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Podcast - December 2013
Learning From Tech Companies
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One of the greatest strengths of the sports industry is the willingness of its professionals to share best practices, ideas and concepts. Despite competition on the field, sports marketers are usually eager to lend a hand to a counterpart with another team. The common goal of succeeding in a heavily nuanced profession, with the same pervasive challenges and obstacles present in every game and market, bring sports minds together.
While sports marketers may be well on top of what’s going on around their league, sometime the laser focus on what will and won’t work within sports prevents a full appreciation of other industries. Maybe it’s the pressure of the season, the demands of the multiple hats that most must wear, or even a lack of desire to expand our business approach beyond the realm of what we have come to know best. Whatever the reason, it’s just as important to understand the successes and failures of companies in other trades as it is to stay current on sports business trends. The more influences you are exposed to, the more diverse your business knowledge is, the more curious you are, the more valuable you’ll be.
Tech companies are among the easiest to learn from, since their entrepreneurial philosophies often mean they aren’t afraid to push the envelope and test the boundaries of traditional business practices. Though seemingly disparate on the surface, the sports and technology industries actually have a lot in common. Both essentially aim to connect people, be it through a ballgame or a social network. Both are often entertaining diversions, making daily life more enjoyable by providing an escape or a simpler way of doing something. They are both dynamic, constantly changing industries where creativity thrives.
From Google’s renowned corporate culture to Apple’s unique ability to hype a product launch, sports teams need only look to the biggest names in the industry for inspiration. Here is a closer look at three of those companies and what can be learned from them.
500 million active users and growing. In the United States alone, users spent 41.1 million minutes on Facebook in August- almost 10% of all time spent anywhere online during the month. The numbers are so ridiculous they’re almost impossible to comprehend at times. Everyone would love to have that kind of customer base, right? Well imagine what it’s like when you want to make changes when you’ve got that kind of following. Facebook just rolled out some layout alterations and announced more major profile updates that are on the way. The response was as predictable as it was immediate. People naturally resist change, but people vehemently resist changes on Facebook. No matter the irony of people complaining about Facebook via Facebook, the site has become so entrenched in our lives that even the simplest of adjustments sends folks into a tizzy.
How many businesses would risk so much initial backlash, for any reason? That’s the beauty of Facebook though. It’s always changing. Despite knowing what kind of reaction they’ll get, their strong belief in constant development and growth repeatedly leads them to new heights. This isn’t the first time they’ve done it- remember when you were a “fan” before you could “like” things? The bottom line is that Facebook users will adjust and using the “new” Facebook will become as routine as brushing their teeth. For Facebook though, this is necessary product maintenance that keeps them relevant. Much like any relationship, things will get stale if you don’t make improvements or find ways to deepen connections. Sports clubs face similar recoil when making big changes, since people hold special places in their hearts for their team. There are times that certain things need updating though, whether it’s a new mascot or logo or doing away with a once popular promotion to make way for new ones. If you’ve done your research and are making the change for the right reasons, your fans will support it in time. Facebook teaches us that in order to strengthen bonds with customers, teams must persistently pursue improvement and continuously develop ways to enrich the fan experience- even if you get a little negative feedback along the way.
Unlike Facebook, most people can’t tell you who the CEO of Zynga is or even what the company does. But if you are one of the 500 million people on Facebook, you’ve seen them in action. Zynga is the mastermind behind all of those messages you get from friends asking for your help building a new town hall or requests for corn or wood or whatever else they need to get to the next level of FarmVille. They are the creators of a gaming empire which brought in $279.1 million of revenue in the second quarter of 2011 alone. Through titles like CityVille, Mafia Wars, Words with Friends, Zynga Poker and the aforementioned FarmVille, Zynga has revolutionized the way that businesses have monetized social media. Sure, the most literal way to learn from a company like Zynga is to embed your own game into your Facebook page, like the Boston Celtics’ “3-Point Play” which collects invaluable fan data. However, it is the way in which Zynga games attract people where the real lesson is gained.
Above all else, Zynga’s games are designed to be incredibly addicting. They have simple concepts, they look great, and they are free- to an extent. Your time playing is limited however, by lack of resources or energy points that are exhausted quickly. This drives the impetus to return daily, since you can’t just sit there and play forever (unless you pay of course). So, loyalty is encouraged, as is social interaction. Asking friends for help allows you to advance to levels you would other wise have to pay for. Teams must learn to channel this ability to keep fans wanting more. Often when we come up with a great in-game feature or successful promotion, we want to trot it out every game. Zynga’s model would suggest doing the opposite. By limiting the performances of your popular dance team or running a ticket special less frequently, you will drive up demand and reduce the likelihood that they’ll lose their luster. You must find a way to make your games addictive. You have to make fans feel like they can’t miss what might happen next. If you can create that sort of vibe, you’ll be able to drive a much larger social conversation where fans feel the need to share their experience with everyone they know. It’s important to honestly ask yourself if you are providing the type of fan experience that people can’t get enough of.
In what could go down as one of the biggest marketing blunders ever, Netflix recently announced that their DVD rental and streaming services would become separate entities. Customers could choose one delivery method or the other, but if they wished to keep both their monthly bill would increase by 60%. They lost over a million subscribers in the weeks after the move and severely tarnished a brand built on years of customer-first practices.
Netflix’ first mistake was severely misjudging the delivery preferences of their customers. Most subscribers felt that neither service by itself was worth the price they previously paid for both. Sports teams can learn an important lesson here, since clubs rely on several channels to deliver their message to fans. While it may be most enticing to focus communication efforts on social media, which is cheap and immediate, there are still fans out there that do things the old fashioned way- a lot of them, actually. You can never abandon the personal touch of a phone call or an in-seat visit. Even the email newsletter seems archaic these days, but it remains an extremely effective way to reach most people. An over reliance on either approach leaves a big segment of the market feeling neglected.
A more complicated issue presents itself when it comes to price increases. Fans will see right though greedy, short sided cash grabs. They know the difference between decisions made to make money and changes made to improve the quality of the product they’re being offered. If you must raise prices, there are ways to do it without insulting your fan base. Variable and dynamic ticket pricing models may bump up the cost of tickets for high demand games, but fans understand paying a bit more to see the Yankees host the Red Sox versus the Mariners. Another way to raise prices more thoughtfully is to offer an alternative. For instance, if you increase the cost of an individual ticket purchased on the day of a game but freeze the price of the same seat bought in advance, fans will be less likely to get upset. The Netflix example shows that you cannot overestimate the value of your product, but more importantly, you can never underestimate your customers.
Scott Carter has nearly a decade of marketing, promotional, and game entertainment experience. As Senior VP of Marketing for the Fresno Grizzlies, Carter guided the Triple-A franchise to multiple GameOps.com "Best Of" awards including Best Team Operations in 2008 and 2009. A Southern California native, he has also spent time with the Rancho Cucamonga Quakes and the NHL's Anaheim Ducks.Repeat Customer Success Cycle
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