One of the best things I’ve read lately is Dorie Clark’s new book, Entrepreneurial You.
I love it because Dorie writes about the need to figure out how to monetize your audience to keep being able to do your best work.
The thing she doesn’t talk about is trying to build your audience off of the back of the monetization. No. She says, start with your audience and build for them. Others will follow.
Which I am sure is an incredibly simplistic reading of her book, but it reminds me a lot of the world of sports business these days.
Because so many teams and the leagues that support them are talking about a number of different businesses that they are in:
- “We are becoming more digital content businesses.“
- We are in the real estate business.
- Our main business is to produce content for our TV partners.
All of these may be somewhat true to an extent, but they are also entirely wrong because if you are operating a business, your job is to build customers. If you are a modern sports franchise or business, your job is to create experiences.
The digital content. The real estate. The content.
All of those are subservient to the idea that you need to build fans and customers for your business.
Don’t believe me due to the amount of money that is going into these areas?
If the content was the only thing that the TV networks worried about, why would they have ratings guarantees in them?
If you were only in the real estate business, why would you build a stadium or arena on the land? Stadiums are like cars to an extent, they start depreciating as quickly as you take ownership of them.
If content was the only thing that mattered to fans, why would they ever do anything except for click on something, watch it once, and be indifferent about where their next content hit comes from?
If you are truthful in your thought process there, you are going to come up with a number of answers to those questions:
- The digital content we deliver is either specific to our fans or such an extraordinary play that people have to see it.
- The real estate, even if it is attached to the stadium, is only as valuable as our ability to create an environment where people want to come.
- The content that we provide for our TV partners is only as valuable as it is because people care about tuning in to watch sports and entertainment live.
This means that we have to get our focus on building and keeping fans, customers, viewers.
This is the iron law of business that you must build and keep customers.
If you don’t, you don’t have a business.
How you define a customer can and should be different depending on the outcome you are hoping to produce.
Maybe you have a goal like Manchester United to have the biggest sports’ brand in the world. If so, you are going to generate revenue from any number of ways:
- Tickets
- TV rights
- Digital rights
- Merchandise
- Advertising
- Sponsorships
This list can likely be as long as my arm.
The thing is that each of these specific monetization platforms needs to be attacked in a different way.
Using Man U, they have over 600 million “fans” around the globe.
That’s a phenomenal number.
The question then becomes: “How do we maximize our monetization of these fans?”
Not before, but after you have them.
The problem with too many organizations is that they start with the we want to monetize everything but never put the customer first.
Look at the NFL, ratings continue to sag and seats continue to be unfilled.
The NFL has largely taken a “nothing to see here” approach to the challenge because the money keeps rolling in from sponsors and TV.
But what happens in 2 or 3 years when this trend isn’t reversed and you are seeing the empire you’ve built crumbling so rapidly that you can’t possibly reverse it?
Its too late.
Say hello to Commissioner Wakeman.
All kidding aside, the best way to approach monetization is by always looking to create more and greater value for your customers and prospects.
The best way to make sure you are focused on the right things from the start? Ask yourself some questions?
What is the thing that are customers and fans value most?
In the case of the NFL, the NFL believes or acts like they believe that they are an ad delivery platform. The only problem here is that the era of mass advertising has really closed down. People are really able to tune out mass advertising better than ever before. And, if the ads are too intrusive, they really just turn away. There are always clips and highlights somewhere for the fan to find.
That puts the NFL in a position where they have to deliver ads, but they are losing fans.
There isn’t an easy fix here, but there are some opportunities.
Think about trying something like the World Cup where advertisers sponsor the action with “limited” interruptions.
Maybe you can work it into the game broadcast.
Maybe make the sponsors have more meaningful content within the broadcast.
If people are tuning out mass marketing, maybe relevant marketing is a better fix.
How about something like the NBA does where the first ad doesn’t come until several minutes of game play?
I’m sure that customers don’t value being a set of eyeballs for advertisers to pitch to. And, the research that the Commissioner points to that says fans don’t care about the length of breaks, just the numbers is probably total BS.
If you put yourself in your customers seat, you are going to see that they want action, entertainment, stories, connection, community.
That means that you can serve two masters by serving the most important one first, customers.
Maybe your partners on the ad side can create opportunities to connect. Maybe the ads can be about stories.
