Amazon knows what I want, why don't you?

So I was bored and cruising Amazon.com the other night and stumbled across Amazon's recommendations for me. $308.12 later I had items ranging from hockey pucks to camera lens' to even a litter of stuffed animal sheepdogs heading my way (story for a different time). Were these impulse buys? Sure, hard to say they weren't, but either way Amazon's recommendations were spot on, and the result was $308.12 headed their way.

One of the new "sexy" topics today is dynamic pricing - see my post Trending Conversations. However, a slightly less talked about topic is that of consumer tracking. Consumer tracking is even rarer than dynamic pricing in the world of sports. In case you don't know, consumer tracking is the idea of an organization understanding not only who their consumers are, but what their consumers are doing and spending money on when attending events. Simply put, understanding how to deliver more value to consumers while making more money in the process.

But why, you ask? Well, for any business, I imagine that having insight into who your customer is, and what they want would be pretty valuable. The same applies to sports teams. If I'm a team, I want to know who is showing up and buying tickets, when they're showing up and where they're spending their time and money throughout the game. Are the consumers coming to my game purchasing 2X the amount of hot dogs at the first intermission or between the first and second quarter than at any other point? Are parents more likely to buy their kids a jersey at half-time than at any other point in the game?

If you know these sorts of things, you can plan to not only streamline these sales points for the consumer, but you can also start to offer more value. Take our previous mention about hot dog sales being 2X more popular at the first intermission. If you know people generally buy a soda with hot dog purchases, then maybe you offer a discount on a hot dog soda combo purchase.

The other beautiful thing about consumer tracking is that there are a lot of different ways teams can go about it depending on how much they want to spend. Here are a few methods and examples of current consumer tracking strategies being used:

1) Season ticket cards

Instead of printing out every single paper ticket, teams are starting to move towards season ticket "cards". Season ticket holders will still have the ability to sell individual electronic tickets that can be printed out for games they can't attend, but for the games they do attend, all they need is their season ticket card. The beauty is that ticket is a win-win for organizations and customers alike. Ticket holders can earn discounts around the stadium by swiping the card before a transaction, and organizations all of a sudden have data-backed insights as to where people are spending their time and money.

2) Loaded tickets

The problem that the above season ticket cards presents is that organizations are only able to track those who have and use the card (i.e., season ticket holders). A way around this is the loaded ticket. Over the last several years, customers purchasing single-game and multi-game packages are presented with the option of "loading" their tickets with additional value that can be spent at the stadium. For example, I buy a $30 ticket for a baseball game, but am presented with the option to pay an additional $15 for $20 of value to spend at the stadium. If I know that I am likely going to spend at least $15 on concessions, etc, while at the game, this is a pretty good value for me. Much like season ticket cards though, teams are able to track what these individuals are spending their loaded tickets on.

3) Creative RFID ideas - Jersey implants

Thank you Tampa Bay Lightning for an incredible example of how to be creative. For those of you who don't know, the NHL's Tampa Bay Lightning literally put RFID tags into 10,000 hockey jerseys that they gave out to their season ticket holders a couple years ago. The season ticket holders would receive a discount for wearing the jersey to games, and in exchange gave the Tampa Bay organization the ability to understand more about their season ticket holders. I really think this was just an incredibly creative idea, and will not be surprised if the industry starts seeing more creative ways to track consumers similar to this. You can read more about the jerseys here.

4) Ticket implants or holograms

Although this has been prevalent in other industries, I haven't heard much about this in the sports industry. The idea here is similar to the above ideas in that you are able to track individuals through their tickets. The difference is that the technology has advanced to a point where tracking can be done through embedded technology in holograms that could be stamped onto tickets. One example I heard about was from a trade show in which tickets were embedded with this hologram. Instead of tracking where individuals were spending their money, they were able to track their movements around the entire trade show to determine what parts were most popular at what points throughout the day.

Okay this sounds great, everyone must be doing it right? Well, not exactly. Not everyone... well, not most... actually, an incredibly small portion of teams. So, why is it that only a few teams are implementing consumer tracking?

