The Fan Business: Winning Sports Franchises Know That Selling Tickets Is Only the Beginning

By Greenberg, Paul | CRM Magazine, June 2013 | Go to article overview

The Fan Business: Winning Sports Franchises Know That Selling Tickets Is Only the Beginning


Greenberg, Paul, CRM Magazine


ANYONE WHO KNOWS ME knows that I love sports--which is a great deal different than saying I am good at them. What fascinates me beyond the game itself is how deeply involved the fans of a particular team are in the life of that team, its players, and even its management. I can't tell you how many times I've raged over how the Yankees' management spent "our" money on a free agent acquisition that I thought was incredibly stupid. I know that you all recognized yourselves in that "our," didn't you?

There are lots of explanations why fans have the passion they have for their teams. It could be childhood nostalgia, municipal pride, a love of play, living out a dream by proxy, a combination of some, or all of the above.

But despite this passion, we can't forget that professional sports teams are businesses first and thus have the same objectives of any business. They want to make money. They want to acquire and keep customers. Interestingly, most sports franchises are only midsized businesses. That surprises a lot of people. But they have the aura of the megalith, so they seem much larger than they are. Fortune magazine, in March 2013, said that the wealthiest franchise in all sports in the United States is the New York Yankees (I'm proud to say) with $2.3 billion. Huawei, a Chinese global information and communications technology solutions provider, made more than that in profit in 2012. But how many of you have heard of Huawei? Or root for them?

The successful core of a business that engenders the passion that sports does is the actual fan experience. How much does the team pay attention to the fan? The business model of a sports franchise is ticket sales (especially season tickets), merchandise sales, and concession sales. There are other parts to the business model--events among them. The Norwich City Canaries, a UK premier league football team, has seven distinct revenue-generating businesses.

But for a sports team to sell, they need to get and keep the fans engaged. That means the fans' experience with the team, whether it wins or loses, has to be memorable.

Much as I'm a New York Rangers hockey fan, the Rangers are by no means all that great at keeping fans engaged. But one of their rivals, the Philadelphia Flyers, has figured out how the fan experience needs to work--with incredible results.

HOW YOU DOIN'?

The Flyers realize that they have to engage every single fan who attends a game well beyond the game. They have a program they call "How You Doin'?" (taken from Joey on Friends), which entails training their entire staff in helping fans and empowering the staff to do so. For example, that means that, at least in theory, every fan has to be greeted when they come to the Wells Fargo Center for a game and asked if they need any help. In 2012, the organization reached 87 percent of the fans that way. Each of the greeters, who are made up of any member of the stadium staff, have a card that they can give the fan that allows the fan to ask questions and rate the greeter. It also tests for satisfaction: How did the greeter do? What kind of experience did you have at the stadium? More than 97 percent of all the fans who responded said they were highly satisfied with the experience. Not satisfied. HIGHLY satisfied. Wow.

This is one small aspect of the program, frankly. There are giveaways and contests, and the staff goes above and beyond their standard duties to solve fan problems. What also distinguishes the program, though, is that the Flyers incentivize the staff to do this. They win stuff. They get cash. Meaning they have a self-interest in the success of the program, not just a generic "team interest" in its success.

But that's not the biggest part of this.

THE EARLY BIRD CATCHES THE ... SEASON TICKET HOLDER

The bread and butter of any sports team is its season ticket holders. The biggest reason, of course, is that these fans are shelling out thousands of bucks to buy a series of seats at a game. …

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