3 Areas of Sports Business That Need Critical Attention

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Just a moment ago, I read an article from the UK that had a term that I love: “missionary zeal“.

Leila Jancovich goes on to talk about missionary zeal as causing the arts organizations in the United Kingdom to be discouraged from making critical comments, pointing out flaws, or learning from mistakes.

In light of the thinking I put into yesterday’s blog post about MLB’s strategic challenges in tackling their attendance issues, the term missionary zeal really struck me because it is this same concept that lies at many of the issues at the heart of some of the ongoing struggles that teams and leagues are facing to drive attendance and grow sustainable revenue outside of television contracts.

As I thought through what these areas of critical concern were, I asked myself where would I start if I were going to rethink some of the business processes in sports business.

Here are the 3 that I would start with:

1. Role of sales and marketing:

I’m going to start where I always start with marketing.

Why?

Because I buy into the Peter Drucker philosophy that all businesses have two jobs: marketing and innovation.

In Drucker’s view, marketing should make sales obsolete.

Having recently bought a Tesla and seeing Tesla’s experiment with closing all of its showrooms, I’m not necessarily willing to go that far in most cases, but there is some wisdom to the idea that you want to have marketing do a lot of the heavy lifting of the sales process.

Right now, that isn’t the case.

In the United States, the sports business sales process is heavily driven, too heavily driven, by the sales staff.

This is problematic for many reasons. Here are just 3:

  1. The ways that many sales staffs are trying to generate demand aren’t keeping up with the way that people buy in the year 2019. Meaning there is far too much of an emphasis on “phone crushing” and not nearly enough emphasis on other forms of prospecting.
  2. Because the tools and ideas driving the way that many sports staffs are selling aren’t keeping up with technology and demand generation, teams are burning through kids at rates that probably hit around 99% in many organizations. This creates a number of problems not least of which you have trained your customers to be even more skeptical of answering the phones, you are constantly shuttling your customers through sales staff making their experience awful, and you are not able to build any sustainable internal organizational knowledge of the community that you are serving.
  3. Due to the way that ticket sales are being largely driven by the sales team, marketing is at a disadvantage and when the marketing department gets a chance to assist in the sales and revenue process, they are coming in behind the 8 ball and having to do things that aren’t in the long term best interests of the organization like heavy discounts, gimmicks, and spamming their mailing lists (if they do that at all).

When I had Ian Taylor on my podcast, he chided me for being too sales focused…and I took his message to heart because his examples show that being wise with the development of marketing assets and a marketing funnel can drive sales quickly, more efficiently, and with great effectiveness.

The truth is that we need both strong sales and strong marketing.

The challenge is how.

Even greater is the challenge of looking at the sales and marketing efforts of sports business critically to come up with some solutions.

Here are 3 ideas for achieving better balance and effectiveness for the modern marketer and seller in a sports organization:

Rethink team marketing:

Man, I’m so let down when I see so much of the marketing that is done around games and teams these days.

Why?

Because while there are some brilliant tactical efforts made using advertising or social media, there is very little strategic work being done.

This hurts the brand of the team.

It hurts the continuity from season to season.

This approach harms revenue.

What can we do about it?

I recently put together a marketing plan for a team and laid out the idea that marketing has to be a 365 day a year thing.

This means that as a team, you have to have 3 key concepts in place:

  1. The objective for your team and your market strategy
  2. Strategy for how you want to achieve your objective
  3. Tactics that will support your strategy

Let me put a little meat on the bone of this:

Your primary objective as a team might be to be a championship caliber organization on and off the field.

Your strategy to support this on the business side might be to use world-class business practices in every area.

Tactically, you will start out by benchmarking your team against the best businesses in the world. Take as an example you might ask:

“How do we do as marketers compared to Apple?”

“How does our service compare to the Four Seasons?”

For the sales and marketing team, this change will likely mean that more emphasis is put on areas that aren’t getting enough attention now like email marketing, targeting, segmentation, and great CTAs (call-to-action).

The goal should always be to make sure that marketing is a profit center and not a cost center.

You can’t get there by going through and doing things the way you have always done them.

You have to be critical in approaching these areas with an eye towards your objectives and long-term goals.

Reimagine the role of the modern sales agent:

Troy Kirby wrote a piece a few years back about the rise of the rock star sales rep.

Troy’s hypothesis is that in the future we are going to see the sales rep that can build a community become the key to successful sales and marketing efforts.

We haven’t necessarily seen his vision come to fruition yet, but his idea is in the ballpark of what I think the industry needs to do.

In reality that we have to do a better job of nurturing sales agents in sports, giving them skills that don’t just make them great sports ticket sellers but great sellers, and look at the failure of a sales agent as an indictment of our leadership ability.

We can do that by spending time focusing on a couple of areas that would reap immediate improvements for most organizations.

  1. Focus on creating opportunities. This will require creativity and business acumen. Not just the ability to phone crush and close.
  2. Using technology as a friend: Salespeople in sports need the ability to have the same sales stacks and tools that other professional sales folks have.
  3. Get back into the relationship business: Minor League Baseball teams have a pretty stable sales team, most of the time. Why? They are in the business of their community and they build relationships. We should lead with relationships.

Build brands again:

The days of “Just Win Baby!” seem to be gone.

I can’t find the article now, but I remember reading about the rebrand of the Atlanta Hawks and how they realized if they stripped away all the Hawks identifiers in their marketing and advertising, they could have been anywhere or anyone.

