Sports Marketing: Putting Butts in Seats

Sports Marketing: Putting Butts in Seats
Sports marketing is really very simple. It’s about figuring out ways to put butts in seats. It’s very different from typical product marketing / branding, which focuses on the product and its inherent benefits. Sports marketing is all about creating interest, hype & hope -- rallying the fans to pull money out of their wallets and buy a ticket to a particular game.

The unique benefit sports teams have over consumer products is that their customers truly are “fans”. Fans make deep, emotional connections to the team, very different from being a loyal user of a particular product. I may be a 100 percent loyal user of Heinz, but I don’t develop the same kind of emotional bond with my Ketchup bottle as I do with my “team”.

Sports marketing is focused on generating interest in “the collective team”, not a single player or superstar. Players come and go, but the team – the logo – remain constant. While a sports marketer should leverage its key players, focusing all efforts on building the brand on the back of a player can backfire when the player’s contract expires and he or she moves on (see Williams, Deron), or when a hamstring gets pulled and the player can’t play (see Boozer, Carlos).

Sports marketing is about pricing the product correctly. Many sports teams let their Chief Financial Officer drive ticket-pricing decisions. That’s not the way to do it. Pricing decisions should be derived from a combination of ticket demand estimation and historical pricing data, as well as a realistic assessment of the team’s chances of success and the competitive environment of the local marketplace. Just because the Los Angeles Lakers can charge $5,000 for courtside seats doesn’t mean the Golden State Warriors can do the same. Different markets have different levels of team success, different levels of optimism to account for, and different historical pricing data to analyze.

When I took over the marketing of the Utah Jazz, our season ticket base was around 6,700 seats. After doing a hefty analysis of our historical pricing data and the competitive environment – and coming off a less-than-stellar 23 game win season - I convinced Team President Denny Haslam that we needed to drop prices on over 75 pecent of the arena seats. My analysis had shown that in most of the upper-deck pricing sections, we’d make a lot more money by dropping the prices significantly. We did so, and within 18 months the Jazz had vaulted to number one in the NBA in season ticket sales (15,400 seats), and our gross revenue per game increased some 40 percent. Once the demand for tickets increased, THEN we slowly increased ticket prices again.

Sports teams make-or-break their sales on season tickets. It’s much easier and efficient to sell 43 games than one-at-a-time. My first season at the Jazz we faced the challenge of selling nearly 13,000 single-game tickets to every game – an impossible task for a great many of the home games, particularly those early in the season against less than stellar opponents (re: New Jersey Nets or Cleveland Cavaliers). But by more effectively re-pricing the season tickets – many as low as $5.00 per game – we reduced the number of single-game tickets we needed to move to only around 3,500 per game – which is relatively easy to do. As a result, we sold out 54 or 56 consecutive home games the next season, and for the remainder of my stay with the Jazz, we sold on average about 95% of available tickets.

One single-game ticketing experiment that interests me greatly has been conducted by the San Francisco Giants for the past three seasons. They partnered with a company called Qcue, which has developed a variable pricing software platform that allows sports teams to charge different single-game ticket prices for different games based on demand. The Qcue software monitors ticket sales, ticket availability, and demand (as well as a qualitative assessment of opponent, day of week, weather, or other things that could affect demand that the Giants staff can input for each home game). The Qcue software adjusts priced daily to maximize sales and revenue. I met with Giants officials when they were entering season 2 of their affiliation with Qcue, and they were extremely happy with the results, seeing a 15 percent average bump in single-game ticket sales revenues. The way it worked was very interesting. For the same seat, pricing could vary from $8.00 for a weekday April game against the Arizona Diamondbacks to $50.00 for a July weekend game against the Dodgers (the Giants hated rivals). The Qcue system altered prices daily to make sure each section sells out. The system seems to be working – the Giants have sold out virtually every home game over the past three seasons since they began using the Qcue system.

So how do you sell single-game tickets? Create hype. It’s all Ringling Brothers and Barnum and Bailey. Hype the game like it’s the most important event in team history, that missing it will ruin your life for time and all eternity. Hype, hype, hype. It’s OK to leverage the opponent’s assets. “See the Spurs three-headed monster of Tim Duncan, Tony Parker, and Manu Ginobli”. It’s very simple. Use social media to make special offers, especially “late” offers close to game time. Thirty minutes before tipoff, text out 50% off tickets for all remaining seats. Those seats are worthless once the game begins.

Eric Schulz

For more information on effective marketing, check out my new book “The Smart Marketer’s Toolbox”, available on Amazon.com in both paperback and Kindle - http://amzn.to/QPj5MV.