed to create benefits that can’t be transferred on a secondary market and create more reasons to be a season-ticket holder than ever before. Finally, we needed to have more of a direct relationship year-round with our fans and have more information about what is important to them so we can deliver on it.”

Jeremy Walls, senior director of ticket sales and membership services, believes the program has been a huge success thus far and points to the statistics:

• 75 percent increase in “membership revenue” year over year (with that “membership revenue” being the club’s designated season-ticket revenue).

• Membership renewals running 44 percent ahead of last year at the same time.

• 110 percent more full (platinum) plans and 100 percent more half (gold) plans than the previous year, and 36 percent less 21-game (blue) plans — which suggests that membership benefits are driving customers to upgrade their memberships.

At a time when fans are spending heavily in the secondary ticket market, the season ticket, or any ticket plan, needs to be much more meaningful than just a place to sit and watch a baseball game. This membership concept being touted by the Padres, and under development by some NBA and MLS clubs, offers a meaningful attempt at creating a relationship through a membership that seeks to form a 12-month bond with the member much like a country club, or perhaps a civic club, or even a church. The most intriguing part is that this is only the beginning.

“This is just Membership 1.0,” Walls said. “It’s a foundation that we can build on, and layer new ideas and benefits using technology. In the future, it could include benefits from corporate partners, community initiatives, in-park gaming, instant seat upgrades, concessions, merchandise, fan-to-fan communication, non-baseball events like concerts … the possibilities are endless.”

Membership has its privileges and also its rewards, but maybe because it is in a sports context, the best thing might be belonging to a community of fans.

Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida, and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_Impact.