Teams Cannot Ignore Digital Sales Channels Anymore
There are now 40 Madison Square Garden sales staff who are unemployed because they recognized something that the industry refuses to: That digital sales channels can trump useless, 100-phone-calls per rep metrics.
According to The New York Post, The MSG staff purchased the cheapest tickets available from the Knicks and Rangers, at face value, and were able to flip it on secondary market digital channels at a 61 percent mark-up. And while they violated staff policy in doing so, they also proved how behind the times most of team sales strategies are.
While their actions were wrong to violate company policy, it also says something about the lack of aptitude toward innovation at the top levels of each franchise. That even the young professionals at the bottom of the franchise recognize that the standard sales practices of a telemarketing sales are useless (1%-10% success ratio, depending on who you ask), and that there is a billion dollar empire awaiting on the secondary market. Yet, the majority of franchise executives don’t want to listen.
The assumption of why they don’t want to listen is always up for debate; They fear that going to a digital sales channel distribution model will end up rendering their own positions within the franchise as useless or without having 100 young sales reps making 100 calls per day, the power that they hold as supervisors diminishes as well.
Yet, the convergence is happening, whether franchise executives at the top of the food pyramid now want to realize it or not.
Some of the arguments lauded against this are that relationship building skills need to be continually fostered with the customer. Great. But what does that have to do with the phone call? Are relationship buildings skills only created through phone calls? If so, that’s got to be a big surprise to Amazon. They generate billions in revenue, and customers swear by their service, yet I cannot recall ever getting a phone call from an Amazon staff member.
Another argument is that the purchasing power of a season ticket is such that it requires someone to be directly contacted through phone. No one buys high end items like that over the Internet. Which must be news to the stock trading sites, as well as mobile banking, and other retail organizations that generating billions in assets being purchased and moved without ever talking to anyone.
Sports staff employment has always existed on the premise of turning and burning 100 ticket sales representatives at an $18k+commission salary structure. Rarely is it about re-investing in those reps, as well as creating it so there is a bidding war for the best entry level graduates out of college. Because there’s never been a need to do that before. But as sports changes, with the digital convergence that is coming, it may be the sports executive who understands programming and social media presence that wins, beyond all else, in order to sell the seat inventory assets that the franchise has to offer.
The 40 MSG employees are unemployed for exploiting something that their own company refused to recognize as a financial opportunity. At a 61 percent profit margin. So, which end is worse? The employee who can purchase the product at asking price from their own company, yet flip it for higher by utilizing a sales channel that the franchise refuses to turn to? Or the franchise that refuses to learn from the employees, and ignores the 61 profit margin sitting there, in order to embrace an older technology that is less frequently used, daily.