I cannot believe the forum is imploding again – and now it is over ticket pricing.
Well I am getting the usual statements of derision from, to quote one in particular, the usual suspects so what from a marketing perspective would you do?
Pricing
Pricing isn’t an isolated department in marketing and if it was it would maximise price and not lower it. To set a reasonable price you would benchmark other competitors in your industry to establish a “list price”
- Look at the average pricing structure in the League
- Look at the concession and children’s offers
- Analyse special offers that clubs may do
- Look at what they charge for on-line bookings and also postage and walk up charges
If you look at the pricing structure of most clubs, like it or not, they have done this as the pricing is almost identical. You would expect newly promoted clubs to have cheaper (they have) and Inner London to be higher (they are)
Again you misunderstand the market we are in. Other clubs are not competing for people in Coventry's cash. What they charge is irrelevant. Our competition are what other people do with their money. "Oh, but everyone else does it" doesn't fly. Football is not a normal business, you won't go and support Villa because the tickets are cheaper. You might decide to take the family out instead though.
What the debate is missing is that customer loyalty is essential and repeat purchase vital for Long Term success. This will in an industry like this have a huge influence on pricing policy and strategy.
Loyalty in football is the season ticket buyer. He pays up front so guarantees revenue and long term commitment so needs to be secured.
In my view the Season Ticket offer is competitive. It meets the criteria set out above. The securing of a large base of loyal customers allows the club to set a competitive individual pricing strategy in that season to attract other customers in the hope that they will then become loyal customers in the future. This is undoubtedly the case with Sheffield United who have a very high percentage of Season Ticket holders. This is why they have offered a lower price for one stand. It is not to do with an acknowledgement of a lower demographic or an urgency to generate short term revenue. It’s the opposite; it’s to secure a long term commitment next season and at a higher rate than CCFC.
Coventry has a problem in that it has a very competitive offering for the season but a lower take up of the offer so it relies now on attracting the floating fan on a more permanent basis.
Personally I would focus on this aspect as a priority and offer a reduced offer of a season ticket purchase until the end of September with reductions match by match. I would also look to offer a 3 year ticket with a 20% reduction off annual prices and an offer of free cup tickets as part of the deal up to a specified round. I would also look at working with ACL to offer season tickets with reduced parking prices to be used in conjunction. All promotes loyalty.
You're right that STs should be the focus, however you don't address the core problem with them: the up front investment. Like it or not, people don't find it easy to part with that much money up front. If there were no mobile phone subsidies, only very few would buy a smartphone because of the prohibitive cost. The monthly pay deal is vital, we need to be lowering the barriers to entry, not raising them. A 3 year season ticket may be great, but in reality the only people who would take it up are the hard core faithful who would probably buy it anyway.
Lowering prices is panacea to the sales department as it makes life so much easier. Sales people will always site “the markets on its arse” so lower prices. Good or bad? Well the marketing slogan is Fixed is good and Variable is bad. Why?
- It suggests an inferior product (you would expect smaller clubs to use the strategy)
- It reduces revenue unless the numbers exceed prior revenue (very unlikely unless the original strategy was hopelessly miscalculated)
- It does not always work and does not increase revenue (disaster)
- Importantly it’s very hard to extract yourself from and sets an expectancy for a long time to come even if the product offering improves
- It doesn’t secure loyalty (purchase of a season ticket) actually it endangers loyalty as it rewards short termism over loyalty
All of this only applies to short term, random ticket offers which are limited by the FL anyway. It doesn't address overall pricing strategy.
Possible Alternatives
The pricing structure once announced should not be reduced – lower prices equals’ distress and as stated does not encourage loyalty. So on an match by match basis look at alternatives; - Statement of fact without evidence. There's evidence all over this forum that ST holders couldn't give a shiny shit how much matchday tickets cost. Look at our actual competitors (bowling, cinema, theme parks, zoos) and you'll find that frequent price promotions are common. Virtually no-one pays full price at Alton Towers. Variable pricing is not only common in our industry, it's vital for addressing the issues we are currently facing.
- Loyalty on a medium term – package “unpopular matches” together and give a very good offer on five match deals with an inducement to purchase a further package on completion - Good idea.
- Family tickets – Important to have loyal family groups. So if two adults attend certain games allow up to two of their children under 12 to go with them for free
- Special promotions (Food and Drink vouchers and reduced car parking rates) at specified games - I think this could be done better, I don't think cheap food and drink will get people in, but player meet and greets, or legends day, or flag day or whatever might.
- Membership scheme. We have one apparently as do over 50% of clubs in the league. Is it well advertised and is it a competitive offer? Decide a rate and offer significant discounts on match tickers and a free JPT or F A Cup round 1 ticket.
Summary
- Focus most attention on the season ticket percentage – this is unacceptably low and the main issue
- Do not randomly slash prices – distressful and ultimately damaging to consumer loyalty, the brand and profitability.
- Promote targeted packaged offers with genuine appeal
- Make sure the awareness is there via fixed marketing. Awareness is vital.
Some not bad ideas in there G, but you are making the mistake of treating the entertainment industry the same as other industries, and the football industry like any other business.
Customers are far less rational when it comes to entertainment and football in particular that you are accounting for. The customers are weird in that many will happily pay more to see the business succeed. It's far more brand management than anything else. The fans have to feel part of the club, like they're valued. You also need to recognise that you can't really expand your market much beyond the local borders, you're fighting for a fixed pool of customers, and in our case a pool of not particularly wealthy ones. It's mostly C2DEs in this area, especially as ABs tend to move out of Coventry, or have moved here from work.
You also ignore that the fans are only part of the equation in football finance. A large crowd can draw in other revenue and can increase the chances of higher quality football, even if they don't bring in lots of cash. The crowd in an investment you make as much as a cash cow. Keeping ticket prices high is the same as instituting a wage cap: you can cut costs but you also risk cutting success on the pitch (which is kind of the club's primary purpose).
We can argue all day about the pricing, but when you've got customers consistently stating it as an issue, it's probably time to look at it. Personally, I think the loss of the monthly pay option for STs has had the biggest impact as it's a barrier to people making the impulse purchase for the season, and needs to be addressed ASAP. The normal matchday pricing could be priced a bit smarter (instead of just above £20, just below would make a world of difference and probably not cost the club), but overall I'd guess the product has more impact of walk up sales than the price.
One other point, you've not mentioned is the product itself. Match days currently rely 100% on the quality of the game to make people want to go. I think a lot more could be done to improve the match day experience. Get people there earlier, make them leave later, make them spend more money, get the kids nagging to come back. The club needs to look at the whole day as their product, not just the 105 minutes after 3pm. Connect with pubs and clubs, put on things for kids while Dad is watching the game, get players out meeting fans, whatever. The product on the pitch is virtually impossible to control from week to week, so reduce it's importance in the day, focus on the things you can improve.
The real strength a football club has is it's history and it's ability to make people feel special. Running out at the Ricoh costs the club nothing, but is a massive prize for some fans, similarly meeting players or touring the ground, or taking part in training, whatever. The club doesn't leverage this at all, instead just hoping that the product on the pitch will turn the corner and do the advertising for them. Most businesses would kill to be in that position with it's customers, we take it for granted.
tl;dr: focus on the match day experience to improve crowds, but make the barrier to entry lower for the loyal and be smart about price points, don't pick on just over a round number.