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Tweet Exchange: Discounting Means Devaluing

I exchanged some tweets over the past few days, thought they were interesting enough to comment on. While the tweeter has his opinions, I can also have mine. But in this case, I definitely think that mine win out.

Discounting your ticket price means devaluing the overall product. Make no mistake about what that means.

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First, this is spoken from a person who is not selling the actual product. This is from the belief that people will magically appear the second you win. So, in theory, all teams that do not win should have lower-priced or free tickets to satisfy “true” fans until they do win. Wow, what a way NOT to run a business (which sports franchises are). People often forget that there is a backbone component to the industry behind the actual team on the floor. That means, the teams have to charge enough to support that team as well as generate profits for their owners. Not only that, but if a team traditionally charges less in dour times, then jacks up pricing during glory times, the fans themselves will revolt against a “sudden price hike.”

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Of course, the great marketer idea of the century arises in order to fill seats – you will show “value” in the product by providing the product for free (i.e. comping). I totally disagree. That is a methodology promoted by the “gearhead” – the person totally invested in your product who doesn’t understand why there aren’t more true believers like them. They see everything under the umbrella that if you just “gave away” tickets, everyone would show. That has been proven false by several teams in several markets. In fact, the more often that you provide something for free in availability, the less likely someone is to show for the product since there is no demand to appear (i.e. they’ll give out free tickets next time if I don’t show this time).

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Suddenly, the “cure-all” is winning. This too is a fallacy. Winning doesn’t always generate a fan base overnight. The Tampa Bay Rays are a perfect example of this. Another example is the one that follows: “Location” or “Venue” as an excuse why fans aren’t showing.

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This is where “bad product” gets promoted as another reason. I hope there are some VP of Sales or their account reps reading this: Stop focusing on what happens on the field. Focus on the experience. That means, the exciting which is built up in the stands, not whether the pitcher staff as a top 5 ERA in the league. Focusing on the field only leads to excuses of why a prospect won’t appear at your venue. They are built in excuses. Let me put it another way: Universal Studios didn’t focus on Jurassic Park’s lack of a story or great characters, instead, it focused on actual dinosaurs and the adventure. Its the same thing with sports. Unless you plan to be a general manager in major league sports, you have no ability to control the on-field product. So focus on the part that really matters: the excitement in the arena for all of the promotions or added value possible.

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So, here’s my theory, only about 10-15% of the folks that show up to your venue are diehards. How do I show this theory as credible? Notice what happens when a team puts all of their branding on winning and doesn’t win: They have about 10-15% of their seats filled. Diehards are gravy. They should not be your end-all focus. In fact, they will find you in a snow storm, regardless of what happens on the field, because they are diehards. Its the causal fan who matters. They are the ones who build up from groups to mini-packs, and come for general enjoyment rather than to complain about wins or losses.

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Another theory I have is that low attendance franchises have more ability than those who are of high attendance. Why? Mainly because they can do crazy promotions or other things in order to promote their product. They have no one to offend. Not even the diehards.

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A lot of MiLB stadiums are filled with no-name folks. A lot of the top prospects aren’t know either. Yet, the idea that MiLB’s 160 stadiums draw 46 million annually is only delivered with the rational that fans come because of the top prospects. Not really. Fans in MiLB come because of fireworks, hotdogs, great experience, bobbleheads, crazy promotions, theme nights, and whatever can happen OFF of the field. Rarely do teams that don’t win have as much trouble with attendance in the minors, simply because they sell BEYOND the field product. The “gearhead” cannot handle that type of thinking. Because, frankly, they won’t themselves attend a product which was not all about the top prospects in the league. Yet, the majority of folks going to MiLB games don’t really care who is out on the field, a long as the beer guy gets to their section five times by the sixth inning.

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The whole idea of discounting is not about finding the right price. It’s a panic mode mentality. In fact, it suggests that you didn’t know the right price to charge in the first place. And with the onslaught of the internet, the more frequency that you discount, the less likely that you can ever avoid discounting in the future. Because after a while, the public will expect it.

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There is a fundamental difference between a strategic discount “group sale” and a general discounting the public.

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Note: Gretchen Sheirr is the VP of Ticket Sales at the Houston Rockets.

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Another once again, it comes down to the gearhead fan thinking that they should have prices that reflect their attitude. Notice how the tweet below suggests that one of the top games in the NBA in 2013-14 (Lakers at Houston) will not sell out even with the drama lines of wins, Dwight Howard, Kobe Bryant, without the price dropping to an absurd $20 per upper bowl seat. Those seats would go for close to $80-$90 in some cases. Yet, the gearhead sports fan believes that even in the best of conditions for demand, the price should be lower.

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The gearhead fan believes in a fallacy. The illusion that teams will bend over backwards for diehards at the expense of their larger audience. Frankly, the gearhead loses out if they stay home. They don’t have the sense that their passion is pushing the team to success, they don’t get to wear every jersey and proclaim how they are top of the tribe, so to speak. Which is really why the gearhead gets so passionate about discounting tickets. Its about them. They want more people there to see them, front and center, the person that has always stuck with the team throughout. These gearheads, while good fans, can also be destructive if they have their way of discounting for the masses.

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Have the Leafs won anything since 1967? Very unclear. The Warriors had half a good season in 2012-13, yet had a great amount of sales. Not only is it a good sales staff at Oracle Arena, but one that doesn’t focus on the floor for its added value. Notice that the Golden State Warriors play less than 500 feet from the O.co Stadium (Old Oakland-Alameda County Stadium). It is not an easy neighbor to navigate in downtown Oakland. Yet the “horrible” location doesn’t deter fans to Warrior games. Nor do team wins (they’ve won & lost throughout years but never been a playoff powerhouse). But somehow, they are now used as a lighting rod to suggest that they provide a better atmosphere (i.e. fan experience) that draws fans to the arena (which they are leaving in 2015 for downtown San Francisco). All of this comes back to the idea that focusing on the floor does nothing to draw out folks, neither does discounting (the Warriors don’t discount).

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Well, there’s the tweets back & forth… Let me know your thoughts. I personally feel discounted or free tickets is a long way down a shaft with no escape. It frankly is only told as a solution by folks who have no actual financial vested interest in the team. If it were their money, they wouldn’t give away anything for free.

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