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Why An 80 Percent Renewal Rate Is Problematic

Every sports franchise season ticket sales cycle ends the same way: The presenting of a renewal rate that hovers around 80-to-90 percent.

And a lot of sports executives seem to applaud that number, as if its a good thing. But think about the ramifications of what the type of renewal rate is telling sports franchise on how its customers feel about their initial purchase. The majority may be fine, but at least 20 percent choose not to invest in the product the following year. That may speak more to the mentality of how the franchise’s reps are selling the product to prospects, and what prospects are not getting out of the product once they decide to purchase it.

Understanding Mathematics In Sport Sales

Put that 20 percent in a different perspective: If a sports franchise has 12,712 season tickets in 2014-15, and there is a high-five amongst executives when not renewing 2,543 season tickets, that’s an issue.

It’s an even greater issue with the amount of games that each franchise is hosting. Say that home schedule for a season ticket is 41 games annually. That means in 2015-16, there will be 104,263 total seats now unfilled (from 2,543 non-renewed 2014-15 season tickets). Even if they aren’t covered with new season tickets, it becomes more a challenge to fill those now-empty seats, even before the other empty seats in the stadium get covered.

Let’s say that franchise executives are going to determine a strategic method of filling those 104,263 with additional group nights. That’s a hell of a group plan. If every group leader is worth an average amount of group tickets, say 350 group tickets per night, that’s 298 new groups that the franchise will have to sell in order to cover the losses. If every group leader is worth an average 700 group tickets, then that’s 149 new groups that need to be cultivated.

Looking At The Sales Staff Mentality

All of this becomes problematic for the entire franchise’s sales staff, whether targeting one or many. Because it denotes that the sports products isn’t worth as much as a long-term buy as franchise executives want to believe. Or, it shows that the sales staff is focusing on entirely the wrong kind of product to sell entirely. And that’s where an 80 percent season ticket renewal on an annual basis comes from.

This isn’t about drilling down to a real issue with a prospect. They have already purchased the sports product, and declined it the next year. It comes down to why the season ticket holder didn’t value what they had as a long-term renewable buy, or whether they were sold the wrong product entirely from the beginning. And it isn’t about calling a season ticket by a different name, such as membership, or having several off-season events in order to retail a 360-mentality with the fan. This is about why the sales staff determined to pitch their product on a fan, rather than the product that the fan would value the highest, thereby renewing for the following season.

The real issue in all of this is how the ticket sales staff is pushing tickets entirely. Are they really looking at the customer’s needs in terms of the right package to sell? Or are they pitching the package that makes the sport franchise and the ticket sales representative the most money? That 20 percent loss for the franchise should be a bellwether for executives on how their ticket sales are selling their product, instead of acting as if renewing 80 percent is something to be happy about.

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