Thanks for coming along for the ride today and every week! I appreciate you letting me into your inbox.
There is definitely a theme this week and it is strategy before tactics and what that looks like in the context of marketing and selling live events.
How’s everyone holding up?
If you need someone to talk with, let me know.
Check out Happy Hour tonight with me, Ken Troupe, and Matt Wolff.
If you haven’t had a chance to guess the get-in yet, there is still time: the Super Bowl is Sunday and I’ve partnered with TicketIQ to let you guess and win!
2 prizes and bragging rights!
To the tickets!
Sam puts together a nice piece about the need to rethink the value you offer, the way you ask or position your donations, technology, promotions, and more.
He does a great job of putting together a list of ideas that folks should have been thinking about before the pandemic. And, these ideas are more important than ever, no matter what part of the industry you are in.
What he is really talking about is: strategy before tactics!
This is the most important thing I teach in my workshops, talks, writing, and consulting: strategy first, tactics second.
Your strategy is a map that lets you pick a destination and a path to get to that destination.
Your tactics, deliver.
That’s the point of #KeepVATat5. Right now, the recovery isn’t even started and you are already trying to pull back tools for recovery!?
Andrew Recinos from Tessitura does a good job of summing up the lessons he learned as he prepared to take over Tessitura.
They also point to the idea: strategy before tactics!
But what does all of this mean?
For a few weeks, I’ve been talking a lot about Market Orientation, the foundation of marketing strategy. The idea that to be a successful marketer, you must get the voice of the customer into your business.
Out of Market Orientation flow the big keys of strategy: research, segmentation, targeting, positioning, goals, funnels, etc.
Primary and secondary research in the forms of surveys, focus groups, conversations, and ethnography are cheaper than you think and worth every penny!
AudienceView has been doing a great job of researching the market for theatre and sports. Check out their work!
Segmentation is building off of that research to draw a picture of the market based on how people.
Just to make this point again: proper segmentation is done built on behavior. Trust what people do, not what they say or, worse, when they were born!
Targeting is about choice.
And, choice is at the heart of strategy: Where will you compete? How will you win?
Positioning is the articulation of your strategy in a way that clearly lays out why your customer should pick you over other options.
Out of this work comes your strategic plan: the goals, sales funnels, all of it.
That leads into the 4 Ps: product, price, place, and promotion.
To get your organization focused on recovery: strategy first, tactics second.
Gather around, I have a story for you.
I’ve been tracking the ticket prices for the Super Bowl this week and the story has been “meh”!
When I do work with team clients, one of the things that they often like to talk about is how well I know the B2B market.
I talk to folks!
So the lack of interest in the market wasn’t shocking to me because corporate buyers were telling me before the pandemic that they were considering shifting their ticket-buying habits to other areas, the pandemic accelerated that, and with the pandemic raging in Florida corporate buyers can’t go…company policies won’t allow it in most cases.
What is interesting here is the story that this highlights, a trend in tickets and points us to one of the 4 Ps I promised to talk about: Product.
There are three stages to product creation:
The core benefit
The actual product
The augmented product
In viewing the Super Bowl or any event, start with the core benefit. In the case of a Super Bowl, it could be a bucket list item, or seeing your team win for the first time ever, or taking a family member or client to experience something like this.
Whatever it is, the core benefit is often something besides the actual product.
I’ve talked about how I sold millions of dollars of tickets a year without ever selling a ticket because I knew the customer’s real needs.
The actual product is the ticket!
Without the core benefit and the augmented product, the actual product may or may not be worth much.
The augmented product is everything around the actual product.
Let’s use me as an example to illustrate this:
Talking Tickets is a newsletter, it is the actual product that shows up.
The core benefit is, I hope, you are smarter after we’ve spent 10-15 minutes together each week.
The augmented product is my website, my social media feeds, me replying to your emails, the Slack Channel, the network, and all the other touchpoints that are built around the newsletter.
The newsletter itself may be great, may not. But the value comes in the entire experience. (That’s also one of the reasons I was measuring the NPS score because I learned all kinds of stuff about why y’all read, what y’all like, and how I can extend the value.)
In the case of the Super Bowl, you see the product is the ticket and the game. In this year’s context, the core benefit is being in Tampa for the game when there are very few games or events that are allowing fans right now. The augmented product is everything that goes on around the Super Bowl like the parties, concerts, NFL experience, and more. And, since none of that is really happening in Tampa, the package isn’t as strong.
All of it matters.
So what the Super Bowl is showing us again is that as you are making decisions about how to market and sell your events and your tickets, the ticket alone isn’t everything. It is the entire product made of the benefit, the core product, and the augmented product that matter.