How true is that for most teams now?

I’d argue it is much too common.

Not to turn this into a marketing and branding session, but the branding of the teams should focus on 3 things:

  1. Give the team a point of view.
  2. Have a sense of place.
  3. Be distinct.

Look at your brand and ask if you are fulfilling those steps.

2. New ideas:

I saw a recruiter post on Twitter something to the effect that teams have to do a better job of bringing in more diversity of talent.

WTF?!

If you are a recruiter, isn’t that your job?

The sentiment, though, is spot on.

Absolutely, positively, a must…new ideas, new talent, and a more diverse variety of backgrounds are an absolute essential going forward.

This point doesn’t really even need belaboring.

But here are 3 reasons why refreshing the talent pool and hiring people from a variety of backgrounds is helpful:

  1. Hiring from outside of sports means that you are going to get a fresh perspective on what is working and not working in other industries.
  2. Bringing in more minorities and women is likely to help you connect with your audience more effectively.
  3. Looking for fresh ideas is likely going to bring you experiences and talent from areas where you didn’t initially get talent from such as kids that come from poor backgrounds and couldn’t afford to start in a minimum wage type job, people that have law degrees or MBAs and were put into the big consulting or law firm life, and many others.

How can this become possible?

Simple:

  1. Set a goal of connecting with experts and professionals outside of your normal circle. In NYC, I used to know lawyers, doctors, accountants, marketers, executives, and politicians. In DC, I know lawyers…so let’s not let that impact my thinking.
  2. Make a concerted effort to talk to “outsiders” during the hiring process. Even if you don’t end up using someone on one job or search, the more ideas you get the better.
  3. Go looking for ideas: read widely, listen to ideas from a variety of industries, and test your assumptions.

3. Get back in the fan-focus business:

Blaming TV for the late start of the World Series, NBA Finals, and other events are easy.

It is also probably right in many ways.

What this highlights isn’t that TV is bad because it isn’t. TV has helped sports reach more people, expose sports to more people, and driven a ton of revenue.

At the same time, the TV audience is often given priority over fans in the stands.

I’d highlight that this often can lead to depressed attendance, but it actually is something else.

Really, to me, it means that over time the experiential aspects of going to a game have been so skewed so far that it is no surprise that fans aren’t going to games at nearly the clip that they have in the past…unless the event is “hot” and that isn’t something you can really plan for.

What does “fan-focused” mean to me?

  1. It respects the fans that you want and need to come into your building.
  2. It creates an incentive for fans to get off the couch to come to the stadium.
  3. It shows real value to people in the ballpark.

I get it, TV money is great and it seems to be endless.

But as Richard Scudamore mentioned in the book, The Club: “an empty stadium makes a poor soundstage for a TV show” when he was talking about the importance of attendance of Premier League matches.

Everyone in sports business needs to have that same sort of thought process.

Because it may be working today, but what happens if it doesn’t work any longer?

It reminds me of the story of the rich man that lost all of his money…

“How did you go broke?”

“Slowly at first. Then, all of a sudden.”

That’s the way I feel about attendance in sports and to me it feels like the canary in the coal mine moment.

The assumption underlying the industry has been that live sports is the only appointment television still available and that sport has been something that has stuck with us for decades.

But we are starting to see whether or not that test holds because on-demand viewing is more and more popular, ratings have been up and down for sports, and people’s connection to team sports has seen dents in its consistency.

What can be done in the short-term?

  1. Make going to a game fun. We always hear about how millennials need a standing room or pop-ups or something but are these things just the sign that the experience isn’t living up to expectations? Think through this and ask how you can make the entire experience of going to a game a lot more fun and engaging…start by checking out Minor League Baseball and then go look at other places that are stealing customers from sports.
  2. Price like you want people to come again and again: Mike Guiffre talks about FOMO in ticket sales killing the ticket market and I tend to agree. Teams are attempting to price like they see tickets listed on StubHub. Two problems there is that the secondary market prices things dynamically and a lot of times these high prices don’t get sold, they are there as a placeholder…like a prayer that someone will just click “buy” and never question the decision. You have to price like you want fans to come more than once like you want them to buy a package and commit. And, you want to price your merchandise and food so that people can buy…look at the Falcons.
  3. Present the games in a better way: This will help the in-stadium viewer and the in-home viewer. The NFL played with cutting out some of their commercial breaks to help game continuity. I know I noticed those ads more than I did any other ads. Look at how sponsors and advertisers are worked into the Premier League broadcasts. These are just two examples, but they aren’t the only two that you can use as a jumping off point for doing a better job presenting the game in hopes that it helps viewers no matter where they are watching.

Again, this isn’t comprehensive and I think I could go on for months on ways to improve revenue, drive better business practices, and continue to grow sports business.

But if I can only make one takeaway, it would be to stop going all rainbows and puppies on anything related to the business side of sports and start critically asking yourself the question:

“Am I achieving the results that I need to achieve?”

If you answer, “no.”

Ask yourself why not and how you can create some positive change in your organization.

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You’ll also want to check out my podcast. This is the number 1 podcast in the world dedicated to people marketing and selling the live experience. 

I’m going to bring my Whiteboard Workshop to London on Tuesday, September 24th, 2019. I’ll be posting the entire details of this event next week, but if you are interested in learning more and taking part, send me an email at dave@davewakeman.com with London in the subject line. 

 

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