Talking Tickets 25 September 2020: Happy Birthday To The Newsletter! New Business Models! More!

We celebrate a year!

Hey!

Happy Birthday to Talking Tickets!

You want to give gifts, I accept beer, bourbon, and Bitcoin!

Actually! If you dig the newsletter, would you share it with someone you think would benefit?

If you’ve been following along this journey, thank you! I couldn’t do this without all of you.

To launch Year 2 of the newsletter, I’m going to roll out a brand new digital course: The Seat Selling Sprint!

It is going to be a 3-week sprint to help you reset your ticket sales strategy for the new reality that we will be dealing with in 2021 and going forward. We will cover your value proposition, being customer-focused versus sales-focused, business models, and more.

There will be 5 lectures, 2 Q&As, and more!

For Talking Tickets readers and subscribers, I’ll throw in a bonus…sign up by October 10th and I will throw in a FREE webinar for your team, one of either:

• The Language of the Sale

• Fans For Life

Come to happy hour tonight with me, Ken Troupe, and Matt Wolff.

To the Tickets!

New here?

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1. Will it be six months or longer before fans are back at football grounds?

I love the gang from the Football Weekly podcast. They’ve done a great job covering different football business scenarios over the last few weeks.

This week, there have been a few stories about bringing fans back to football stadiums in England, Germany, and France.

Along with the Australian government using a footie match to test social distancing and lack of social distancing in the context of fans at games.

To give you an idea of where other places are:

• In Germany, the state can decide what limits to have on football matches meaning you might see a game with fans in Dortmund and a game with no fans in Munich. Much like the States.

• In France, we started out seeing that games had 5,000 fans. That could change.

• In Sydney, the government is set to allow 40,000 fans at NRL and other rugby matches.

As the guys on the podcast discussed, the restrictions from country to country can make the restrictions in England feel a bit arbitrary since England has not experienced a severe summer outbreak.

But mostly I included this because the story highlights the financial issue behind these discussions.

For clubs in different leagues, the main driver of revenue is having fans in the stands and it is putting a lot of clubs in danger.

Bury and Macclesfield Town have both gone bankrupt recently.

Rochdale admits to having about 1/3 of its revenue, minimum, from having fans in the stands.

We know having fans in the stands is important, but I think we forget how reliant some businesses are on just one revenue stream.

The other important point to keep in mind is the flywheel effect created by fans in the stands is being disrupted as well.

Take this into consideration, if you are a team and you don’t have a TV deal or a large TV deal and no fans, you might lose sponsorship dollars, F&B, parking, and other revenue streams along with lower revenue from merchandise and other revenues that can be driven more successfully by the in-game experience.

This can cause a downward spiral for an organization.

More concerning is the changing buying and consumption habits of fans.

I’ve written about the way that corporate buyers were looking to change their spending habits before the pandemic, but we are likely to see folks that were loyal fans or customers not come back in the same way or at all as well.

This shouldn’t be surprising to anyone that’s read Soccernomics because the authors wrote about the relationship between fan and club being fluid, but the fallout could be much more impactful because the data in the book only references the life cycles of customers and the way life stages impact consumption.

No one has relevant data on pandemic recovery!

What can you do in a situation where you might not be able to welcome fans back for six months or more?

Let’s assume you’ve cut all the costs you possibly can right now and let’s look at three things you can do to generate revenues:

First, reassess your digital marketing efforts.

In the example of lower league matches not driving streaming buyers, I caught myself thinking about bundling or offering up the streaming match for some other commitment for the time when the fans are allowed back.

Speaking of allowing folks back into stadiums, I know each country and each sport has its ins and outs on how tickets are sold, but for places that are struggling with revenues and need the money for now: have you thought about different ways to get folks to pay you now or buy something now that will help give you the cash flow?

I profiled the Warrington Wolves a few weeks back and I got a nice email this week from someone that shared their story of successfully talking to their partners and customers about the real situation they were in and the challenges they were trying to overcome to keep their festival going. (Both using ideas that I shared here, BTW!)

The results were that these folks saw a vast number of people buy something now, renew their commitment, or, at the least, kept their money in place, not asking for refunds.

So, can you add a sponsorship/membership/pre-sale option to help weather the storm?

Finally, look at the efforts by Tottenham Hotspur fans this week supporting Leyton Orient, who had to cancel their match with Spurs this week due to a coronavirus outbreak.

