Guest Post from Steve Seiferheld of Turnkey Sports and Entertainment

Steve Seiferheld is the Senior Vice President of Consumer Research at Turnkey Sports & Entertainment where he oversees all members of the consumer research team. He received his BA in Statistics from Rutgers University, his MS in Statistics from Cornell University, and has since gained more than 12 years in experience doing market research through entertainment, professional sports, pharmaceuticals, and much more. 

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I’d like to tell you a story about Tina’s Lemonade Stand.  Tina launched her lemonade stand business in Haddonfield, NJ on Grove Street.  Business picked up quickly; sales weren’t bad.  Tina believed in the power of sales data and hence tracked her customers and how much lemonade they purchased.  Tina knew that her average customer bought two (2) glasses of lemonade per month.

Tina’s best customer was a gentleman named Bob.  Bob loved Tina’s lemonade, so much so that he bought 80 glasses per month!  Some on the way to work, some after a long bike ride – never a bad time for a glass of Tina’s lemonade.  Bob alone represented 35% of Tina’s lemonade revenue.

One day, Tina went shopping to Shop-Rite instead of Wegman’s and found a new brand of lemonade that would reduce her costs by 10%.  Naturally intrigued by the opportunity to reduce cost, Tina stocked up on the cheaper lemonade.  The next day, Bob came by to purchase a glass.  He took a sip, and thought “ewww, what happened to the lemonade?”  He politely smiled at Tina, took his glass of lemonade with him, and never stopped at Tina’s stand again.

Sure, Tina saved 10% on cost-of-goods.  But there went 35% of revenue out the door.  And why did this happen?  Because Tina failed to take into account the opinion and preference of her best customer.  Tina did eventually switch back to the old lemonade, but it was too late.  Bob’s new love was a Starbucks Grande Latte.

Sports teams could benefit from understanding this story.  What Bob was to Tina, season-ticket holders are to properties.  And what happens when sports properties don’t listen to their best customers?  Their best customers leave.  And especially for teams that have empty seats already, the loss of a season-ticket holder presents challenges.  The NBA season has 41 regular-season home games.  Lose one season-ticket holder, and now you need 41 new single-game buyers to replace that one body.  Sure seems easier to make one sale than 41.

It has become extremely easy to obtain feedback from all customer types, especially season-ticket holders or the like.  In fact, avid fans want to provide feedback!  Survey response rates for avid fans far outweigh less-engaged fans.  Just a smattering of research methodologies in use today:

- Online surveying of fans/ticket holders contained in the team’s database

- Onsite research of game attendees

- Social media data capture

- Fan panels

There obviously exists no obligation on the part of teams to ask fans for insight before making decisions.  We would certainly not recommend seeking feedback related to on-field personnel matters.  But as many businesses inside and outside of sports now realize, listening to the voice of the customer results in stronger loyalty and profits. 

P.S. – Tina eventually had to shutter her lemonade stand and found work as a food server at the Drexel dining hall.  She’s saving her money to eventually start a new market research consultancy.