4 June 2021: College Athletics Decision Making! Pricing! Discounts!
Number 87
Hey!
I’m getting close to 100 editions of this thing now!
How do we celebrate?!
I’m going to be at Ticket Summit and the ALSD in August in Las Vegas. I’ve lined up some great panelists including Kate Howard, Josh Ludwig, someone from the UFC and MLS. It is going to great! Get there!
Summer is almost here so I’m going to be traveling, finally:
Miami
Orlando
Boston
Las Vegas
New York City
Atlanta
I’m also looking at the feasibility of going to London in the fall…because I haven’t been to the new Tottenham Hotspur Stadium and I’m out of Fortnum and Mason’s hot mustard!
I’m working out the date for the pricing webinar, but I’m recording the presentation to post to the podcast feed over the weekend. And, I’m doing a Q&A episode on pricing as well. So if you have pricing questions, send them my way.
To the tickets!
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1. Scott Friedman’s “Scott’s Takes” brings up the ticketing ecosystem of college athletics:
Big Ideas:
Strategy before tactics! Duh!
Some businesses do certain things better than others. Duh!
The Marketing Mix is powerful and you have to be careful how you use it. Duh!
First up, Scott called me when he started this series and asked me if he should do it. My advice is to share your ideas. So I want to congratulate Scott on putting this video series together and his willingness to share his ideas.
It isn’t always easy, but to be an expert you have to take stances, make predictions, and be willing to be wrong in public.
Lord knows I’m wrong often enough, but I take enough cracks at things that y’all forget a lot of them!?
The video Scott put out on Thursday is worth the 6 minutes to go through if you are in the world of college athletics or if you are doing any sort of outsourcing because it highlights two things that I really like to shine my light on regularly:
The Marketing Mix
Core Competencies
Let’s start with core competencies.
This is a pretty simple idea that really only became commonly used around 1990. It is the radical idea that some businesses do certain things better than others.
No business can be everything to everyone.
Just doesn’t happen.
Case in point, early in my time doing consulting work, I tried to be a radical generalist and position myself as an Organizational Development consultant.
It was BS. I’m not an OD consultant. I know two things better than most people: marketing and strategy.
Inside of those two areas, I know certain things even more:
Pricing
Marketing strategy
Opportunity Discover and Creation
Branding
You may have even picked up on that over the years.
Colin Lewis, Ireland’s most famous marketer, has called me “The Pricing Guy”. I’ll allow it and use it just like I use “The King of Tickets” to really boost my brand.
What I’ve just attempted to lay out for you are my core competencies.
This matters because as we emerge from the pandemic, you are going to need to understand and utilize the right resources for the right jobs. And, one of the key jobs is going to be the diagnosis of the job to be done.
So keep what a partner’s core competencies are in mind at all times.
To the Marketing Mix.
I’ve discussed this before, but to refresh:
Product
Price
Place
Promotion
At the heart of Scott’s take is this idea of the Marketing Mix and understanding it.
Scott really focuses on the five companies that are involved in his example, but having your tickets move through so many touchpoints to get to in front of your potential market highlights to me the necessity of doing strategy before tactics.
Strategy is the foundation of your business.
It answers the two magic questions brought up by Professor Roger L. Martin:
Where will you compete?
How will you win?
And, leads directly into the setting of SMART Objectives which are:
Specific
Measurable
Ambitious
Realistic
Time-Bound
After you’ve done your research, gone through the process of STP, and created your strategy, this is when you can start to consider who you should partner with and how, unless a partner is going to sit down and walk through the entire process from start to finish with you directing the process.
How you start figuring out what to do is by briefing your potential partners. In a very specific way that will help you and your organization get the best results.
Here you go:
Finish your strategy. Before you have a strategy in place, you don’t start worrying about the 4 Ps.
Invite your potential partners in.
Send your brief to them in advance with your research results, objectives, funnels, and all that fun stuff.
Spend an hour or two going through everything, but don’t go too far and overbrief. You don’t want to predetermine the feedback you are going to get.
Allow your potential partners to have a solid think and then you get together and debrief.
Review the debriefs. Look at the budget implications, from the cost and expense side.
Then make a decision.
On to the 4 Ps now, here are some ways to think through them from my own work:
Product Creation: This should be a core competency of any property because you should have a good idea of your market, your fans, and your customers so that you can create products and experiences that will fill the right needs and desires.
The challenge that often comes up is having too many products.