Recognizing that and working to tighten that up is key to making certain that you set yourself up for success going forward just like Jujamcyn with their partnership with SeatGeek.
Don’t you love it when the week’s stories line up so nicely for my rants?
This story is about a merger and it is about a relationship that had soured between the government and a private company. But it is also about distribution and that means the P for Place!
(I wrote about Viagogo earlier in the week a bit more than I am going to here. And, it is good to point out to new readers that the secondary market in the States is entirely different than the secondary market in the rest of the world.)
Before the pandemic, people would tell me some variation of “your ticket has to be everywhere”. And, to that, I say, “Bull!”
Here’s where the distribution cart has driven the strategy horse in too many instances.
To understand distribution, you have to start with the customer and work backward.
Your channels of distribution should flow directly out of the understanding you have of your customer. This knowledge allows you to understand what direct and indirect channels make the most sense.
Direct and indirect distribution:
Direct: fast, possibly real-time, often cheaper, can eliminate competition, and you know you have all the data.
Indirect: can take longer, usually have costs involved, there may be competition for your product within a seller, and you don’t always get all the data.
Before you say, “duh” and hit unsubscribe, I’m spelling this out because we have to keep in mind core competencies and where we are good and where we aren’t.
Going forward into the next phase of the business of tickets and live entertainment, it is important to recognize what we do well and what we do poorly because there are tremendous opportunity costs by continuing to do things poorly.
As the efficiency of the traditional inside sales model continues to wane, we are going to have to ask if that is something we are good at. We are going to have to muster the courage to improve on the email and online sales processes to ensure that we are maximizing the sales opportunities to folks when they are shopping on their computers or mobile devices.
And, as we look at whether or not to partner with the secondary market, we are going to have to think through where those indirect distribution points take us.
There isn’t a one size fits all distribution strategy for every concert, team, or organization. This is one of the many reasons that I love what Pearl Jam does with the Ten Club so much. They don’t do what’s right for everyone. They do what is right for Pearl Jam and Pearl Jam’s fans.
That’s an important thing to keep in mind.
We have to know our customers and design a path for them. Because each market and customer base is different.
Back to the Viagogo and StubHub merger, the battle that is being waged around the world with the secondary market is about distribution, pricing I’ll hit more in a moment.
But distribution is at the heart of this merger and by limiting the ability of Viagogo and StubHub to merge, the CMA is making a statement about giving the consumer choice and competition in where they can buy tickets.
Sure, there are other things. But the key is that one of the biggest aspects on display in this attempted merger is distribution and the ability to consolidate the places that people can go to buy tickets…and to the CMA, that is one reason to slow this merger down.
You got it!
The pricing P!
As I said, all week long I’ve been tracking the Super Bowl ticket market, the Daytona 500 market, and a few other things all for the point of being able to talk about price and value!
A strange aside is that somewhere along the line I became a go-to person on pricing in tickets globally due to some stuff I wrote and did on discounts. Even more fun is to find out that the articles on price have been translated into 7 languages and are taught in major business schools!
I keep coming back to pricing because it is the most important decision you can make in your business.
Because it is the point in your relationship with the customer where you capture some of that value that you’ve created.
I’m going to try and condense a full-day or two of learning on pricing into a few paragraphs. So forgive me if I don’t get to everything!
Most pricing is done like sticking your finger in the air to see which way the wind blows because pricing is hard.
Let me share the three main pricing ideas I want you to know:
There is Cost Plus Pricing where you take COGS (Cost of Goods) and add a percentage. It sucks because it kills market orientation, ignores segmentation, leaves money on the table, and actually never includes all of your costs because you neglect to account for a lot of expenditures.
But it is easy!
I work a lot with value-based pricing. It gets you closer to the true economic value, works on perception, and is focused on the market and your segmentation.
There’s dynamic pricing where the price can move up and down built on a complex set of algorithms and other factors. It works best in areas where the products are perishable like tickets.
The downsides of dynamic pricing are that it isn’t very effective if you haven’t built demand, to begin with. It isn’t very helpful if it doesn’t fit your strategy. And, it can go wrong if you take out the human element and let the algorithm do all the work.
In my experience, businesses around the world have a tendency to underprice. In the world of tickets, I’ve learned that businesses have a tendency to overprice.
A lack of understanding of perceived value.
When I work with businesses on pricing, I work really hard to do a combination of these pricing methods using research, experimentation, and making trade-offs.
How does this work?
First, we usually do look at data, we have some conversations with customers, then we do some research with a pretty simple pricing method called the Van Westendorf Pricing Model.