A) Don't have the capabilities or know how

Okay, everyone has to start somewhere, right? I think one of the biggest issues teams have in not going down the consumer tracking road is they don't see the ROI of the project being positive. Fair enough, but from the point-of-view of someone from the outside looking in (i.e., me), teams that have implemented this technology seem to sing the praises of how successful and how helpful it has been to implement. I can understand some teams not wanting to use dynamic pricing if they don't fill up their stadiums and thus probably won't benefit all that much, but I would think that knowing where your fans and consumers are spending their time and money in your arena is a no brainer.

B) It can be expensive

Yep, it sure can. From what I've heard, it can involve programs and systems costing north of $250k, or it can be as low-cost as having someone keep track of the data in an excel spreadsheet. Again, I believe that teams saying that it's too expensive is still a matter of them not seeing the ROI. If a system costs $300k but the revenue increase would be $500k, you bet everyone would be doing it. Again, this is an opinion from someone who is the outside looking in, but whether or not you come out ahead as an organization in your first year or two is not the objective. The objective is to come out ahead over the long-run and to provide a better service and product to your consumers by understanding them better.

C) Don't recognize the value in it

It might seem a bit odd that a team doesn't see the value in knowing more about their customers, but I have discovered that some sports teams don't even have marketing departments. The famous example here being the Miami Heat, who fired their entire ticket sales department after Lebron decided to go to Miami. To some degree they're right. Why do anything if they're selling out constantly? Why spend money on a ticket sales department or marketing department if there isn't anything else to sell? Let's argue on this if you want, but this is the type of lackadaisical, getting caught with your pants down attitude that has been the death of too many Fortune 100 companies.

Kodak is a great example of a company that actually invented the future (they were one of the first to create a digital camera) but rested on their "bread n' butter" product which soon went the way of the dinosaur. By the time they realized what was happening, it was too late.

Harley-Davidson (and I hate to say it since I own one) is a great example of a company that rested on their laurels for too long and all of a sudden woke up one morning and realized they hadn't done anything to appeal to younger demographics and that their target demographic was starting to literally die of old age. To their credit, they've made a strong push in the last several years to be more relevant with younger generations.

So things are going well, why change anything?.... why not at least get a head start on the future and have a good understanding of your consumer?

For anyone trying to break into the sports industry, I feel like this is just one example of a space that is probably going to continue growing in the sports industry over the next decade. Organizations are going to need people who can do the analytics behind these programs and transform the data into an easy-to-understand format... more importantly, they will need people who can clearly communicate to others what the data is saying.

In any event, I'm off to the drug store to get some film developed...

-Alex

Do or Die: The 1 Hour Conference Preparation

I am writing today from an undisclosed location from an undisclosed conference.

So I'm in Washington DC this weekend attending the SEME conference. The conference itself is in its 10th year and has quite the impressive list of speakers, including but not limited to David Abrutyn who is the Senior Vice President, Global Head of Consulting at IMG all the way to Mark Waller, the CMO of the National Football League (NFL).

What I like about SEME is that it is a smaller more intimate sports conference that allows attendees direct one-on-one access to people who can make or break your path into the sports industry.

What I dislike and what drives me up the wall is how completely unprepared a large if not majority amount of attendees are for the conference itself. If I hear "how do I go about getting an informational interview" asked again of a director, I think I'm going to cry. We're all young and unknowing at some point in our lives, but that's no excuse for being lazy in an industry that requires you being proactive and self sufficient if you want a job. So, here are a few things that even the most novice of conference attendees can do in an hour:

1) [5 minutes] Ask yourself why it is you're attending the conference in question. A basic step that so many people fail to think about. Are you dead-set on getting a job in the sports industry? Are you potentially interested in getting a job in the sports industry? Or are you simply curious or something in-between?

It doesn't matter, everyone is welcome at conferences - provided you can afford going. Once you've answered this, you should have an idea of what it is you want to get out of the conference.