A general rule of thumb is that if a customer has a lot of choices it makes it easier to say, “No.” Decision fatigue is real.
It is easier to create new price points or products than it is to kill them, but you have to be a stone-cold product killer.
Price: “The Price Guy,” says that price is both art and science.
You have to be careful with the idea of full automation because you should remove the human element from your pricing decisions.
There is a tendency in most industries to underprice. In tickets, there is a tendency to overprice and discount.
Discounting tells me that you haven’t done enough research and strategy work.
Be very careful with your pricing.
Overpricing teaches people that your product isn’t for them.
Discounting teaches people that there will always be a better deal and that you don’t believe in the value of your product.
Penetration Pricing teaches people that the price should always be artificially low and often puts you in a position where you can never capture much of the value you’ve created.
Place: This is distribution.
I used to hear this a lot from brokers as a sales pitch, “We can get you on all the boards and on all the sites.”
The problem of getting tickets into the market so people see them is fixed.
In fact, now the problem presents differently. It looks more like are the products showing up in too many places?
Your distribution should fit your strategy.
Distribution is a strategic decision built off of knowing your customer, understanding how they act, and creating a compelling product that they want to buy.
Spray and pray can feel like the right decision, but it isn’t usually a good idea. The better decision is to be very deliberate in your distribution strategy.
Promotion: This is how people find out about what you are selling.
I put sales in this part of the process and that’s going to make some of y’all have an aneurysm because you are going to stomp and yell that sales and marketing are entirely independent.
First, you’d be wrong. (We will save why for another day.)
Second, I’m glad you are paying attention.
In this part of the mix, you need to understand your market so you can make the best decisions on how to sell and promote your products.
There is not a one-size-fits-all approach here.
For some businesses, blasting out tickets early to clear some inventory is going to make a lot of sense. You may achieve that by running some sort of promotion on the web using Facebook ads, email blasts, or something else.
For other businesses, selling suites and sponsorships will require more consultative selling that revolves around relationship-building, value exchange, and more.
For others, the mix might shift all over the place.
The key is that you have to make a decision based on your strategy.
So if you are a theater, a sports team, a venue, an artist, anyone: keep this stuff in mind before picking a partner:
What are my goals and what does my strategy look like?
What are my partners’ core competencies?
Does this fit into my strategy?
If this is something you’ve been thinking about, there are some great partners and you should be having a lot of conversations to see what is the right thing for your business going forward.
Scott highlighted Learfield, Elevate, Dynamic Pricing Partners, LogoTix, Broker Genius, DTI, and Eventellect. I’d even suggest looking at folks like Stagefront, Ticket City, Ace Tickets, Barry’s Tickets, and other smaller or more local providers.
The key is to set your strategy, know your goals, and do what is right for your business. Steer your own ship based on what is best for you.
Big Ideas:
Discounts destroy your brand in a number of ways. So many ways!
Pricing requires research.
Don’t overdo your pricing research because that often means that you are going to have too much data, causing you to make confused decisions that confuse your customers.
I don’t want this week to turn into a whole thing on pricing since I’m going to do an audio version of my price presentation. I’m working on putting together a few webinars with Booking Protect including one on pricing that’s a live version of my pricing presentation.
And, I’m doing a pricing Q&A on the podcast stream. So if you have any questions…send them over, I hope to record the answers over the weekend.
But to bring out a tired refrain:
Discounts destroy your brand.
Since we’ve been seeing all sorts reasons for Penetration Pricing, discounts, or poor pricing practices, I want to share a few thoughts on each of these this morning and they are directed at everyone, not just the A’s, who sent out the discount code for “checking in.”
First poor pricing decisions are driven by a few things:
Lack of research
Research that is completely irrelevant
Too much research
You catch my joke here because there are so many ways to go wrong on pricing?!
Lack of research usually means that folks are just sticking their finger in the air or pulling the number out of thin air. This might get as sophisticated as cost-plus pricing, but typically it is all guts or guesses.
I’ve seen plenty of teams and organizations screw up their price structures in the early days of the last decade because they were trying to “beat” the secondary market and I could tell their research was simply looking at StubHub to see what the highest or average price listed were.
Research that is irrelevant is an idea that Ken Troupe asked me about when I was putting together the pricing presentation for the National Sports Forum. And, his thinking was that shouldn’t I tell people to go out into the market to see what people are paying for other things.
As I told Ken at the time, it isn’t a bad question or suggestion, especially if you use the information to help you figure out and understand better what people value and are willing to pay for.