Then we set pricing according to our research, our experience, and a big dose of curiosity.
Because the price decision is so important. I’ll share two stats that show the power of getting the price right and not discounting because y’all know how I feel about discounts. In case you don’t: discounts are a sugar high that set your brand on a collision course of bad decisions and brand destruction, not to mention pissing away profits.
For every 1% increase in price, you gain 12% in profits.
For every 1% you discount, you lose 40% in profits.
This is why price matters so much. It is where the profits are.
Back to ticket prices.
In my experience, I’ve found that bad pricing decisions happen due to unclear strategies or strategies that need to be revisited.
In tickets, the challenge of pricing is greater because for far too long folks have decided that if all else fails, we can paper the house or discount with no consequences.
The tools that folks have to work with now are amazing, but they do need some context:
Do some research.
Make sure your pricing decisions fit into your strategy and don’t try to back your strategy into the pricing decisions.
Keep the human element involved. There is no set it and forget it in pricing.
Once we can sell tickets normally again, we have to get the pricing discussion fixed because the competition will be enormous. We will also be facing changing buying habits, economic issues, and some psychological impact as well.
So just pricing a ticket without any sort of data or structure wasn’t wise before the pandemic, but going forward it isn’t just unwise…it is dangerous.
When I spoke at the AFL’s Fan Day back in 2019, Oli Shawyer quizzed me on AFL terms and names to get a few laughs. I’m good humored so it went over well and people came up to me the rest of the day laughing at my answers to some of Oli’s questions.
One of the names I butchered was Geelong.
But I did learn to use “numpty” and “ripper” correctly!
But, back to the story, and the promotion P.
Promotion includes all the ways you get your message out into the world like advertising, social media, trade shows, sales promotions, etc.
For the past decade, it seems that we’ve seen the power of marketing eroded and changed to really mean: promotions or in the terms of business schools: Integrated Communications.
Communications and promotions are only a small part of marketing, important, but still a relatively minor aspect of what marketing truly is.
This trend to look at marketing only as communications hurts us because it makes our communications less effective because they aren’t attached to a strategy so they aren’t often focused on some SMART objectives or goals.
It also helps push the idea that marketing is a luxury, and costs us money, not the home of profit which is marketing’s real job.
What Geelong and Ford have done is pretty great. 100 years of partnering tells us a lot about promotion!
A short explanation: Les Binet and Peter Field did some really great research in the UK on long-term brand building versus short term activation and what they found was that you shouldn’t pick one or the other, but both.
The breakdown is about 60-40, long to short.
The key is that you have to invest in some brand building to ensure that you maximize the impact of your short-term activations. I won’t bore you with the entire research but in the first year, you’d make more money just doing short-term advertising, but if you do both by the third year you’ll start with a base of sales that is double what you’d get from doing short-term alone and the benefits will continue to compound.
That’s what lies at the heart of the Ford and Geelong deal…a long-term partnership that fuels short-term activation. In the piece, Ford’s CEO of the region talks about how the relationship has seen them from the Model T to today and through many championships.
At a certain level, they have a brand partnership that highlights the success of both brands.
It doesn’t always work this way as we’ve seen with short-lived naming rights deals for stadiums, but it highlights a key idea that we need to get comfortable with “media neutrality”.
Media Neutrality is the idea that you don’t start out with a determination of needing to use a certain media, you pick the media that is right for your strategy.
As you are looking to enter or reach new markets, create new opportunities, or communicate a new message, you need to revisit your strategy. Go through the process of STP and work through the 4 Ps.
I keep a list on my desk with over 125 different ways that I can share my message or my promotion. I’ve been adding to the list for years. The key is that when it comes to promotion, there isn’t a one-size-fits-all approach.
The same as with all of this stuff, as we move through the pandemic: strategy before tactics, get the marketing mix right for your business, and know that there is not a one-size-fits-all approach that is going to be successful for everyone.
Full newsletter rant over!
No matter where you are in the world or what part of the industry you find yourself in, this stuff matters, now more than ever.
P.S. While I’m dreaming of Australia, it was Women In Sports Day this week and I’ve been fortunate enough to have some really awesome women partner with me, give me opportunities, and to be my friends over the years.
Support women, minorities, and people that aren’t always at the top of the list of your thinking because it is the right thing to do, full.
But it is also great business as we see again with more sell-outs in the AFLW!
I’m still in DC!
As you plan what you want your future product offering to be, consider refund protection as a way to offer your guests a better product. Talk to Cat, Simon, and Cath at Booking Protect!