CRM Scores Big with Sports Franchises
The Pittsburgh Pirates, the Arizona Diamondbacks, the San Diego Padres, the Phoenix Suns, and the Carolina Hurricanes all say their teams have a secret weapon for winning: customer relationship management.
Speaking earlier this week at the third annual "Revenue Generation & CRM for Franchises and Facilities" conference in Scottsdale, AZ, representatives from professional and college sports franchises said that knowing your customers translates into revenue and winning--at least at the box office.
Talk about interleague play. Sales, marketing, and ticketing executives from the National Basketball Association, the National Hockey League, Major League Baseball, and leading college athletic programs gathered at the conference to share CRM ideas and success stories--everything from how to increase fan loyalty and collect detailed fan demographics, to maximizing long-term ticket value.
Having a winning season always boosts ticket sales, but most attendees concur that it takes more than a winning record to keep filling the stands when the performance of the team less than stellar.
"Value like beauty is in the eye of the beholder," says Ray Artigue, senior vice president of marketing for the Phoenix Suns. "In these tough times its takes more than a tchotchke or promotion to gain fan loyalty."
Most of the attendees were more than willing to share their CRM secrets, because these other sports franchises are not really their rivals for fan dollars. In fact, most cited television, movies, dining out, theater, and other forms of entertainment as the biggest competition for filling the stands.
"CRM helps even out the highs and lows," Steven Hank, CRM development director at Arizona State University says. ASU's CRM program, called the Devil's Domain (after the school's Sun Devil mascot), includes a Web site, a rewards program, screensavers with customized messages, discounts at the team store, discounts on future ticket purchases, and coupons for free food and beverages.
The San Diego Padres were among the first professional teams to implement a CRM program and was the first to start a fan-loyalty rewards program, in 1995. Since that time attendance has never dipped below 2 million per year, according to Brook Govan, manager of fan programs and new ballpark technology for the Padres. In addition, the Padres have seen the average number of games attended by loyal fans increase to 10.7 per season in 2002, up from 6.5 in 1995.
Through its reward program, which gives fans a card to swipe at stadium kiosks, fans earn discounts on future tickets, food and beverages and items from the team store. Discounts are dependent on points accumulated by game attendance and making specific purchases. In return, the Padres are able to get detailed demographic information about fans and to track spending habits at the game. As a result, the organization says it is able to deliver a more enjoyable fan experience, while increasing its revenue.
The Padres database has approximately 185,000 members. Via its data collection the Padres also found that a huge percentage of its 681,000 strong fan base, many are just over the border in Mexico. The Padres now offer a special reward card for residents of Mexico, and target Hispanic fans on both sides of the border with radio and television campaigns.
"We had no idea about any of this before me started this CRM effort," says Govan, who adds that on average, the Padres get a 6 percent return for each email campaign they offer, which is twice what the team experienced using direct mail.
While CRM is helping to increase revenue, John Walker, vice president of business development for the Phoenix Suns, says that many of the efforts actually begin strictly as a service to fans. This year, the Phoenix Suns began allowing its ticket holders to resell tickets via the Sun's Web site.
"This is part of a larger customer service effort," Walker says. "If you think that fans are not going to be standing outside the box office trying to get rid of tickets for a Monday or Tuesday night game, you're wrong. They are going to do it, so why not make it easier for them." The Suns' Artigue avers it's also another way to draw Suns fans to the Web site, where the team sold 60 percent of all its minipackage plans in 2003.
Although CRM efforts and implementations vary from team to team, everyone agreed that CRM needs to be treated a key strategy in every team's playbook.