Sports Sales: Are We Outpricing Ourselves?

Pricing. It’s so interesting in talking with teams as to how they arrive at pricing. It’s a mix of their perceived value, the market, and how they can show perceived value to the fans. Often times it’s a random increase with no real logic or statistical analysis behind it. It’s simply ‘the price.’

I hear a lot of ‘costs go up and we have to also’ which, while true, is not necessarily the answer. Costs do go up. But does everyone have to be part of the increasing? On the flip side, we hear a lot of ‘just get them in the door and people will buy food and we can make it up there.’ It’s great if you manage your own food service, but not as great if you get a percentage. So what to do?

What are the dangers of overpricing?

• Customers who won’t pay the price. Just like ‘build it, they will come’ is not necessarily true at all, the higher price does not equate to excellent value thus worth it. Underpricing is actually worse than overpricing as the perceived value is worthless. So of course you want your pricing up not down. The key is to focus on branding. How do we want the brand to be perceived? Giving away loads of free tickets to fill the house says our brand does not have value. In overpricing, it says our brand is overpriced for the value it gives. Both are very hard to recoup from. If we are going to increase, then we need to make sure the service is stellar (and not just ‘checking in’) and 365 days of the year as well as the buying experience. Maintaining value and focusing on a top notch experience will justify a higher price.
• Sales cycle. If it is taking clients forever to decide during a sales cycle, then you need to look at pricing. While they are thinking about yours, they are looking at others and comparing.
• Competitors. If your competitors are offering similar pricing and similar value and experiences, but are a bit lower, fans will go with them. What is making you stand out with your pricing? What can you tell your story about?

Let’s look at a couple of instances that can help us. I gave the example of service. Service is the area I get the most complaints about. “We purchase and then the ‘service’ dept. just calls to try and sell me more. Never helpful.” Focusing on service in a way that truly says ” I care” and “you are valuable to us” 365 days a year will definitely justify pricing. The El Paso Locomotives just created their new service department and I can honestly say it is the best program I have seen, major or minor leagues. If they execute this fully as I am confident they will, they will have established unprecedented value to being a member.

The experience. There is a reason why the Chicago Dogs, in a crowded market of Chicago major league sports teams, is able to sell out so many games and so many hospitality areas. Pricing is justified by the exceptional experience and the story they tell. What you experience in social media you will find carried through at their games. Their brand is built on the exceptional experience they provide as well as the service they give.

There are ways to provide a justifiable price and still give an higher priced option, especially in single game marketing. Adding on to a single game ticket for those who want the upscale experience can be a most justifiable way to to garner that higher price. Giving them an option to add on to pay for a shot on the court postgame or throw out a first pitch or steal second base, etc. at a premium price satisfies those who want that premium experience. By adding on options to single game buyers, a ticket can go from $30 to $300 or more, all while providing a particular person the customized experience they want.

Changing pricing should be based on statistical analysis, not ‘it’s time to raise prices.’ A price raise in one area could mean a drop in another. It also doesn’t mean to change pricing across the board. Analytical thought driven by statistics will help us make the right decisions.

Lastly, it is important to look at your own market. Major or minor, focus on what the market will bear, as well as what you are offering. What do you want your brand to be known for ?

At the end of the day, we know revenue is what drives teams. What will people say about your brand when price comes up?

Don’t forget…will see YOU at the Sports Sales Bootcamp at the ALSD Conference in July!!!!

Kathy Burrows, Chief Energy Officer, Sold Out Seating

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Questions on Sales, Marketing, Community Relations, etc. with your team? Leadership? Job related? Send your questions by 5 p.m. Tuesday’s for inclusion or personal answer in Kathy’s Sports Sales Mailbag to: kathy@soldoutseating.com

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