Hi!
One final note from NYC where I gave a lecture at NYU.
This is another one from the ALSD archives that applies right now.
Pricing is marketing’s MVP moment.
This is the moment marketers capture value from the efforts they’ve taken over the years building your brand.
However, in too many cases marketers end up making poor pricing decisions or end up locked out entirely.
Why?
Too many marketers are stuck in the communications silo, leaving the executive team with the belief that the marketing department is only for coloring in and that the marketers don’t have the business acumen necessary to deliver the pricing decision.
Marketing can regain their role in pricing by focusing on 3 elements of the business that help define the MVP moment:
- The voice of the customer.
- The price-to-value equation.
- Brand investments as profit investments.
Managing these 3 elements will help your team sell more tickets.
Let’s take a look.
Why is pricing marketing’s MVP moment?
First, price is the most important lever any business can push to drive profits.
On average, for every 1% you can increase your price, there is a 10% uplift in profits.
No other lever comes close.
Two, price is a signal.
The price you set can signal quality. It can sign accessibility. It can be about inclusion or exclusion.
Think about the price of a mass transit ride. A Tesla. A McDonald’s Value Menu item.
They all signal something unique.
Three, your price can support your brand equity. This brand equity often acts as a short cut in people’s buying path.
How so?
Look at the waitlist for the launch of a new iPhone. How fast did Taylor Swift’s tickets sell out? What about the demand for Beyonce?
In all three cases, price isn’t a barrier.
People have to have the new iPhone on launch day.
Swifties needed to see her show.
The Bey-hive plotted how to get around the on-sale challenges that other fan bases were having with ticket sales.
Set the wrong price, you miss profits. You lose opportunities. And, you may be sending your fanbase to an alternative option.
Set the wrong price, you can undermine your brand equity.
Price too low, you can lose luster, prestige, and cache.
Price too high, you can signal that tickets to your games are only for a special occasion, aren’t for the average fan, or just aren’t accessible.
Worse, setting the wrong price can lead to bad pricing decisions that signal low quality.
Commonly, this means discounting.
When customers see discounts, they may love them and you may get a spike in sales, but they also question whether or not they should wait for a better deal leading customers to wait the next time they are going to buy.
Even worse, these discounts can signal to your market that you don’t believe in the value of your product.
Setting the right price can reverse those things.
Pricing well, drives profits.
Pricing well, underlines your brand equity.
Pricing well, signals that this team is one that I want to be a part of.
Marketing knows the customer:
You begin with research.
Research is a focused effort that helps bring the voice of the customer into your team’s business.
Research helps you set the right price by:
- Knowing what your market needs.
- Identify things that customers want.
- Highlights where people find value.
- Teaches you the important things in the lives of your customers.
- Helps you figure out what people pay for and how much.
Wants and desires drive emotions. Emotions make people buy.
Emotion gives you leverage when you set your prices.
An example I share takes me back to early in my career when I helped open nightclubs around the United States. I learned to ask every guest that ordered a gin and tonic what kind of gin they preferred.
This was important because I quickly discovered that no one sees themselves as a “well” gin and tonic drinker.
“Well” gin drinkers weren’t meeting new people at the club, living their best lives.
It turned out that almost everyone had a preference: Tanqueray, Bombay, or something else.
All driven by a desire to feel sexy, successful, hot, and cool.
This same set of emotions drives ticket sales.
But you can’t think you know this, you have to know this by doing your research:
- Do your research.
- Collect feedback.
- Interpret it.
- Adjust.
- Go again.
- Never stop.
This is how you get the voice of the customer into your team’s business thinking.
Your biggest danger: thinking you know what your fans want.
You don’t.
You are too close to the team, the sport, and the events to ever see them like your fans.
Don’t fall into the trap, do your research.
The Price-to-Value Equation:
This constant learning from the customer leads to real insight that can drive ticket sales, profits, and more opportunities.
This helps you use the Price-to-Value Equation.
Price = Value.
It is simple. No one pays for something they don’t value.
This highlights the point that price is a terrible driver of demand. If no one values what you are selling, no price is going to make them buy.
That’s why managing your brand equity is so important.
Strong, positive brand equity creates pricing power by building stronger brand associations and creating shortcuts to the purchase decision.
Strong brands have pricing power.
You build up this brand equity by using the emotional power of live sports and entertainment to establish a foothold in your customer’s thinking.
Once you gain that foothold, you refresh that connection over and over by using symbols, sounds, colors, and other brand codes to make sure that you are on people’s minds.
Think about the way that the color red dominates Washington, DC and “Rock the Red” is something most people you run into on the streets will know.
How about a picture of the Green Monster at Fenway Park? That evokes a sense of place and feeling in almost everyone.
What about the first notes of “Yea, Alabama” or your fight song.
Those are all marketing devices and they all add to the Price-to-Value Equation.
Brand Investments are profit investments:
Your brand is a living, breathing entity.
My definition of a brand is the accumulation of all the interactions your team has with your market, good and bad, over time.
Know that the good adds up slowly, but the bad can tear you down in seconds.
Investing in your brand is investing in your profits, your sales, and your long-term relationship with the market.
The starting point is building the top of the funnel using emotions.
What does this look like?
It is powerful stories of the excitement of a game like the Australian Football Leagues’s 2022 “This is Us!” ad that welcomed fans back to grounds after lockdowns from COVID.
This isn’t a one shot campaign either.
Because your brand investments build up slowly. It is about consistency.
This matters because often the decision is between “sales activation” and “brand building” with the brand investments coming in second because it is often hard to directly measure the impact of your brand building efforts.
The choice is a false one.
Research by the IPA in the UK shows that when the question is asked about whether to invest in branding or sales, your answer should be “yes”.
Yes, to both.
Investing in your brand supports your sales now and in the future.
It does this by building those emotional connections in your fan’s brain, nurturing those connections over time, and creating a preference for your team when questions like “what should we do this weekend?” come up.
This nurtures your profits by making it easier to sell to your fans. Your brand investment creates a preference for your team that will exist no matter if the team is winning or losing. And, investing in your brand decreases the likelihood that you’ll have to discount…which is the fastest way to undermine your brand equity and your team’s brand.
Teams are no different than other businesses when it comes to pricing.
That’s why it is so important to understand how to maintain your pricing power.
If you don’t, you get caught in the vicious cycle of waiting to win, discounting heavily, or papering the house to make the stadium look full.
While none of us can guarantee sellouts at every game, knowing our fans, focusing on delivering value, and investing in our brands can help us sell more seats no matter what the result.