But in regards to your price, it is irrelevant. Because people aren’t making decisions about the price you are charging compared to the price they paid for a different event.
They are making a decision on your price based on perception and perceived value.
They may pick between two competing options, but the research shows that we often misfire on what the competition is and that the purchase path for a customer is a giant bouncing ball with no pattern whatsoever.
Your price is about the perception of value that you create for your fans and customers.
That’s all that matters.
And, too much research often leads to creating too many products, price points, or confusing scenarios for your customer.
Paralysis by analysis is real and it cuts both ways.
Next, Penetration Pricing is very dangerous because it often seems like it makes a lot of sense.
The rationale usually plays out like this for decision-makers, “If we can just get them in the door, they’ll love it.”
The reality is that people may come in and love what you are doing, but you’ve also taught them that they should expect to receive an artificially low price.
You also might attract the kind of customers you don’t want.
You harm your brand. And, as we see often, the people captured by Penetration Pricing don’t have any brand loyalty.
This is really another way of destroying your brand!
If the Penetration Price is the right price for your market, set it there and work on offering more value and capturing more of that value through the rest of the experience. Don’t use Penetration Pricing as some trick that is going to pay off later.
Finally, discounts!
What more should I say about discounts?
Discounts destroy your brand by creating the impression that the value you are saying is in your product isn’t really there.
Discounts destroy profit.
Again, Mark Ritson’s research pointed to the idea that for every 1% of the price you lose to discounting, you lose 40% of your profit. That is a huge number, but I went through my records and the number I got was around 25%. And, there was a Harviard Business study that put the number at 10-11% for each 1% loss in price.
No matter how you look, big numbers, and bad impact.
Discounts teach people to wait because there will likely be a better deal and this feeds the incentive to discount even more because people aren’t reacting to your previous discounts!
It is an ugly cycle.
So get your price right from the start.
Start with research, but don’t overdo it. And, don’t discount.
The challenge is that I get about 30 discounts a day now from teams and organizations around the world. Usually with some narrative or some background information on the situation.
I’ve begun to see a pattern here in how these decisions are made from all the feedback, so keep it coming:
The discount is there because the organization didn’t want to learn anything new or change its practices.
The discount is now happening because just throwing open the doors and waiting for demand has been less successful than folks imagined.
The discount is there because demand generation wasn’t given enough consideration so let’s just throw out a discount because that will work. (Price promotions don’t drive demand BTW. They may get you sales, but they often cannibalize sales that you would have gotten anyway.)
3. Live at the Bowl in Melbourne teaches us a lot about successfully reopening:
Big Ideas:
Look at your non-customers. It is always a bigger percentage of the market than your customers.
Think about establishing habits.
Get to know your market.
For the after times, I’m going to throw this out there but if you need yourself a new Chief Marketing Officer/Chief Revenue Officer and you are in Australia, England, France, or Spain, I don’t even have to ask Kathryn if it is okay to take the gig. Just tell me how much and tell me when to be there.
I joke because NYC is also on the list.
All kidding aside, I like to go around the world for examples because we can learn so much from others.
On many occasions, I’ve mentioned my love of Australia.
My trip to Sydney, Parramatta, and Melbourne was truly a highlight and I can’t wait to get back.
The Sydney Opera House is the coolest building I’ve ever seen.
Having the Commissioner of the AFL be the opening band for my nonsense, great!
Hosting a workshop on the other side of the world with folks paying to learn from me, WTF!
So my ego gratification keeps me going back to Australia for more examples. This story is great because it has numbers we can all look at to help us think through things a little more completely right now.
Let me cherry-pick three:
Just over 50% of people were first-time buyers!
21% of buyers bought to support the return of live events.
91% of attendees were from outside of the city of Melbourne. So they traveled to be there.
Why do I pick those three numbers?
Let me work through them really quickly.
First, over 50% were first-time buyers.
This shows you one important thing, look to see what your non-customers are doing because they are always a bigger market than the people you are serving and you can find ways to create new value by learning from them.
If you took a business as usual approach here, you’d miss these people.
This is what is happening in a lot of places right now.
“Let’s get back to normal?!” Am I right?
This 50% of people are exactly why I tell you to research and segment your market based on behavior.
Second, 21% of people bought to support the return of live events.
I wrote about habit formation earlier in the week. This 21% number shows us two opportunities.
One, that highlighting a message around supporting the return of live entertainment and events is worth looking at because 21% of people are buying due to that incentive.
Second, it opens the door to an opportunity to get people to establish a new habit.