2) [5 minutes] Depending on how you answered the last question, you probably have a different set of goals. Most conferences list who is coming to speak. Sure, these lists may not be finalized until the last minute in some cases, but I'm sure there's a pretty close to finalized roster weeks, if not months before the actual conference. So you have your goals and you know who's going to be attending the conference. Log in and print the roster and agenda out.

3) [10 minutes] Great, you know why you're attending, what your goals are, and you've done some research to know who's attending the conference. Time for a game-plan. Let's start with an example:

You love marketing and strategy and want to work specifically in social media. While at a conference, you see Mavericks owner Mark Cuban and a little ways away Joe Smith who is a marketing director for a minor league baseball team. They're both standing alone and you can pick one or the other to talk to. Who do you choose to talk to?

Ironically, the masses pick Cuban. Don't get me wrong, Mark Cuban is a fun guy to hear speak and to talk to. I'm a huge fan of him and he's an incredible businessman. But why do most people NOT talk to Joe Smith in this example? After all he's your in, he's the guru of knowledge (especially if he's from a minor league team and has most likely has a wide breadth of experience and knowledge himself).

Take my advice, Joe's the guy you want to talk to - have a game-plan.

4) [30-60 minutes] The best way to reach these goals is to... drum roll please... research. Do some due diligence. You don't have to spend weeks researching, or even a day, but we live in a day and age where Google or <INSERT OTHER SEARCH CHANNEL> is an arm lengths away. For the love of Ditka (see what I did there Bears fans!?) please do something!! No more excuses.

OPTIONAL/ MORE PREP

5) Complete the first four steps listed above and you will be ahead of the pack - way ahead. I could write another 10,000 words on tips and advice, but that might defeat the purpose of a quick way to prep. However, here are some quick additional thoughts:

i) Develop your story and be able to deliver it in 15 seconds.

"I'm Tim Thomson and I came back to school for a business degree in order to break into the sports industry. I had the opportunity to work for the Charlotte Bobcats in their finance department this past summer and would love to speak with you about opportunities with the Tennessee Titans."

ii) Don't be the person talking to someone for 5 minutes while there's a line behind you. Introduce yourself, ask your question (singular, aka one), get their info, move-on....

iii) I have never ever ever never ever heard of anyone getting their dream job by simply dropping/ giving their business card to a professional... do you think they're turning toward their drawer (or most likely trash cans) to the 50,000 business cards that they were handed at the last conference to fill a job opening? Get real. If they ask you for your business card, great, but until then keep that puppy parked in your pocket and get their info. Follow-up with them - shocker I know.

iv) Button your shirt and tuck it in. We all have different styles and preferences. Looking and dressing like K-Fed circa 2001 isn't going to win anyone over.

v) If you can't ask a question in under 10 seconds, don't ask it. I love hearing myself talk, but I don't want other people knowing that - trust me, neither do you.

vi) When researching people you want to talk to, connect the dots. You both went to the same college or both love to frisbee golf? I'm no Einstein but maybe try working that in somewhere...

vii a) Be genuine in what you say and who you are. Don't say you want to work in finance if you want to work in marketing.

vii b) If you're willing "to work anywhere in sports" get ready to work anywhere but sports - that was a pretty clever play on words... I claim credit for coining that phrase as soon as it catches on.

Seriously though, know what you want to do within the industry.

viii) Don't be a super fan.

ix) Have a strong handshake, look who you're talking to in the eye, etc, etc, etc.

-Alex

Trending Conversations

I've spent the better part of the last nine plus months talking to as many industry experts as I possibly can to learn about the different areas and opportunities that exist in the industry. I dedicate several pages of notes in leather binders that I own to each meeting that I have. Whether it's an in person meeting that I take notes on after leaving, or a phone conversation that I take notes during, I always dedicate several pages to the conversations that I have. After nine months, I have filled three large leather books with my notes. On a recent international flight I took, I spent the duration reading through these notes. Upon finishing reading through my notes, I was struck by three common topics that I have discussed often during my conversations with industry experts.

