Big Ideas:
- Strategy before tactics. The first step is a step back.
- The 4 Ps still matter.
- Brand equity is slow to build and fast to destroy.
Ah, this story is just the perfect story for this newsletter.
Without even knowing this, I actually can give you the entire Dave masterclass in one story.
Let’s see how we do.
First off, I wouldn’t technically call this a discount. I’d say that this is actually a repricing of certain very specific tickets for the final month of the season. But, by waiting until September, the impact of this repricing is likely limited.
Second, discounts still destroy your brand.
While this might not functionally be a discount in the customer’s mind, it probably has a similar impact.
I don’t want to say 100% without data, but remember the conversation we’ve had over the last few months about post-price perception. Perception of the value of your product is what drives a person’s willingness to pay.
The customer decides the value, you don’t.
More than anything, this story brings out my full thinking and learning on marketing over the years because it highlights a few key ideas:
- The importance of Market Orientation
- The power of Market Research
- STP
- The 4 Ps
- Building strong brands
A quick primer on Dave’s Marketing Strategy 101 course, coming soon to a location near you.
First point, the first step in any strategy or marketing effort is a step back. You have to get the diagnosis correct at the outset to ensure that your efforts are heading in the right direction.
The jumping-off point is Market Orientation.
Market Orientation is the idea that you recognize that what you “think” you know the customer wants is likely wrong without some research to back it up.
Pretty simple stuff…you work to bring your customer’s voice into the organization before you start making decisions.
Second, the power of market research.
Market research takes many forms from small to large.
Ethnography is typically my starting point. This is a fancy word for going out and seeing how people actually use your product or service.
From there, move to small group stuff like individual conversations, focus groups, and other small group activities.
At the small group level, you just want to listen for experiences and patterns that show up so that you can formulate a hypothesis.
Finally, you go big in the form of surveys, phonebanks, or other tools that allow you to reach a representative sample of your market.
The key here is that gaining a representative sample of your market is often simpler than you think it is.
Use Google. There are tons of calculators out there to help you find out the representative sample.
I looked up how many folks I needed for a representative sample of the District of Columbia and it was 384 folks. Then I went and did the same thing for New York City, 385.
Moving on to STP, the holy trinity of marketing.
Segmentation is drawing a map of the total population of your potential market, based on behavior.
You want to be able to see how people behave when you look at your segmentation. And, if you’ve done a good job, you can often name specific customers that you know that fit the name.
Targeting is the beginning of your strategy because it requires you to make a choice.
To target effectively, you have to look at your map and pick the best target or targets of opportunity.
In a lot of cases, it is obvious.
A word of caution, too many folks try to avoid the picking part, but most of us have limited resources. So you have to choose. In my work, I try to stick to 1 or 2 targets, but depending on what you are doing…you can go as high as 3.
After that, you haven’t really picked anything.
You are flinging poop.
When you position, you need to keep two ideas in your mind about your position in the market:
- Are you positioning about your business?
- Are you positioning against your competition?
One of two choices, about you or against your competition.
A point of failure is when people try to do both. You end up stuck in the middle and you are mushy and meaningless.
Don’t do that.
All of this allows you to build a strategy with custom sales funnels built on your data, SMART objectives, and creating plans that will be delivered on by your tactics.
Remember, strategy before tactics!
Always!
My most important rule.
The 4 Ps have become a bit controversial in certain parts of the marketing world over the last decade.
Why?
Because most marketers suck and they’ve chased knuckleheads around trying to catch each shiny new bauble and “must-have” tool while undermining their relevance.
The 4 Ps are just a framework for making sure you think through your tactical delivery of your strategy completely.
The 4 Ps are:
- Product
- Price
- Place
- Promotion
They all matter and they all fit together.
Going back to why most marketers suck: too many have bought the belief that all marketing is just the promotion p. And, that couldn’t be further from the truth.
A quick overview for today:
- Product comes in three forms: core benefit, actual product, and the augmented product. You can create bundles or unbundle. The core benefit is the key because the customer defines value, you don’t.
- Price is the MVP moment of marketing because that’s where you capture some of the value you’ve created through your marketing efforts. Pricing properly demands research.
- Place is distribution. Make this decision consciously, direct or indirect. Where do you want your products to show up? In our context, tickets…what is your secondary market strategy? Do you want one? Have one? Direct strategy? Sales teams? Partners?
- Promotion is about just that, getting the word out. What promotional tools are going to help you reach your strategic goals? You don’t have to be everywhere. You have to go where your audience is likely to be. Remember, if you go to Pinterest to advertise to me, you are likely in the wrong spot.
Finally, brand value.
Your brand is the accumulation of every interaction your market has had with you, good and bad.
The good stuff adds up slowly and the bad stuff erodes brand value quickly.
Those are the rules, I don’t make them up.
Everything you do in your business is marketing and brand building or brand destroying.
So let’s draw this back to the $3 tickets, but more importantly, the current environment in the live entertainment business.
Price is the MVP moment in marketing because that is where you capture some of the value you’ve created. In too many places, we’ve seen the reflexive, old strategies rolled out and are expected to work in a new environment.
Then, when the strategies aren’t working, discounting and price-based promotions jump in.
This $3 ticket promotion says less about the Angels than it does about the business model of ticket sales that still seems to be hanging on of rolling out one price at the beginning of the season and using price promotions to “fix” things after the fact.
As an example, Premier League teams have price schedules with a bit of flexibility in them and they only put tickets on-sale within about a month of each match, allowing greater flexibility in pricing.
At the same time, it requires a stronger emphasis on fan development through list building, email marketing, and content management.
Having some flexibility in the sales process and the on-sale process is likely key here.
This situation also calls out for more teams to focus on doing their own research. The reports and data that come from a league level are great resources, but are probably also somewhat limited because the average is an awful way to run your business. If you stand me next to my neighbor, Jeff Bezos, the average net worth is going to be $100 B. If you look at the average price or performance of the DC/Baltimore market, you are likely to get useless information. They are two different worlds.
Get out of the average.
Finally, you have to focus on the overall level of brand engagement in your market because in this case, the Angels have two of the most exciting players in baseball with Mike Trout and Shohei Otani.
You can build some significant brand equity around those two players.
To me, I’m not as down on the Angels on this one as everyone might think because it is a straight re-pricing of certain sections and seats without a discount or some other promotion attached to it.
But this situation does highlight the headwinds that organizations around the world are going to be dealing with for the next 18 months and it emphasizes the reality that everyone is going to have to follow the data, be creative, and be willing to not be stuck in the way things have always been done.