Fan data is at the heart of the business of football these days. As David Reed found out at a sports and leisure industry event recently, clubs and companies are looking to build and develop their customers through innovative uses of CRM.
Kiss - the make-up wearing, tongue-wiggling American pomp rockers - recently launched their latest tour with a showcase gig at The Forum in London. If you went, you might have noticed something new other than the light show. Live Nation, the gig’s promoters, were trialling ticketless concerts. Fans showed up with the credit card they used to buy a ticket, swiped it on a terminal and were admitted.
It proved successful and is now certain to be rolled out further across the live environment. Notably, it opens up new realms of data capture and CRM for the sport and leisure sector. Now when buying a ticket, there is an incentive to provide personal information and give permission to be contacted - to receive an SMS message in case of cancellation, for example - which does not exist if you simply hand over cash at the box office.
This was demonstrated when the Stock Aitken Waterman 1980s showcase gig in Hyde Park had to be called off due to waterlogged conditions. Punters will have welcomed early contact to let them know, rather than showing up just to be disappointed. It is a shift taking place right across the sector, especially among football and rugby teams.
“We have to lead the fan down the path away from just turning up with a tenner to buy a ticket,” is how Kevin Smith, commercial director at Bristol City FC, puts it. “We understand their loyalty and reasons for attending. Now we want to know who they are and give them a reason to buy their ticket before 2.30pm on match days. That is a change of culture.”
Smith was speaking during a panel discussion at the Beyond CRM in Sport and Leisure Forum, staged in July by Green 4 Solutions, a market leader in sports CRM systems. Across the presentations from a wide range of football and rugby teams it was clear that understanding fans, by capturing their data through both CRM and ticketing, is critical to the new commercial realities of sport, even if it is a very different approach from what has been done historically.
“It is the right thing to do from the point of view of our fans, our club and for the data. It is a bit of a pain at first, but it is the right thing to do and is in the interests of all. CRM means nothing in itself to the fans - and it shouldn’t. It shouldn’t be visible at the front end, it is just intrinsic to the job,” said Smith.
To encourage this shift in ticket buying, the club ensures fans who have registered and bought online get offered the best-priced ticket available when they book early. Staff are also incentivised to recognise that data capture is not an after-thought, but is essential to making a sale. This happens at every touchpoint in the club, from ticketing to merchandising and food and drink.
Clubs are being driven towards customer loyalty as a revenue stream for a simple reason - the new Financial Fair Play rules being imposed by the FA are forcing them to try to balance their books. Incremental income from selling a match-day scarf, drink and food will be a part of that.
CRM may seem alien in the UK’s footballing culture where loyalties have been tribal, rather than elective, and match-day routines have long been oriented around eating and drinking in pubs near the ground. In the US, there is no embedded culture, which creates a different challenge - how to get fans engaged and loyal.
Seattle Sounders FC, a Major League Soccer franchise which only started out in 2002, has an ambitious plan to become a cashless stadium by 2013. It already has the highest number of season ticket holders at 32,000 - a long way from its average gates of 3,300 in a 67,000-seat stadium during 2008.
Bart Wiley, director of business development at Seattle Sounders, says the key has been to steadily take fans along with the plans. “A few years ago, we were looking around at cashless card systems and offered cards to our season ticket holders - 11,000 took them up. That gave us a great test group.”
The club had the classic issue of the majority of fans arriving just before kick off, so it began to change behaviour by offering 30 per cent off food and drink for early arrivals. Initially, only 2 per cent of holders swiped their cards to pay, but this has since risen to 32 per cent.
For his club, Wiley points out that evolution has been important. Elsewhere, more revolutionary approaches are possible. “I asked Manchester United, where all their season ticket holders are on cards, what they did to make that happen? They said, ‘we just told them we were changing’. We couldn’t do that,” he says.
Instead, Seattle Sounders has tried to use surprise-and-delight tactics to change behaviours. Fans who attended the first eight games and bought 50 dollars-worth of food, drink or merchandise had a cash reward loaded onto their card, for example. Overall sales have risen by 16 per cent among this group.
The club is going even further with its CRM. At the end of this season, fans will get to vote on whether the general manager has his contract renewed. Seattle Sounders is the only football club in the world to have given this degree of power over to followers.
The club has the advantage of an owner and board who understand the value of customer data and CRM. Not all sports and leisure businesses are starting on the front foot in this way. In some cases, they may have been pursuing objectives that conflict with what is in the broader interests of the sport of league.
