Home Field Advantage

American Demographics, April 1, 2001

An average fan at a Major League Baseball game pays about $15 per ticket and spends another $15.40 in non-ticket items.

First a national baseball strike, then a loss of several popular players. For the San Diego Padres baseball team, both events contributed to a defection of fans in 1996. To reconnect with disillusioned supporters, the ball club hired Essential Data Collection Systems Inc. (EDCS), a Phoenix-based technology vendor, to create a loyalty program to reward those willing to attend a majority of the Padres' home games. In the 1996-1997 season alone, the ball club signed 60,000 new fans and collected about $400,000 in revenues from new season-ticket sales.

Ever since Cro-Magnon man first tossed a rock over home plate, sports marketers have been trying to figure out ways to keep fans loyal to their home team. Today, a growing number of sports franchises are taking a page from the Padres' playbook. Major and minor league teams are only now beginning to use customer relationship marketing (CRM) strategies to stave off fan defection. Part of the reason for adopting a CRM approach is that franchises today face a double whammy. Consumers have more entertainment choices; even the most die-hard fans wince at the ever-increasing cost of attending a sporting event. Add to the mix a losing season, and a team is faced with a tough ticket sell and empty seats. "Although a team's first priority is always going to be winning, teams have to stay solvent during the losing years, too," says Blaine LeGere, EDCS' director of client services and operations. "The only way to do that is to create loyalty among the fans."

CRM isn't bleeding edge. It's been the backbone of most consumer-oriented marketing programs for the past 20 years. But new technology is allowing developers of customer relationship programs to better manage the data they gather. It's also helping marketers enhance their recruitment of new customers and keep current clients. Until recently, sports teams have not had access to CRM strategies designed specifically for their use. Today, it's a different ball game. Aided by technology, sports-specific strategies are helping marketers reconnect with their fans. Even when a team is winning and stadiums are packed, CRM helps identify those fans most likely to buy season tickets or ticket packages in advance, by creating databases on fan attendance. A team can then target these prospects for season tickets the following year. Advance ticket sales are extremely valuable to sports teams, since they guarantee a certain revenue level for the season.

"Club cards," similar to ATM cards, are at the heart of fan loyalty programs these days. Although programs vary slightly from team to team, the idea is pretty much the same: Each time fans use their card, they rack up attendance points redeemable for promotional coupons or items such as food, drinks, and souvenirs. The more points they compile, the more "rewards" they receive. In return, the teams get a database filled with information on their fans, which could lead to additional revenue streams. For example, when fans sign up for a club card with the EDCS Ultimate Fan Loyalty program, they must complete a form asking for their addresses, incomes, family configurations, and other basic personal information. And if teams want, the surveys could also include tailored questions like "What's your favorite soft drink?" or "What kind of car do you drive?"

Dave Auker, senior vice president of The Palace of Auburn Hills, a Detroit sports and entertainment complex, is counting on loyalty marketing to maintain a full house. The Palace hosts the NBA's Detroit Pistons, the IHL's Detroit Vipers, the WNBA's Detroit Shock - all of whom had less than stellar seasons recently. And, this spring, the 21,000-seat arena will also play host to a football expansion team - The Detroit Fury. Auker hired EDCS last year, and the company started the "My Pal" program in January. So far, about 10,000 members have signed up to accumulate points by attending sporting or special events. From this membership database, Auker and his marketing team will create "more personalized" interaction with the fan base - from individualized e-mails to, perhaps, video highlights of sporting or entertainment events.

Auker says this investment is critical to increasing profits in an environment in which consumers are beginning to dictate their experiences at an event. "Database management isn't really new to sports, since ticket information always 'kind of' told you who your customers were," says Auker. "But our knowledge was primitive. The big difference today is now you 'really know' who your customers are. That's a critical distinction, and it's due to technology. For anybody who wants to do a good job marketing sports by filling the stands, it's a no-brainer."

In the wide world of sports, a fan in a seat equates to increased revenue generated from ancillary offerings such as food and merchandise. Loyalty programs can help generate millions in additional revenue. An average fan at a Major League Baseball game pays about $15 per ticket, and spends another $15.40 in non-ticket expenditure, a whopping 103 percent of non-ticket dollars (as a percentage of ticket price), according to Chicago-based sports marketing firm TMR's report, "2000 Inside the Ownership of Professional Sports Teams."