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.