Samuel Serck presented a ground-breaking example from the Jupiter Pro League in Belgium. “Clubs in the league were looking for CRM solutions and there was competition between them to get the best solution and get the most out of it. Their fear was that they wanted a system, but there were high costs and a big upfront investment,” he says.
Remarkably, the league got the clubs together and persuaded them to agree on a common set of needs and objectives, then set out to licence a centralised CRM system. “We needed to establish a common vision, which was the need for better fan relationship management. Previously, clubs had been gathering data in separate databases from ticketing, accounting, merchandising, and these were often just on Excel,” recalls Serck.
Jupiter Pro League worked with Edam Business Solutions to implement a central Green 4 Solutions CRM system. “That scale gave us an advantage to negotiate on price. We set up a CRM user group from the four most involved clubs to develop the specification,” he says.
The league has introduced a single, central database and system, but with clubs’ fan data in partitioned sections secured from each other and with the ability for each club to add extra modules and bespoking of their own choosing on top. Access is Web-based and supports mobile devices. As well as delivering the benefits of CRM to each of the 16 clubs at a more affordable price, the league itself now has access to aggregated, non-personal data. “We will be able to understand what is happening across the whole database, for example, the profile of football fans,” says Serck.
The idea of the clubs in the Premier League agreeing to a similar co-operative approach might be unlikely. But Jupiter Pro League was starting with the advantage that it had already introduced a common ticketing system for all clubs. By the time the new season began in August, all 16 clubs were expected to be live on the system, having uploaded their existing fan data and introduced any bespoke modules they might require.
Sports and leisure companies are starting to recognise the importance of gaining a more holistic view of their customers, especially if there are multiple revenue streams they need to understand (such as tickets, merchandise, food and drink). Data is at the very heart of this development, provided organisations put the right solutions in place.
“When you join up your retail, ticketing, food and beverage data into one place, you start to gain an understanding of your customer - what drives them to come to games, who they come with, how much money they spend - so you can engage with them on a more relevant, personalised basis,” says Peter Oliver, owner of Green 4 Solutions.
As he points out, a season ticket holder of 20 years’ standing is a very different type of customer to a ten-year-old going to their first game, as is how they will engage with a club. “The more that ten-year-old likes the experience, the more they will talk about it in social media. So then you can make offers and content for them to share with their friends,” says Oliver.
Achieving this type of engagement is critical in highly competitive markets, such as family leisure, which is the primary focus of The Original Bowling Company. “Other leisure operators are using price to drive volume, but that can be damaging to yield,” says Steve Burns, a director of the company. “Weather has a big impact on our business, which is a big challenge.”
To counteract these factors, the business is using its CRM system to develop repeat visits and additional revenue streams. Ten of its 45 bowling centres are now online with the system, giving an opportunity to compare results against a control set.
One finding to emerge is that the company needs to shorten the buying cycle. “There is a higher propensity to return the longer it is since the last visit. So we have been offering a 50 per cent discount to people if they come back in the next seven days - from 13,000 offers, we generated £27,000 in incremental revenue the first time we did that,” says Burns.
The business is currently bucking the trend in the sector, which Burns notes is not just down to CRM and online reservation, but also to innovation into the centres themselves. A loyalty programme is now in the offing which should help to consolidate the promotional gains it has been making.
But while new revenue streams from customers and fans are starting to gain the attention of boards, especially in football clubs, they have a long way to go before they dominate discussions. As Mark Ashton of Tactical Change puts it, “if your CRM is generating a revenue of x, then the revenue at risk in the playing department is 4x.”
Put simply, the biggest asset and therefore financial risk in any club is the players on the pitch. Traditionally, decisions about which players to buy and sell have been made on gut feel, often involving tensions between the manager and the club owner (mention Andriy Schevchenko to any Chelsea fan and you will quickly get the picture.)
“The most difficult thing any CEO has to manage is emotion,” says Ashton. “It is too high when the team wins and too low when they lose. When it comes into decisions about players, mistakes happen.”
His company is applying a statistical approach to player development which will be familiar from the book and film “Moneyball”. Players are profiled against a range of characteristics which are constantly tracked and are then considered when buying or selling. “It can be used to underpin a club’s DNA - its entire philosophy from putting an eight-year-old into the academy through to the first team,” he says.
In football, this type of thinking is as revolutionary as cashless stadiums, yet both are becoming central to a more business-minded sport. Other leisure activities are following suit, intent on building additional revenue where once they just took ticket money. To understand the potential, just consider this - Kiss has just published a book of photographs (“Monster”) which is not just three feet high, it costs $4,299. Knowing which fans are likely to buy it will ensure copies do not just end up in Gene Simmons’ garage.