How?
You want to use incentives like offering more value if you buy a second show at the time of attendance, following up, and keeping people involved after the fact.
I’ll go back on my own habits.
I always buy the Pearl Jam bootleg when I go to shows. It is a habit.
One way that Pearl Jam keeps me coming back is by offering those bootlegs so I am always reminded about the show and the people I was with.
They could easily strengthen that habit and offer more value by allowing me the option of pre-purchasing the bootleg.
This would do a few things:
Lock in my purchase earlier (more money, sooner)
Increase the perceived value of the Ten Club (I’ve got the membership and get great seats and can pre-order my bootleg!)
Getting the bootleg a few weeks later would be like a little surprise that would elevate my connection to the band, the show, and the habit of going and spending money!
That’s one example, but think it through.
I’m curious how to establish the habit of getting you to share this newsletter with your friends and colleagues so I can continue to grow my audience.
Give me some suggestions!
Third, 91% of people are coming from outside of Melbourne to attend a show.
This tells me that people are willing to travel for events and for something they value. That’s not a newsflash, but knowing where people are traveling from can tell us a lot about pricing, targeting, and positioning.
So it would be really wise to try and gain similar information about your market.
I know that one team I work with and talk with a lot has been telling me how talking with their customers led them to see a complete shift in buying patterns which helped them reposition their premium seating.
Talk to your market.
It is good for you.
You might start by testing these numbers out in your own community.
And, recognize that your customers and your customer base have changed, meaning that you need to change as well as the Saatchi Gallery is doing with the expansion of their digital ambitions using cloud-based technology created by SecuTix.
4. Audience development in the symphony needs a market-focused effort:
I had Aubrey Bergauer on the podcast in the before times and we joked that our focus on revenue meant that we were likely to be cool on making it to the other side of our careers in one piece.
Aubrey is great and her willingness to follow the research, talk to customers, and take risks is a really awesome example to follow.
This piece talks about the California Symphony and uses “The Jobs to Be Done” framework to examine Aubrey’s success with the Symphony.
It is worth spending a few minutes to read through Ruth’s analysis and thinking through how you can apply this to your role and your business.
From my point of view, I’m going to highlight three things that stick with me:
Being Customer Focused
Being willing to follow the research
The importance of segmentation by behavior
First, you don’t really have a chance to make huge, productive adjustments to your business if you don’t listen to your customers.
Again, this is on display all over the place.
But the key foundation of successful marketing and when I do reinvention work with businesses is to start by recognizing that you don’t really know anything. You might have a hypothesis, but until you go talk with your customers and potential customers, you don’t know a thing.
The quote about “being relevant” is important here. Because relevance is an ongoing conversation you have with your audience.
Major League Baseball is dealing with this now as they work to find a way to engage with younger fans. The NFL took action on this same idea when they did their Nickelodeon broadcast.
By going to your market and asking questions, you have an opportunity to remain relevant.
But you don’t decide what is relevant, your market does.
Second, you have to be willing to listen to your market.
This piece talks about classical music organizations having an egocentric view of their place and their value.
It is a bad idea because you don’t define value, your market does.
That’s what makes this case study interesting because Aubrey and her organization listened. They didn’t get offended, they listened.
A lot of times when I talk with people about why they weren’t attracting the audience they felt they were entitled to before the pandemic, I’d go through a list of feedback and examples that my colleagues and clients in other industries had shared with me.
When I did, people would get huffy and say something like, “I don’t believe that.”
I don’t get defensive, but I would ask, “Why do you say that?”
Typically, the answer would swerve back to something like “gut” or “feel” and when those didn’t pass muster, they’d fall back on that egocentric bit that they just know better than the audience.
In business school that’s called being Product Oriented, but in Dave’s workshops its called being a dummy because it is usually a good sign that a business is going to be in trouble soon.
Third, segmentation is important and the way that Ruth and Aubrey talk about it could confuse you.
My work points me towards the belief that segmentation based on behavior is more valuable and useful than segmentation based on demographics.
The trick in this example is that Aubrey talks about targeting “Gen X” and “millennials”, but here’s the catch to that. She is doing that because she has likely used a tool like a tool I learned called the Meaningful/Actionable grid that helps me figure out what is meaningful and actionable in market segmentation.
In my reading of this, I see that these demographic designations matter because it is a nod to the fact that adults between the ages of 30-55 are picking other forms of entertainment over the symphony. Much like the NFL’s finding that 18 was a meaningful cut-off point to turn someone into a football fan.