Spurs’ fans are pushing the purchase of merchandise and other items from the website to help fill the financial void the club is feeling by not being able to play Spurs in the Carabao Cup tie.

This effort has been helped in part by Harry Kane’s kit sponsorship this season so the fans and the Spurs have an attachment to the team that makes this relationship easier.

There isn’t always an easy path to revenue, especially now, but there are options and there is always a chance when you are creative, communicate openly, and are consistent.

2. What do the ticket sales of NFL games tell us so far?

First, this article is leading the way because it seems like the writer was almost shocked that buying patterns have changed during the pandemic…even for the Cowboys!

I’ve shared my thoughts here that we are dealing with 3 large scale disasters at once:

• Public health crisis

• Financial

• Mental

What does this mean?

It means that you are going to see changing habits to reflect the situation that buyers are dealing with.

TV viewership is down for all TV this year. The Emmys saw their ratings drop about 25% just the other night.

This has an impact.

Folks are shopping differently at the grocery store. One piece of research I saw said customers are shopping less, but are buying more when they do shop.

Unemployment is north of 8% and that’s just the reported number because it may not reflect gig workers or other workers that have seen their income significantly altered. In some of the cities that drive the American market, like NYC, they are seeing depression economics take hold. Other cities, just bad recessions.

So fans not coming back to games during a pandemic isn’t surprising to me.

Plus, as many people have pointed out: the experience at a limited-capacity game with no tailgating isn’t going to be what a lot of fans want to spend their money on either.

Where we have to pay attention is combining all of these things to get a more comprehensive view of the situation.

At this point, any one piece of data may or may not be meaningful.

We have plenty of ethnographic data from around the internet that has people telling us what they are doing or why they are going to do what they do, but we only have a little bit of information on what they are doing.

What we can see clear is they are have turned away from sports programming at a pretty substantial rate.

This may be partly due to the abundance of choice. But across the board, TV viewership is down this year.

We’ve also seen ratings for the major sports lowering over the last few years in most cases with bounces here and there.

Numbers 4 and 5 below are about rethinking your business model from different angles and I guess rethinking your business is in the air right now.

When you combine everything from non-sell-outs in limited capacity stadiums, declines in TV ratings, changing consumer habits due to the pandemic, and trends of decline in real attendance over the last few years, you have to look at the mechanisms in place to drive demand and convert attention into action through purchase, watching, and attending.

In many cases, the NFL does the best job of getting attention.

That’s reflected in their numbers, no doubt.

But where are we weak and where can we do better?

First, I think we have to work a lot harder at that top of funnel attention-grabbing move.

I wrote about the tag that the NFL has been attaching to promos for Love Island and Big Brother. Those are great ways to drive awareness and attention to the NFL and are likely to hit an audience that may not have as strong of a connection to the daily news coming from the NFL.

I am not sure that I’ve seen any other league do anything similar or not that I have recognized.

So…even if they are doing it, we have to wonder about saturation and impact since I’m likely the target market and I’m likely paying attention.

Second, we need to look at the value ladder for selling to sports fans.

What can we offer them now that creates value for them and us?

I love the Man City Cityzens program, the One Hotspur program, and the Melbourne FC program. All of them have digital memberships and international memberships to get my money, keep me engaged, and allow them to market to me in a personalized and contextual manner.

Are you doing anything similar in your organization?

This might look like creating a fan club or membership, having a special experience with a player, and moving people up to season tickets or packages. In the next few days, I’m going to post a podcast with Colin Lewis that talks about sports business as a platform business in detail.

Finally, there needs to be expanded experimentation in engagement strategies and presentation of the games.

The NBA has digital fans.

MLB has cut-outs and a lot of clubs are sending balls to their fans when their cut out gets hit or a ball falls near their seat.

We also have seen MLB experiment with their game presentation and how their rules are playing out.

Getting cheeky with the way you engage your fans and present the game can help with the top of the funnel stuff and drive folks through the funnel to watch or buy something from you, even now.

3. Everyone is taking on debt and that’s going to have consequences at some point:

I’ve been learning a lot about finance lately.

Not because it is a particular point of interest but because every week it seems like another team or league is taking on debt to finance operations or stabilize their organization during the pandemic.

I know in the past few months I’ve written about the stability that the AFL was afforded due to owning Marvel Stadium. I’ve mentioned Serie A looking at private equity investment. The Super League has looked at the possibility of taking private equity investment as well.

