To Discount Or Not To Discount…That Is The Question
Thu, 03/07/2013 - 22:10 — Mary Pink
There have been a number of discussions on discounting tickets lately. One thought is that ticket discounts devalue your product and that by discounting your tickets, you are hurting your brand. The theory is that you are training your fans to only want to buy discounted tickets because they become used to paying these prices. Discussions suggest we should price our tickets like Apple does their pricing strategy.
I would maintain that the Apple brand and a sports team brand are different when it comes to a pricing strategy. It is difficult to truly compare the two when it comes to pricing decisions. Apple is a static product that isn’t affected by wins and losses. Apple offers a unique product selection; while it has some competition, it has dominated the market with their offerings. Apple was the first to introduce a tablet like the iPad and their iPhone has faced limited competition.
On the other hand, in sports, you have to look at your team’s brand which is affected by wins and losses as well as other factors including weather, television and the competition for the entertainment dollar. When the demand isn’t there for your event, you should institute strategic discounts. You shouldn’t do ticket discounts for every game or your fans will come to expect it and it will devalue your product. Instead discounts should be utilized strategically and/or targeted to drive sales and attendance.
As an example, football ticket sales for Iowa State’s last home game have lagged in the past, even when we were in the hunt for the Big 12 Championship. Win/loss record (at times), weather and a televised game were factors that hurt ticket sales in the past. We have had to create special ticket discounts to drive fan support. We understood that if we held the line on our pricing, we wouldn’t have as many fans there to support the team, drive concession and merchandise sales, and further expose our fans to our brand. Are there some fans that decided to only attend our game because of the discount, sure. But did this hurt our brand? No. You have to build attendance and give people more incentive to purchase when you are up against hurdles.
You don’t need to use discounts on every game for the entire season. This is where you do devalue your product and start to train your fans to only look for the discounted ticket, as brought up by industry professionals who are against ticket promotions. As you build your product up to a certain level, ticket discounts can be eliminated for your team. For example, due to the success in building our football brand and driving attendance, we didn’t need to offer a special discounted ticket for the last home football game this year. We have discounted tickets in the past, however, our fans saw the value in our product and were willing to buy tickets without a discount. It has taken time to build the perceived value in our football tickets. At Iowa State, we have not seen a reduction in fan support or a negative impact due to strategic ticket discounts.
Sometimes, specifically targeted ticket promotions are valuable for your fan base. In a targeted ticket promotion, we offered our Jr. Cyclone Club (kid’s club) and their parents a discounted ticket to a men’s basketball game this year against Texas. We chose this game because of the additional ticket inventory due to our students being on break We chose to offer this discount for two reasons, one it was targeted toward a special group of people who were engaged with our product and we wanted to make them feel special and valued. Additionally, we chose a game that had a perceived value for our fans with a solid Big 12 match up on a Saturday afternoon. The promotion was extremely successful and we achieved a sellout. This sell out was important; we needed the attendance to help support our team and wanted to continue to build our young fan base for the future in our Jr. Cyclone Club program. As well, we looked to continue to expose our fans to our brand. Attendance played a factor in creating a great atmosphere, home court advantage, and rewarded a special group of fans.
Our strategic and targeted discounts are working. While attendance at many Big 12 institutions has seen a decline, this year in football, we ended with our best average home attendance with a team that finished 6-7 and last in the Big 12. In addition, our men’s basketball program has seen a growth in their home average attendance again this year, with several sellouts during the conference season. Our fans still see value in our product even after years of ticket discounts
Not every team has a high demand for their product. There are factors that affect attendance and in order to drive purchases, you have to create demand for your product when it isn’t naturally there. As I have hopefully shown, creating these strategic ticket discounts do not hurt your product or devalue your brand, in fact, if done correctly, they may actually help build your fan base and attendance.
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