I’ve seen a lot of articles floating around the Internet recently about the struggles of NASCAR: failing teams, declining revenues, bottoming out attendance.
If you poke around any kind of live entertainment, this is a challenge that isn’t unique for a lot of entertainment options.
Anytime you see, 21 of 23 tracks have a big decline in their attendance and revenues, there are significant challenges.
And, like a lot of sports, NASCAR is in the middle of a bit of soul searching.
They’re are thoughts of tinkering with their poll positioning; the length of their races; and, other ways to generate more and more revenues.
In truth, NASCAR is a cautionary tale for any of us that have invested any part of our career to sports and entertainment because if we look closely, we see a lot of challenges that either placate us or that make us think we are doing a much better job than we might really be doing.
Big TV money:
Right now, NASCAR is in the middle of TV contracts that pay them almost $7B in rights fees.
The great thing about the rights fees is that the contracts are guarantees and provide a tremendous marketing vehicle for the sport to reach an audience.
The downside of this is that as I’ve said before, the TV organizations are the sports customers. The fans that watch the sport are the customers of the TV providers…especially if there isn’t some direct marketing action requested of the fans viewing on TV.
The second downside to the big TV contracts is that with chord cutters and cable viewership declining, there is the potential that these contracts could become huge albatrosses to the TV companies and become liabilities that can’t be paid.
This is the proverbial, too many eggs in one basket situation that a lot of organizations face no matter what industry they are in.
But it is cause for concern.
Lagging Attendance:
Declining attendance is a challenge in almost every form of entertainment unless your show goes by the name of Hamilton or you aren’t a member of the band Pearl Jam or, possibly, if you aren’t LeBron James, at some point, you are likely playing to many, many empty seats.
This is just the norm in today’s market for too many of us.
There are a lot of factors that go into this decline in attendance:
- Poor marketing of live entertainment as the best option for a night out
- Changes in buying habits of younger generations
- More entertainment options
- An all or nothing society that only wants to see the best, the winners, or the hot thing
Whatever series of challenges is lined up, they all have led to the challenge of declining attendance.
No one is really safe, not even the hottest of teams like the Golden State Warriors have seen their attendance not be to complete capacity.
As professionals in live entertainment, we all know that the best way to build and keep a customer is to make sure that we get them in the door, to experience the full magnitude of what we offer.
Declining Revenues:
This one is probably most pronounced in NASCAR currently, but I have a feeling that it isn’t going to be long before other sports start feeling the pinch as well.
There are just so many reasons that any business is going to start seeing their revenue take a dive. Many are in their control and many are not.
For the same reasons that we discussed above with falling attendance, the same things can apply with declining revenue.
But there are some other ones that feel like either complete arrogance or complete missed opportunities, not all of which apply to NASCAR:
- overpriced food and beverage (I’m looking directly at every $11+ Bud Light)
- bad or limited merchandising. (I heard recently that FC Barcelona makes more than $100M per year on merchandise sales. While I bemoan every trip I make to the NHL team store in Manhattan.)
- erratic pricing (sales teams pushing season tickets that have low value add and as soon as they struggle, pushing discounts that make the people investing in season tickets look stupid for buying early)
- an in-game experience that doesn’t compare with the at-home experience
I could go on.
The point being that a revenue drop is almost guaranteed when you don’t offer some form of unique value proposition and focus on not just the hard core fans, but the casual fans, and the people you may not have talked with previously.
But what’s the flip side, how would someone like NASCAR turn the ship around?
Here’s 3 ideas:
Start with some of the basics:
The ratings, attendance, and revenue didn’t fall all at once.
In truth, no matter what business you are in, they never do….things have a tendency to erode slowly over time and then all of a sudden.
What typically happens in a situation like this is that we have started to forget about the basics. In entertainment, we all get lost in the idea that the sport, the idea of theater, the performance itself sells itself, but the truth is that as much as anything…we are in the marketing business.
Which means that we need to sell our sports, our shows, our performances…
That begins with a simple 3 question framework:
- Whats the value we deliver for specific audiences?
- Who is a buyer for this kind of value?
- How do we reach them?
Why this framework?
Well, we need to start out with some kind of idea of what we can offer our buyers.
If you spend any time looking at any entertainment ticket sales site, you realize pretty quickly that the idea of offering value, understanding their customers, or making the buying experience convenient is all lost on too many organizations.
It is like they try to cram everything into one space or one site.
The challenge for most of us when we are facing a challenge is that we are so addicted to the action that we stumble with the planning and the thinking.
So the first step in overcoming these revenue, ratings, and attendance declines begins with looking at where you are, but more importantly where do you want to go.
Then design every thing you do around the answers you have.
Falling into the bucket of basics is going to include things like:
- Pricing
- Customer experience
- Consistent marketing and communication
Maximize the in-track experience:
This is a bit of a theme for me.
I know that customers are more and more attracted to great experiences.
It feels like more and more and more of our lives are commodities, so most of the things that we do for entertainment need to be unique.
The great thing about NASCAR or any other sport or live entertainment option, for that matter, is that we can do that on a daily basis.
You are never going to see the same race again.
Why?
There won’t be the same drivers in the same position in the same track with the same weather and the same crowd ever again.
(To list just a few items)
That means that every time you step foot in our venue, it is going to be unique.
It means that you aren’t going to be able to recreate this evening, this day, no matter how hard you try.
I remember the first time I saw The Producers on Broadway and I was in a cramped seat in Row A, stage right.
It was a transformative experience for me, the greatest theater night of my life…and because I was in the first row right where most of the actors entered the stage, and I was losing my mind, it felt like they were playing up to me because I was giving them so much positive energy.
Who knows if that is reality?
It doesn’t matter. I can relive that over and over and I will never experience it again.
That’s the power that we have with our experiences.
Make the event special.
Make the chance to see a live race unique.
At every touch point, make it transformative.
We have the power to elevate our fan engagement, especially when the fans are in the building.
Why aren’t we doing everything we can to take advantage of that?
Innovate, constantly:
I feel that innovation is often a scary word for too many businesses.
In the world of live entertainment, we have the chance and the opportunity to make innovation a natural part of our jobs.
In looking at NASCAR’s challenge with bringing Monster on board as their official sponsor, I am reminded that innovation transcends any one area.
Innovation can be anything and everything.
Remember when buying something on the Internet was a huge deal.
Now many of us never even leave home to do most of our shopping.
When you put it in context of live entertainment, the bleeding edge of innovation is visible, if only because we haven’t done as much to embrace innovation in the past as we should have.
Virtual Reality is a constant part of the NBA’s fan development strategy.
What about using Augmented Reality?
How about changing the way that fans and customers experience the anticipation of an event?
How about the way that people buy merchandise, food, beverage inside the venue?
What about not just offering a ticket window on-site for the next event you offered an incentive that is paid on the spot?
Can you improve the merchandise?
What can you do with text? email? video?
Are there better ways to sell tickets and let fans know that your tickets are on sale?
Whatever the area, you can hopefully think of several ideas that will change the way that you approach your customers.
While this isn’t all directly in the eye of NASCAR, I do know that NASCAR is a lesson that all of us can learn from.