Management by Baseball

Baseball has a ton of marketing lessons for people in non-baseball organizations. Since Bill Veeck's death in 1986, most of those lessons have been obverse...that is See this...don't do it! One of the reasons I don't write a lot about marketing, one of my own areas of strength, is that lessons from baseball would almost all be counter-examples, a gloomy Trail of Tears.

But last week the Minnesota Twins exploded out of the little "the way it's done" box major league teams' marketing departments limit themselves to, and it's a clever, positive campaign that's worth measuring your own marketing against.

How often does an organization nail their market at one moment in time and then, when demographics change, slowly lose touch with the needs of many of the individuals over time? Lots of times -- in fact it's normal, even for the rare organization that is able to nail its market. In some ways, that very success can be the enermy of change, because it's fairly normal (though not useful) for successful organizations to resist changing the things that made them successful, even when the environment in which the approach was successful has changed.

The Twins have adapted to a shift in the demographics of season ticket holders, impelled perhaps in part because of difficulty selling season tickets. The team has been very successful (three decision titles in a row, albeit.a division generally regarded as weaker than average), but the owner has been a fount of bad publicity, cajoling, then arguing, then threatening for a publically-subsidized new ballpark. In his defense, he wasn't asking for a deal any lusher than many other contemporary ballpark deals. He just seemed, under pressure, to appear less graceful in his approach tah, say Godzilla dancing cheek-to-cheek with Tokyo. But the team overall is a very good product and they maintain a productive farm system. If any team struggling to sell season tickets is in a position to benefit from a marketing breakthrough, I think it's the Twins.

GAS, WATER, ELECTRICITY, SEASON TICKETS

Season ticket holders are usually viewed by major league teams the same way utilities view their customers: a milk cow. The customers are desired, but there's very little differentiation in services because like a gas utility, in almost every place where there's a major league team, they have a monopoly for the product they offer (Chicago & New York exempted to a large degree).

As a result, while these customers are valued by the teams, they are also turned into commodities. The standard season ticket package is X seats for all home games. Teams that have a difficult time meeting their sales goal with the vanilla approach tend to add small variances, say X seats for Y (a # fewer than all) home games. W-o-w.

The challenge is that culturally, both season ticket sales package designs presume one of two things: Season ticket buyers are corporations who will dole out tickets to execs, favored customers/suppliers and key employees, or they are people who have their lives planned out for a coming Spring-Summer-Fall. That's only true for some of the potential market.

For the vast majority of people who buy tickets for multiple games during the year, neither of these scenarios work, but teams generally design & market season ticket sales to do what teams were doing when the marketing folk became aware of season ticket sales. "The way it's done".

Even when a team provides flexibility for the buyer who has schedule changes between the off-season when they buy the ducats and the dates during the regular season when they would be using them, they tend to treat the customer as a utility would...a milk cow to squeeze some more juice out of. For example, some teams have web sites where they allow the season-ticket sellers to scalp their own tickets legally if they give the team a cut of the take (effectively allowing the team to sell the same ticket twice). Moo up, Bessie.

COMPLEX CAMPAIGNS

The Twins have broken this utility model for their campaign to sell 2005 season tickets.

According to a Minneapolis Star Tribune story by Jay Weiner, the Twins are marketing about the most flexible sports ticket plan I've heard of.

Twins: Vouchers put ticket plans in hands of fans
Jay Weiner, Star Tribune
November 18, 2004

In an effort to boost disappointing attendance and to adapt to the forever busy lives of their fan base, the Twins have decided to let their ticket-package buyers devise their own schedules.

To get more customers to the Metrodome, the Twins have quietly established a plan that sports marketing experts said may be the first of its kind: Instead of tickets for a set amount of specific games, customers can now buy vouchers for, say, 40 tickets and then, when they desire, spread those tickets across whichever games they want, sitting in whatever available seats they want.

"Our research shows it isn't that people don't want to come out to our games," said Twins president Dave St. Peter. "It's a product of the culture we live in," St. Peter said. "Our core fan base is stretched more for time than they've ever been."

That's been reflected in Twins attendance, which didn't reach 2 million fans for the 11th consecutive season in 2004. [SNIP]

So, during a strategic summer planning meeting, Twins ticket sales director Scott O'Connell suggested the "Flex Plan." Under the plan established last week, each voucher is worth one ticket.

If, say, a customer buys the minimum 40 vouchers, he or she can go (alone) to 40 games, or 10 games with three family members, or five games with seven employees or one game with 39 friends. The exact seat within three different price levels will be determined when Flex Plan customers select their games. But a Flex Plan buyer could sit in 40 different seats for 40 different games, adding another mode of flexibility.

"Too often, sports franchises -- including this one -- do things one way because we've always done it that way," said St. Peter. "In this case, we're being realistic and reacting to what fans want." [SNIP]

The Twins, with only 8,000 full-season equivalent ticket holders last season, have more than 40,000 seats to sell every night to the casual fan who, the team hopes, becomes more committed by buying these vouchers.[SNIP]

"It may very well be the next wave of ticket marketing," said David Carter of The Sports Business Group, a Los Angeles consulting firm. "If I'm the Twins, I bend over backwards for these ticket purchasers. They represent the best potential source of incremental turnstile revenue."

Weiner's copy-desk trimmed out an essential detail: that vouchers cost $2 less/apiece than the corresponding ticket bought at a window.

Why is that important?

Because without the discount, the plan is almost identical to the normal routine of heavy buyers who are not season ticket-holders. A buyer like that might pick out a handful of games for which to buy some early tickets with some spares for buddies. Then for other games, just walk up to the window on game day. For a team like the Twins with empty seats more often than not, this is convenient plan that maximizes opportunity and minimizes cash otu of pocket.

The Twins flex plan gives the team a win because it can sell vouchers up front, getting the cash up front, and in exchange, it yields a little on price plus the buyer gets some additional flexibility. It's somewhat analagous to a stored-value card, though better for the consumer because she can't lose the credit. Each side in the transaction gets a little something.

PACKAGING THE PRODUCT

It's amazing sometimes how rigidly a seller will adhere to a delivery scheme through inertia, even when the model has always been broken.

I worked for a swell software company where one of the highest-margin products it had was a product that could not be used by a single user. The fewest people this networked program could use was two. The buying of a single unit would only be for an upgrade (where an existing set of users needed to add another user). Dozens of times every week, technical support received phone calls from people who had just bought one unit and couldn't do anything with it (imagine instant messaging where you're the only person who has it).

Resistance to change was overwhelming. They had always sold 1-packs. It didn't matter that a 2-pack required only another registration key (a slip of paper with another number on it), and would therefore cost about 15 cents more to make while nearly doubling the asking price, never mind it would cut down on angry or confused (or both) customers and those customers' wrath directed at clueless resellers and our own technical support. And this was software, not something hard to package like a power-drill or a workbench or a piece of furniture -- it was a book, a pamphlet, a card with a number on it and a disc. No-one needed to design new packaging.

It took over a year to even get the idea discussed. Ugly, but not unusual.

Decisions as to what to put in the box usually stem from earlier wisdom that was actually wise. The wisdom then loses some of its value over time, but systems and the people who run them fall into patterns they don't want to change.

The Twins woke up and tried something different from what teams have been doing since their executives started working in baseball.

Shouldn't you?