1) The emergence of dynamic pricing in the sports industry and why teams and the industry in general have been so incredibly slow to adapt this capability.

2) How teams "weather the storm," so-to-speak, in years when their teams do not perform well on the "field" and they struggle to attract fans to the stadium.

3) How to correctly use and value social media in today's sports industry.

What I'd like to share in this post, are parts of conversations I have had, what experts are saying, and what my personal thoughts are on each of these issues. I also think this post may end up being interesting for me to look back at in a few months or years, as each of these spaces are changing constantly at break-neck speeds. Without further adieu...

1) Dynamic Pricing... let me tell you a thing or two about dynamic pricing...

One of the things that has surprised me is how slow teams in the industry have been to adopt dynamic pricing in their practices - don't even get me started on the IMMENSE opportunity for teams when it comes to consumer tracking, which will be a separate post all on its own in the near future. I realize that some teams have larger budgets and discretionary spending abilities, however the value that dynamic pricing appears to offer seems to vastly outweigh the cost of hiring or arming a smart numbers-oriented nerd individual with data and Microsoft excel. Yes, I know that dynamic pricing software exists and can cost a pretty penny at far north of $250k, but it is possible to build and run your own models in excel if you simply slow down and take the time to do it - again the need for a smart numbers-oriented nerd individual.

I could sit here and write a short novel full of statistics to back the value-add of implementing dynamic pricing. However, at this point I want to share a few of the opinions I've gotten around the industry and my thoughts on each of them:

"we price dynamically so that we sell every seat in the house" - this is perhaps the most common response I receive when I talk to organizations that are currently using dynamic pricing. The main idea here being that teams are using dynamic pricing to increase their overall revenue by pricing tickets higher (generally) to more accurately equate supply to demand. Organizations will usually approach this by trying to set prices that sell all remaining available tickets - i.e., sellouts. This has to be the most logical way of using dynamic pricing. Or does it?

"we try to price in such a way that we sell every seat in our stadium, minus one" - the first time I heard this, I was somewhat perplexed. Why would a team want to sell every seat, save one? Why not sell the last seat and make that amount of additional income? The reason I would come to learn, is because this is the closest way that an organization can truly equate supply to demand. Think about it. If you sell every single seat in your stadium, chances are there was some level of excess demand. Or rather, you used an incorrect price point - you theoretically left money on the table. By pricing to sell out minus one, you will have theoretically priced at a level where there is not a single additional person who will purchase a ticket to your event for that given price point.

"tiered pricing is more effective for us at this point" - some organizations argue that tiered pricing is still the most effective way for them to price their tickets. I will be the first to admit that I am not in a position to say what is best for any particular organization, but I question the logic of tiered pricing being the absolute best way to price efficiently. By only using tiered pricing, teams do not offer themselves the flexibility to price efficiently for hot-ticket games, and as a result are not pricing in the most efficient or optimal manner. Could there be a happy medium between tiered and some degree of dynamic - absolutely, but it depends completely on the objectives of the organization (more on this in a bit).

"there's no point in us pricing dynamically" - oddly I have to say that the individuals I talk to that have this sentiment generally have it for a good reason. The sentiment is generally felt by teams that have trouble selling-out their venues. Dynamic pricing is considered to be a tool that can help organizations increase revenue through raising ticket prices. As a result, for an organization that is not selling-out, pricing tickets at a higher price will most likely not lead to an increase in revenue. However, the point behind dynamic pricing is to increase revenue, which can be achieved through raising or lowering ticket prices. The concern for teams lowering prices in order to increase revenue (through increased demand at a lower price point) is that an organization runs the risk of devaluing tickets and agitating season ticket holders by offering ticket prices below the price that they paid for their tickets.

So what is the right answer for an organization? As any well-trained MBA student will tell you, it depends on a number of factors.

2) Weathering the Storm in Good times and Bad

An unfortunate reality for teams is the fact that ticket sales are most often connected to team performance. The better a team performs the higher the demand for tickets.

