From The Editor's Desk

The Fractured Purchase

Everything is changing in the sport sales space. Even luxury suites. Patrons used to sign 10-year deals in order to gain even the worst suite, now they are being sold as singles, available to the public.

Some of this is a reaction to the demand of customers. Another component is a race to the bottom. While that suite is sold for the hottest games, it goes dark during the worst ones. Think Tuesday nights against the Dallas Stars if you’re in Philadelphia.

Fractured purchasing is something of a discounting nature. The idea that customers do not have to earn a certain milestone in order to accomplish it makes the entire purchase irrelevant. Now, there is nothing to gain by committing to a full luxury suite for an entire year, let alone a half-season plan, specifically because suites are available each day, without the full commitment.

While this may work for some premium seating options, I think it can have a devastating effect on suite sales as a whole. The entire surrounding nature is that of exclusivity. The fact that others cannot gain what the suite holders have in terms of service, territory, etc. without earning the full negotiated price.

Suite and premium are completely different from single game tickets. It is about the environment created around the client, in a high-end fashion. Once that illusion is broken, publicly through advertising, it can harm overall demand for the product. People want to pay for something that other people cannot get. That’s why luxury space survives and thrives.

I was just speaking with a minor league franchise selling corporate and luxury space, who are protecting their price point. They value their product. And yet, their competitors do not. They know so by virtue of their prospective customers, who reveal that their competitors offer super discounted negotiated deals in order to gain luxury or corporate service access. While the minor league franchise sticks to their guns, the reaction from the prospective customer is one of surprise.

If the competitor doesn’t value their price point on their product, why should the minor league team on their product?

The point is that a fractured purchase cannot be amended. Once that goes out into the nexus, it causes a fissure. Now, customers know what they believe your product is worth, at a drastically low price point compared to what you originally wanted to sell it at. Because you were willing to go far below what your original price was. Which makes the discounted, fractured price your actual price.

Here’s what else it does: It creates the notion in your customer’s head that even though they got the product at a severe discount, they did so at potentially a higher price than another customer. Because they cannot trust what you say, since you easily broke that price integrity in their presence. Why wouldn’t you be quick to do it in the presence of another customer later on, for a lower price than what the other customer paid?

This comes back to the idea of letting prospective customers know what potential fractured product deals are out there. With a single suite, to any random customer, it begs the question: Why pay full price of an entire season, if the team is willing to sell it al a carte, for the best games during the year?

Things to consider.

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