Whatever.
Just don’t lose sight of the need to build something that your customers care about.
Even if you think that the TV people are your primary customers because of the amount of money they pay you, you are wrong because if you don’t have anyone watching your games…you won’t have the TV money to worry about.
How can I make being a fan meaningful?
I went to the University of Alabama.
Which by default makes my son a lifelong Alabama fan.
Much of our connection to sports is driven by stories that have a similarity to this.
The thing is that this connection has been broken more than we like to admit with the continued commercialization of the games.
It feels like we have commercialized everything to the detriment of what made commercialization possible to begin with.
Which is community, connection, stories.
Lately in the US, we have seen a lot of teams move towards calling their ticket packages “memberships” because they offer a payment plan and a party or two.
That’s not really holding true to the idea of “memberships” that originated in the Australian sports leagues.
In Australia, fans buy memberships as a way to support their clubs even if they may not be able to attend games.
As a member you have a special members only part of the site, discounts on merchandise, access to streams, special ticket opportunities, they may do something for your birthday.
All kinds of stuff.
The point being that they want you to be more and more invested in the club. They realize that the club is a community and that connection to the club should be more than just a passing fancy.
Contrast that with the way that teams in the States treat fans.
Typically, our sales and marketing cycles are built around the idea that winning solves everything.
They are built on the idea that everything is premium and in a lot of ways that you are lucky to be there. Even though a quick glance at the Twitter feed of Empty Seats Galore will tell you no one cares in too many instances.
In most cases, the membership idea that is offered in the States is rehashing the standard old-school season ticket package with new language.
Which is a missed opportunity because as we have begun to develop digital assets, merchandise opportunities, partnerships…there are just more opportunities to make connection to the club more valuable than ever.
Think about it like this: I’m a Mets’ fan because I lived in NYC for ten years. If I visit the Mets website, there is a fans section and the only thing that they have that resembles a membership is for kids.
I also know that on Facebook there are dozens of Mets based groups that chat and moan about the Mets.
Missed opportunity for the Mets not to control that.
This is a prime example that the team could be doing more to making the connection to the team more meaningful.
You aren’t likely to get all positive feedback. But you are likely to get some good, constructive feedback. You are likely to learn a lot and you may offer more value.
Besides just social media, you can do a lot of things to open up the connection between you and your fans.
Compare that with the Western Bulldogs of the Australian Football League. They offer a number of membership packages. Almost too many.
The coolest for someone in the US, an international pass that allows fans to stream all of the games.
The thing is, there are tons of opportunities to engage and grow the connection between your fans.
Its not just a goodwill thing either. Because the truth is, trying to gain customers is expensive and keeping them is the cheapest form of marketing.
BTW, if the Mets want to know what I would do…call me. I’ve got ideas.
Why are fans tuning out?
This is the key question.
We talked about what fans value.
We discussed building stronger connections.
But the big thing is why don’t fans care as much?
There are a lot of reasons and many of them aren’t exclusive to sports.
Here’s a few:
- Feel like they are just ignored or taken for granted.
- Prices make them feel gouged.
- The in-stadium experience is subpar.
- Customer service is poor.
- Other things to do.
- Lack of awareness.
Those are just a few.
What this all leads to is that somewhere along the line, the value chain has become broken.
If we are sitting here with declining attendance and declining viewership, that’s on us. Not on the consumer.
Because the thing is that fans and consumers have more demands on their attention than ever before.
But that has always been true.
I think this means that we need to take a deeper dive into the way we present and share our games and events to our fans and customers.
Because right now we are too reliant on what Mark Rinson calls “spreadsheet jockeys” to make our decisions.
We have lost the humanity of the sporting experience.
That’s what’s really driving all of this.
The fans and viewers are turning away because it feels like there is no human connection between us and what we are doing.
We need to return the humanity to the experience and not in a self-serving way.
Think about what would make it meaningful to you.
How can you tell compelling stories?
How can you make powerful connections?
How can you make your fans feel welcomed and respected?
That’s the real issue here, respect.
If we don’t put that back into our business model…we are all going to be in trouble.
BTW, you like this kind of stuff? Send me an email dave@davewakeman.com and I will get you on my list for my Sunday email that talks about value, people, and business.