Having spoken with a number of organizations, all seem to agree that it is vital during poor-performing years to keep fan engagement up. Examples of how to do this have ranged from doing whatever it takes to get fans to the stadium through promotions, discounts, etc. all the way to creating events outside the stadium to keep awareness up. Sure, I buy this. If a team I follow is performing well and in first place, I’m okay with spending a pretty penny to attend a game, but if that same team is in the cellar of the standings, you bet I need more value in return.

However, I have noticed something that not a lot of teams seem to consider. What can you do to prepare during “good” years to help weather the storms during down times? I have asked the question time and time again to well-run and forward-thinking organizations only to time and time again be told that the main focus at the time for resources is placed elsewhere. Again, I’ll be the first to admit that I have no idea what the priorities are of specific organizations, but I have to imagine that building your brand in such a way that would help weather the storm is an important issue that needs to be paid attention to more. Let’s explore this…

Organizations are always building their brands, make no mistake about it. My previous paragraph is not intended to say that organizations aren’t doing this constantly, but instead is intended to question what type of brand-building should be taking place. I believe this is also an “it depends” scenario. One factor to consider is the recent and long-term history of the organization. Are you a team that consistently sends out a competitive squad year after year (think Detroit Red Wings, New York Yankees), or are you like the majority of organizations where your success on the field ebbs and flows? If you’re the former, maybe this isn’t that big of a deal, but I have to imagine that if your organization is in the latter (and there’s nothing wrong with that!), then planning for the ups and downs in performance seems like a no brainer. 

Great, talk is cheap, so what is it that teams should be consistently trying to do to protect themselves against the down years? First, set real expectations for what a reasonable target attendance number could look like during down years. What sport do you play? If you play once a week versus five times a week, your scarcity factor in the number of games that individuals can attend over a season changes. I also say “could” look like because teams already have an idea of what attendance does look like, not what it could look like. Second, be honest with yourself as to how your organization is really performing. Is your organization taking every advantage of its current market? Probably not. What multicultural avenues is your organization exploring? Does your regional area have a large number of Hispanics, Irish-Americans, LGBT, college kids? If so, what specific events and outreach initiatives have you created to reach out to them? What is your social media strategy? What platforms and channels are you delivering on and who is it that you are really targeting? My point is this - I have not seen a lot of teams truly exhausting their ways of identifying potential consumers. Saying it is not in the budget is not an excuse during a day and age that many fan engagement channels come at little to no absolute cost. Well... maybe a little creativity and elbow grease are required.

3) 10,000 “likes” on Facebook is worth $100,000… well maybe

Talk about the go-to topic when you run out of things to talk about with people in the industry… joking aside, there aren't many hotter topics in the industry right now than social media. A lot of this has to do with the fact that everyone from your nieces and nephews to your grandmother and grandfather are on it, but also because the space is changing so incredibly fast. When Twitter first came out, I vowed to never have a Twitter account or to even read about how it worked. At the time my Facebook and email were enough. Who cares what disgusting greasy sandwich today's celebrity stuffed down their throat at lunch? Yet here I am in March of 2013 with a Twitter account, because I was originally narrow-minded on all the applications Twitter could be used for. I ultimately signed up for an account because it’s where I get my news from around the sports industry within moments of news breaking. Anyone who is in the industry knows exactly what I’m talking about.

To be honest, I’m not even sure where to begin with my thoughts on social media in the industry. You have some teams that have decided to have a single voice in social media and have only one Twitter or Facebook account while others have accounts set up for kids, adults, ticket sales, concession sales, player updates, staff updates, towel boy updates, blah blah blah blah blah. But the real big gorilla in the room is how to go about valuating different social media channels. 

One question I ask a lot of the individuals I speak with is how they go about attaching value to Facebook “likes”. The responses are all very similar in that it is incredibly hard if not impossible. I’m not sure if I agree that it’s impossible, but will agree that there are a lot of variables that can change what certain metrics may or may not be worth. 