This week, the news hit the NRL as they have to make cuts and deal with about a $130 M hole in their budget.

I’m torn on the private equity money because I come from a small business background where my family business grew based on reinvesting profits into the business and I’ve always been involved in businesses that were able to rise and fall built on their profits.

But PE does a few things well like inject lots of cash, management can be pretty involved and give you insights, and they have skin in the game so that can help make them partners in the efforts to succeed.

At the same time, I worry about the downsides of PE like if the values of the business and the investors don’t align.

We can also see many cases where ownership is diluted and the investors end up with too much control and they act in a manner that is harmful to the overall business.

In this situation, folks are struggling and have no clue when things will end. So I get the need to look at all possibilities.

For me, I’m not worried about the money in the short term. I am worried about the long-term when the pandemic passes. The need to pay back these investments may be the cause of more short-term actions that hurt the ability of teams and leagues to recover from the pandemic.

Again, I’m a marketer and not a financier.

But I do worry about the ability of teams and leagues to generate the revenues to cover the costs of this debt.

(I could have used examples from college football, the NFL, MLB, and the NBA as well.)

4. Rethinking business models should be on everyone’s mind:

The folks at We Will Recover have put together a new series of expert interviews with global leaders in the live entertainment industry.

Aubrey Bergauer is a friend of the newsletter and the podcast and y’all know I love her. So don’t listen to me, listen to her when she says, “rethinking” your business is essential to relaunching successfully.

We are seeing organizations around the world grapple with this challenge right now.

College sports have been in the limelight a lot lately because we’ve seen stories about the instability of the college business model.

We all recognize that this is driving the need to push players to come back and play football and basketball.

The term I like most in the FOS article is “Administrative Bloat”.

Professor Scott Galloway talks a lot about the untenable business model of colleges and how all of these fixed costs, tenure, and established business lines have just become things hindering schools’ ability to fulfill their mission.

In a general sense, we are seeing a similar scenario play out in college athletics.

The coaches and administrators have been getting paid extremely well while the attendance has been slipping and the staff has been paid less and less to do more and more.

This was never sustainable.

Now we are in a spot where the entire business of college sports could collapse under bloat and poor contingency planning. The whole business model needs rethinking.

I’ll cover this much more in my sprint, but here are some ideas on rethinking your business to help no matter what:

Get customer-focused, fast!

Most organizations say they value their customers and have their customers at the center of their experience.

Putting the customer first is more than just saying, “Our Fans Are Important.” You have to look at your business through the eyes of your customer and see the business the way someone that isn’t working in it every day sees it and designing the experience from that POV.

You want to know rule number one of being a sports marketer: YOU ARE NOT YOUR MARKET!

As a bonus, customer-focused businesses make more money and have more loyalty.

Just so you are aware, almost all…over 80% of the businesses that I look at in sports, theatres, and entertainment are sales driven. Meaning they’ve created what they are going to sell and are now searching for an audience to sell to. Instead of looking at the people that like their products and services already and finding stuff and experiences that they can sell to their customers.

This sales-focused revenue model has led to expensive sales teams that are having less and less success on the phones and declining attendance that hasn’t translated to falling revenues because consolidators, brokers, and corporate ticket-buying habits haven’t shifted to fit the new reality of the market in most cases…yet!

Look for ways to reorient your value proposition to your fans.

What I mean is make yourself as much of a need as a want right now.

The data shows that around 75% of Americans are struggling or seriously worried about the state of the economy. That is impacting what they are buying and what they think they want to buy.

To take this a step further, 95% of Americans are not going to make a luxury purchase and 92% are not going to make any major purchases. This is pretty consistent around the world as 93% of Australians are looking to cut back on non-essential purchases to save money for a downturn they expect to last 2 years or so. France shares a similar point of view as its citizens have added an extra 100 billion Euros in savings during the pandemic to offset their fears of prolonged economic uncertainty. Finally, in Britain most people are prepared for a longer slowdown in the economy, coupled with 71% of British citizens admitting they’ve changed their shopping habits due to the pandemic.

So reframe your conversations with your customer base now to focus on what they need about your matches, events, or performances. It may be tough, but to try and go about business anywhere close to normal is likely going to be difficult.

I’ve talked with a few people in Minor League Baseball organizations and the ones that have had value-based conversations, focused on relationships, and been consistent have been able to generate sales and keep revenue coming into their organizations.

Finally, you have to be consistent about marketing right now.

