Airlines, Sports And Dynamic Pricing

As Dynamic Pricing becomes a staple ticket pricing strategy in the sports industry, a primary justification is built on the success in the airline industry. While both have one thing in common, time-based supply and demand for seating, I’m sure most fans would say that their in-flight and in-venue experiences are not and should not be the same.

As quoted in The Wall Street Journal’s review of Mark Gerchick’s critique of the airline industry in his book “Full Upright and Locked Position”, “The problem with aviation is that for 50 years it’s been populated by people who think it’s this wondrous sexual experience,” Michael O’Leary, CEO of the ultracheap U.K. airline Ryanair, has said. “Really it’s just a bloody bus with wings.”

Is this the type of in-venue experience sports has in mind when thinking about pricing their product as a commodity and profit maximization?

We think a better approach would be to focus on the following motivators and explore ways of creating more lifetime value vs. viewing fans as “self-loading freight”.

What Sports Can Learn From Sears and Eddie Lampert

After reading the extensive Bloomberg Business Week article on Sears failing strategy, At Sears, Eddie Lampert’s Warring Divisions Model Adds to the Troubles , even though it focuses on heavy data use, one simple thought comes to mind, “Where’s the customer in this strategy?” Separate P&Ls, zero collaboration, no focus nor understanding of the customer experience and journey, all contribute to falling sales and asset valuations.

For us, the lesson is clear. It’s not a question of data use, it’s a question of the strategy driving that data use. Data is only as good as how it’s analyzed and put into action. Teams must focus on the complete customer experience. That experience starts in-venue with understanding how fans interact and make purchases related to that experience. That means looking at the “bundled” experience and knowing what fans prefer in their “bundle”.

Service Is NOT The Customer Experience

After just returning from the #ALSD2013 annual conference, I wanted to provide our point-of-view on one of the trends discussed, that being how Service is the Customer Experience. While we may be getting granular, we think that this definition is holding back the sports industry from really engaging with the customer on a personal, more intimate level.

There is no question that people, whether working with or tapping into technology, drive the Customer Experience. But Service should not be your employee’s point of engagement with your customers. Is basic operational performance considered Service? Is excellent operational performance considered Service? Clearly these are 2 different things, but does it matter from a strategic perspective?

Service is one component that typically becomes relevant when the Experience is not living up to expectations. We believe this is fundamentally true because Service by its nature tends to be responsive. We must wait for the customer to take action first before we can act, thus Service for the most part is REACTIVE. So is the difference between basic and excellent service a matter of speed and accuracy of fulfilling the customer’s request? For us, this is not enough.

The future of delivering a Awesome Customer Experience is grounded in ultimately knowing the individual customer (singular), and what each customer wants and desires. When we begin to understand the wants, needs and desires of individual customers, we can begin to anticipate and become PROACTIVE in our engagement.

In order to know what our customer’s want, we typically deploy 2 methods of understanding: 1. Ask the customer what they want (qualitative), 2. Know what action the customer takes (behavioral). The best picture deploys both methods. Without this knowledge, we cannot become proactive in our customer engagement.

Fundamental to behavioral understanding is deep and robust insight into what the customer has purchased in the past. This customer-centered purchase data provides visibility and understanding about customer action, and provides a platform for real-time, proactive engagement.