Another question that I struggle with is the role that social media should be playing in the sports industry. To me, social media started as a platform to hold conversations; to communicate and connect with people from all walks of life from all over the world. That’s not to say social media cannot be adapted for other purposes, but I continue to wonder whether or not deviating from social media’s original purpose and intent can be harmful to organizations and brands? I see many organizations trying to use social media to sell more tickets. My thought is that organizations most likely want to be seen and considered a “friend” in the conversations taking place on social media instead of a person who is trying to push more sales onto them morning, noon and night - (on a quick side-note, I do believe teams can use social media to sell more tickets, but they must be cognizant that they may be walking a very fine line, risking alienating and turning potential consumers off if they market and communicate in the wrong way).

As mentioned above, there are many variables involved in determining the true value of social media’s impact on an organization. One obvious differentiator is the size and scale of the organization in question. Are you Microsoft? A big market team? A small market team? 10,000 “likes” on Microsoft’s Facebook page after launching a new operating system may actually be a negative if Apple’s Facebook page received 1,000,000 “likes” after a new operating system launch, whereas 10,000 “likes” on a small market teams Facebook page after winning a game may be the next big thing since sliced bread. The point is that I see a lot of teams making a HUGE mistake. I see a lot of teams trying to benchmark themselves against other teams and other organizations – wrong wrong wrong wrong wrong! So many business leaders in the industry (actually both in and outside of sports) don’t seem to understand the underlying purpose and usefulness of social media and instead tell their staff’s “I want 100,000 “likes” by the end of the year”. What? Why? Where did they get that number? Is it because it sounds nice and because the team down the street was able to reach that? Benchmarks are great, no doubt, but organizations need to realize that no two organizations are alike and as a result neither are any two fan bases. A 1,000 “likes” for one organization could be 10X as valuable as 1,000,000 “likes” for another. This brings me to my next question.

What are you using social media for? Are you providing content in the form of news and updates, conversing with fans, offering promotions, or offering ticket sales?

So are 10,000 “likes” worth $100,000? Maybe.

-Alex

Welcome to my blog

I'm on the left in the green t-shirt

Hello and welcome to my blog. I am a current second year MBA student at Duke University's, The Fuqua School of Business. I came back to school in order to pursue a career in sports. In the summer of 2012 I had the opportunity to work for the NHL's Washington Capitals marketing department. My experience there cemented my desire to remain in the industry once I returned to finish my second year at Duke. Upon returning, I decided to "cast my net wide" so-to-speak and make a concerted effort to learn as much as I possibly could about different parts of the industry.

Over the last seven months I have learned more than I could imagine about different parts of the industry through informational talks with industry professionals and reading everything I can get my hands on. Since returning from my summer with the Capitals, I have been fortunate enough to be given an opportunity to intern with Wasserman Media Group in their consulting department - specifically in their multicultural division. Needless to say, my first two opportunities in the industry have been with two incredible organizations with incredible mentors. I can only hope my good luck continues.

I decided to create this blog for a number of reasons:

1) To have a space to document my "adventures" and thoughts as I navigate the industry and try to secure a permanent position in the industry.

2) To share interesting tid bits that I pick-up as I talk to industry professionals which hopefully in turn sparks conversation and ideas.

3) To have something to look back on in a month, year, decade, etc that will not only detail my experiences, but that will also serve as a reminder of the path I took throughout my time as a student and professional in the industry.

4) Finally, to hopefully provide guidance to anyone that also wants to pursue a career in sports. Whether that ends up being lessons on best practices, or lessons on what "not to do" is still unclear. I'm not an experts (yet), but I'm passionate about breaking into the industry full-time. I don't know where I'll be in six months, or a year, but we hope that the documentation of our journey and thoughts along the way are helpful to someone. Who knows, maybe I'll be the CMO of a team one day... or the biggest geek who reports to a CMO (much much more likely).

Either way, I hope we can share some laughs, tears, and insights as I press forward with you.

Sincerely,

Alex Kerr