If your whole business is built around having fans in your seats, you might want to pause on this, but if you have other revenue streams…have a go at some advertising.

The numbers are pretty clear that there is a bounce factor for businesses that continue to advertise in a recession. The numbers for previous crises like 2008 may not be relevant, but what we see is that you get a significant bump in your ad spend’s power of around 25% minimum because there are fewer ads in the market, you get more ads for the same money, and this impact typically lasts for several years after the downturn passes. That’s been the case in the downturns over the last 100 years. The exact numbers might vary a little, but the average is pretty great.

As an example, in the depths of the Great Recession, Amazon grew its business by 28%. This was before Amazon becoming a business that seemed to dominate people’s lives.

As we’ve seen preliminary data from the pandemic, Amazon has seen its profits double this year.

The key point here is that as you are looking at what you are going to do with your budgets or your venues in the next few months, rethinking your business model is likely the key to your ability to relaunch successfully and the first part of the process is to get customer-focused and draw attention to yourself.

5. Theatres and other organizations are going to have to continue to rethink their business models:

There are a few reasons I am sharing this piece.

One, I live in DC and I support the efforts for DC to gain statehood and to have the same rights as other American citizens.

We pay more taxes than a lot of folks, so I want to be able to yell at my representatives in Congress the same as everyone else!

Second, when I did my podcast with Mark Fowlie from Audience View, we talked about business models.

When I follow Zoe Scaman’s work on her newsletter and Twitter feed, she’s presenting great ideas around business models.

And, most of my thinking comes down to how to grow an audience, keep them engaged, and grow revenues due to the value we create for others.

This story is interesting because it highlights how Arena Stage is working to create art right now and engage with their audience in a way that is timely and reflects the moment we are in.

Along the same lines, this story about the Black Girl Hockey Club highlights an issue that is very important to me, growing the overall number of fans of sports and entertainment.

These stories all share a common theme: changing the way we do business.

In Dallas at INTIX, I got snippy with someone that said, “We are limited in the ways we can do business or generate revenue.” I’ve got an entire career of examples that show that the only limits to your ability to add value, sell your product, and make money is your creativity.

That’s why I’m a big fan of these ideas here.

First, for organizations and businesses around live entertainment, there isn’t a magic bullet that is going to rescue any of us.

So we are all going to have to work hard at rethinking our value proposition, our orientation towards value through the eyes of our customer base, and, ultimately, get a lot more creative in how we package our offerings.

Second, there have been a lot of conversations about streaming or giving away free things as bad for business.

I’ve seen little to no data that validates that assumption.

Using my own experience, I’ve been doing a podcast for two years and doing this newsletter for a year and giving them away to my audience with no expectation. But I’ve had more business opportunities come out of those two things than almost anything else I’ve done since I started my consulting career back in 2007.

So we have to get more comfortable with using the assets we have to feed people into the top of the sales funnel.

There is this belief that a digital version of a performance doesn’t show things in the best light.

I don’t know whether or not this even matters.

What I hope comes out of the digital experience is you offer your fans some value and you seed the desire for them to come out to see you and visit you when they can come back to your events.

At the risk of overcomplicating things, look for ways to give value to your audience now…even if you can’t monetize everything. Or, find ways to add value to your audience in a way that will enable you to generate revenue.

Do both!

Finally, innovation should always be the name of the game.

As I round out this first year of the newsletter, I think y’all may have picked up on my love of Peter Drucker and his writing on management and business.

He said something that has stuck with me and drives me all the time, “Businesses have two jobs: marketing and innovation.”

What these examples show is that marketing and innovation matter, they are intertwined, and they are essential to survival now and growth in the future!

And, as a final word today…marketing isn’t just one thing in your business, it is everything.

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Zach Yaqub interviewed me for his podcast and posted the audio on ‘The Business of Fun’ stream.

New episodes with Aaron Knape coming up. We talk about revenue, technology, and innovation.

Check out my friends at Booking Protect! They have partnered with We Are Wellbeing on helping your team with their mental health and wellness during the pandemic. Also, refund protection!

I mentioned them at the top, but check out We Will Recover and the folks at Activity Stream.

Make sure you join me for The Seat Selling Sprint starting on October 28th for a 3-week sprint to help you build the strategy that will get you back on your feet, selling seats, and focusing on the future.

We will cover value, budgeting, marketing, and more! 5 live sessions and 2 live Q&As and a lot more!

Finally, thanks again! Happy Birthday to the newsletter!