SBJ/Sept. 22-28, 2014/Opinion

How teams can benefit from direct relationship with fans

The impact of the secondary market on teams has been an important topic in the industry for some time, but recently there seems to be more emphasis on analyzing pricing data so teams can evaluate and adjust their prices in order to stay competitive. While I agree that it’s very important for teams to be aware of the secondary market and leverage variable and dynamic pricing strategies as part of an overarching sales plan, they shouldn’t forget that their competitive advantage differs from secondary market’s.

Thinking back to business school, I clearly remember learning about the dangers of competing on price. As soon as one brand decides that the best move is to undercut the others, it’s not long until a price war ensues, and price wars generate casualties. The two ways that non-sports brands avoid this now are:

1. Making it as hard as possible to compare products (have you noticed that the model number for that TV on sale at Best Buy doesn’t exist at Wal-Mart?).

2. Implicit collusion where just the threat of constant price-matching keeps everyone from cutting prices.

If a team and its fans think of tickets purely as inventory, the secondary market makes it impossible to avoid comparisons. Since these marketplaces don’t care nearly as much about the actual ticket price as the teams, the threat of price-matching has much less impact on them.

At the core, StubHub and every other secondary ticket marketplace are transaction-oriented systems. They let sellers sell at whatever price they like and ultimately the actual purchase prices are driven by market demand for specific games and locations. If teams over-focus on competing with these transactional marketplaces, not only will they lose, but they will do so by disregarding the most important competitive advantage that they have — their direct relationships with fans.

A team builds a foundation with fans through experiences and game-day memories that go beyond a ticket purchase.
Photo by: GETTY IMAGES
In the past, teams felt like customers were willing to spend more to buy tickets from them directly because customers trusted them more. The truth is that most consumers now trust the secondary marketplace just as much as the primary. A 2013 Turnkey Intelligence study on MLB ticket buyers showed that perceptions of ticket authenticity and availability are generally comparable between StubHub and team websites, so this cannot be a team’s point of differentiation.

Customers value access, experiences, engagement and a level of treatment that they can and should only get from the team directly. Debbie Knowlan of the Atlanta Falcons, who transitioned from director of season-ticket services to director of customer relationship management, has a great perspective on this. “Being able to make the connection with fans on a one-to-one basis and delivering experiences and game-day memories is the foundation to building solid relationships that go beyond a ticket purchase. In a world that is consumed with social and digital communications, people still look for that direct interaction with the team they support and are passionate for — this is what creates a fan.”

This is one of the biggest reasons behind leveraging CRM across an organization — it is the best way to aggregate and analyze all of your brand’s touch points with every fan and customer. It is the ultimate weapon to convert relationship data into long-term, sustainable revenue, regardless of what tickets are selling for on the secondary market.

Here’s the scary part: Even StubHub has realized that the teams have an advantage in this manner and is attempting to take that relationship away. In multiple conference presentations, I’ve seen StubHub talk about its efforts to create value-added experiences that keep customers coming back instead of alternative marketplaces, including the primary market. This is the real long-term danger to teams. If the secondary marketplace is committing its resources to better relationship building with buyers, along with maintaining an open marketplace where they have much less concern for the actual ticket price, it makes teams vulnerable on all fronts.

The most important asset a team has is the direct relationship with its passionate fans, with extra emphasis on “direct” (it appears eight times in this article for a reason). Teams cannot rely on broadcast channels to handle the relationship building. Ratings can tell teams how many people are watching or listening to games, but one-on-one conversations and interactions tell 100 times more. These are the data points, even more so than ticket prices, that will drive sales and retention. The fan’s favorite player, the time they got to meet him at training camp, when their team won in overtime on his birthday, the look on his child’s face at his first game, that time the team tweeted back to him … the value of this emotional capital that they have direct access to is immeasurable.

Wait, let me take that back — it can actually be quite measurable. This is the fundamental reason for CRM, to collect this data in an efficient, measurable and actionable manner. This is why CRM systems are designed to integrate with ticketing, email, research, merchandise, loyalty and more. Each of those systems itself has value, but bringing them together to have a unified picture of their fans enables all of a team’s relationship-driven sales, service and retention efforts. It empowers their staff with all the information they need to create a deeper bond with fans. Turnkey Intelligence had another great statistic that showed that when a fan felt that a call was customized, that prospect was 35 percent more likely to purchase a ticket plan. That metric is independent of price and clearly demonstrates the potential lift that your direct fan relationships can generate.

Scott Loft, vice president of ticket sales and retention for the Oklahoma City Thunder, a team that is very successful on the court and has an active secondary market, relies heavily on CRM-based strategies. Why? “Relationships are at the very core of what people want from their day-to-day lives … especially from the teams that they follow so passionately. At some point, all teams are going to be faced with a rainy day where you need your fans to make decisions with their hearts as much as their wallets and minds.”

Loft knows that his best long-term strategy to retain customers isn’t around team performance or ticket prices, it’s based on relationships. It is the only sustainable strategy against the secondary market — let them sell tickets while you sell your fans so much more.

Russell Scibetti (russell.scibetti@koresoftware.com) is vice president of product strategy for KORE Software. He is the former director of relationship and database marketing for the New York Jets. Follow him on Twitter @rscibetti.
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