This matters because Machine Gun Kelly, my son, and Prince George are all in the band of people called Gen Z. I’m betting they all have different wants, needs, desires, and behaviors.
So pay attention to behaviors and know that demographic segmentation is often a secondary driver, but shouldn’t be the primary form of segmentation.
To recap:
Be willing to get into the market and see things through the eyes of your customers.
When your customers tell you what they want or need or desire, you have to listen or you are wasting your time.
Segmentation by behavior is what matters because demographic segmentation is arbitrary. Because someone was born in 1979, they are Gen X and because someone else was born in 1980, they are entirely different due to some arbitrary birthdate/generation line that a BS research firm made up?
5. The Edinburgh Fringe Festival is magic and making sure it goes off this year is important:
I highlight this story because it shows the challenges that events are still dealing with as we still try and get completely out from under the pandemic.
This story also highlights a few things that we are going to have to think through once we are able to catch our breath:
The arbitrary nature of government decision-making around public events.
Building and maintaining an audience even when they can’t make it to your venues.
The power of habits.
First, if we’ve learned anything from the pandemic its that disjointed decision-making leads to poor outcomes and usually leads to more pain.
I think that’s one key idea that we all should confront heading out of this mess.
This means, pressuring our leaders in government to gameplan how they are going to deal with events beforehand.
Scenario planning is key for any business, or it should be.
As organizations and leaders, the same thing should be on our agendas.
Maybe not for a pandemic, but changes in regulations, capacity, demand. All of these demand our attention and some focus before they become emergencies.
Second, building and maintaining an audience when people can’t be there is something we’ve seen a lot of people do.
The Fringe Festival has done that. The New York Philharmonic did a digital revolution to meet this need. I highlighted the Saatchi Gallery and their emphasis on finding ways to continue to do that after the pandemic.
These should all be inspirations because the desire to be a part of a community isn’t going to leave us once we can go to shows or events.
To go further, this idea that the pandemic imposed on folks is actually a great idea at any time. As an example, look at how the Australian Football League sells global memberships.
And, to build on this, I’ve seen a tool from a Canadian company that can take memberships like this to another level with the ability to create a virtual experience that captures some of the in-person excitement even if nothing beats being there in person.
The key is that you have to consciously focus on giving people value for being a fan and supporter no matter where they are in the world.
Finally, habits are back.
The Festival’s CEO, Shona McCarthy, says it best when she talks about the 75-year history of the festival and breaking that connection. It has become a big, beautiful habit for a lot of people.
It isn’t just the Fringe Festival either.
Maybe going to a baseball game with your kids is a habit that was broken before the pandemic.
Going to see the footie at the MCC could have been a habit that was broken. As I wrote about a few weeks back, the friction in the ticket process now is harming the ability of the AFL to get all of their fans back even with fewer restrictions.
The list goes on and on.
The pandemic interrupted your habit of going to see Phish on NYE!? Maybe I like staying home and toasting my kid with champagne?!
The pandemic has meant that I’m not going on my annual trip to Durham. Maybe I don’t go to see the Bulls anymore and instead divert myself through Western North Carolina to drink beer in Asheville and I go see their minor league baseball.
I’m throwing options out there now because nothing is going to get between me and my Pearl Jam habit and my Tottenham Hotspur habit.
What I do want you to do is think about the habits that have been broken and how you can fight them staying broken.
To be successful after the pandemic, it is going to come down to three Ps:
Planning
People
Persistence
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I like this Linktree because I can just point y’all there and you can get links to everything from me! My website is being refreshed this week and I think that is going to be more useful to folks.
Check out Booking Protect! I chatted to Vikki, Liam, Cat, and Hayley this week about some cool new ideas going forward including those webinars and a potential Dave sighting in London! Most interestingly is the continued elevation in customer uptake of refund protection since tickets starting going on sale. The number is around double what it was before the pandemic, signaling that people really want that peace of mind. So check them out!
I also got a chance to chat with my folks at Activity Stream. The Activate tool is great and I had Martin back on the podcast to discuss that. Einar and I have some plans that we hope to unveil soon, but check out what Activity Stream is up to because they can help you turn your data into insights that can create magical moments with your customers.
If you didn’t get a chance to listen to my conversation with Kate Howard from Eventellect, check it out! We cover the “Unified Single Game” concept at the heart of Eventellect’s partnership program and Net Promoter Score. Get the worksheet we created by sending me an email.