Part 1 in the four-part series, “Some Thought For Sports Industry Executives“
As a practical matter, there are four big concerns on the mind of every sports executive:
- Growing the fan base
- Improving your understanding of who the fan base is
- Using that information to grow revenue
- Providing a superior experience to maintain that growth
The truth is that all of those concerns are all interrelated. Growing the fan base first requires identifying and understanding fans – not only those who bought tickets – but all fans globally with passion for the brand. Then, armed with that information, it will be easier to attract and retain fans by delivering a superior personalized experience that subsequently increases revenue.
According to PWC’s 2018, At the gate and beyond – Outlook for the sports market in North America through 2022, revenue for media rights in sports has surpassed gate revenues for the first time. PWC predicts that the compound annual growth of media rights and sponsorships will greatly outpace the growth of merchandising and gate revenues. Ticket sales and game attendance have leveled off, or even decreased in some instances, with gate revenue predicted at an anemic 2.2% growth.
Clearly, this is an issue that needs to be considered. It’s particularly alarming because the stagnating game attendance is happening in a period of league expansion and new facility development. The good news is that the sports market in North America overall will see a 3% growth rate from $69.1 billion in 2017 to $80.3 billion in 2022.
So the natural assumption would be that fans are simply becoming more inclined to consume sports entertainment via digital media rather than engage in the stadium experience. And while that may be true, there is a more fundamental shift happening. While the Greatest Generation and the Baby Boomers enjoy their senior years, the largest part of the fan base is now composed of Gen X, Millennial, and Gen Z consumers who are adept with multi-channel digital media engagement. Not only do they consume sports differently, but they live life differently.
There are more sports fans than ever, but it’s harder to hold their interest. Surprisingly, it may not be because they lack a long attention span, or that they’re fickle in their fandom. According to a report by McKinsey, the issue may be the amount of competition vying for it. The number of fans is growing, but they’re not interested in lopsided or inconsequential games when they can easily find an alternative, and they fear they may be missing something better on another channel.
Considering this, it would likely be shortsighted to think of fans as passive, detached, or uniformed. In days gone by, fans had to rely on newspapers or trading cards to get insight into the game. Today, however, there are myriad ways to learn more about a sport, a team, or a specific player. Further, fans are better at multitasking now, and they’ve become voracious consumers of content. Consequently, fans are more sophisticated, discerning, and demanding than ever, which means the sports industry will have to keep pace if it is going to grow the fan base.
Time marches on, things change, customers change, and the industry must change too. It takes more than a good win/loss record to hold the attention of younger generations. Now more than ever it’s necessary for the sports industry to provide a captivating beginning-to-end experience – in and out of the venue. Exciting content, great customer service, a user-friendly website, promotions, statistics, desirable merchandise, superior concessions, an engaged and exciting in-venue experience, convenient parking, and all the rest, are no longer ancillary to the action on the field; they have become the core of the business. A well-run sports organization can be successful both financially and in terms of growing the fan base regardless of success on the field – if they deliver an experience that stands out and compels fans to return.
The first step toward becoming a well-run sports organization is having a better understanding of who the fans are and their behavior. In my next blog, I will discuss how to learn more about customers.
For more on customer engagement strategies, read The Post-Digital Age: Spending Quality Time With Customers.