The Suitest Sale You Can Make
Mon, 07/01/2013 - 19:32 — Steve DeLay
THINK OF A SUITE LIKE A COUNTRY CLUB MEMBERSHIP...PAY FOR WHAT YOU USE
One of my all-time favorite movie scenes is from Glengarry Glen Ross.
You know the scene where Alex Baldwin goes berserk on a bunch of sad-sack salespeople trying to sell land. Some tremendous actors take his abuse, Jack Lemmon, Ed Harris, Al Pacino. He rattles off a bunch of lame excuses for the salespeople on why they can't sell. He even imitates the salespeople tossing back a few shots at the bar as they complain about their woes.
These days, I'm starting to think suite salespeople are in the same boat as those land salespeople from Glengarry Glen Ross.
We've all heard the reasons why nobody wants a suite any more:
- Too expensive - "We can't own a suite when we're laying people off."
- Can't use the tickets - "We have too many unused tickets. They go to waste. Cancel the entire suite."
- Owning a suite is too hoity-toity - "We don't want to seem like we're showing off to our clients and employees."
- Food cost too much - "We like the suite but the food costs too much. We want to bring in our own food or we're going to cancel."
- Change your suites in to theatre boxes. This gives fewer seats for someone to buy. Good idea but expensive capital investment to create. And, you still need the sales infrastructure to successfully sell them.
- Give them free food and drink credits. $10,000 in food credits. Nice, but it feels more like throwing a deck chair off the Titanic. $10K in food isn't going to do much to make a $200,000 suite purchase more palatable.
- Special networking events, mix and mingles etc. Good idea to help make it seem like they are driving more business. Is it worth $200K?
- Use of the facility. I like this idea. Let them use the stadium or arena for free for a company picnic, VIP client event or some other activity. Now you've moved from just client entertainment to HR and marketing. Expand the value proposition for the company.
Blah, blah, blah, blah...
SO WHAT'S A TEAM TO DO??
Here's some of what I've seen.
Here is another idea we launched in Frisco, TX when I was with Mandalay. We had a AA baseball team with 30 suites in a market where the Cowboys had 300 suites, Rangers 100+ and American Airlines Center 140+. We also played 70 baseball games in the scorching summer Texas heat. Not exactly an ideal environment for outdoor entertaining.
NO SUITE TICKET LEFT BEHIND
We patterned it after a country club membership. At a club, you pay a set monthly fee and then pay for food, drinks and golf cart usage based on how much you use. For our NO SUITE TICKET LEFT BEHIND program, a client paid a yearly 'access fee' and then paid for each ticket actually used.
Stay with me on the math here.
We had 70 games and a suite had 16 tickets. Our normal suite ticket usage was about 70%. Clients on average used 784 tickets for the year (70 games x 16 tix x 70%) The price of a suite was $70,000. Instead of charging the suite buyer all $70,000, we charged an access fee of $20,000. Then we charged $63.75 for each ticket used.
If the client used their normal 70%, we received $50,000 in ticket fees (784 tickets x $63.75) Under this scenario, we got our full $70,000 but the client felt better because they only paid for tickets they used. Also, their total investment was capped at $70,000. If they used more than 70% of their tickets, those additional tickets were free. We didn't charge them more. If they used less, we only charged them for what was used.
We eliminated the biggest sales objection a suite prospect would give us. "I can't use all those tickets. I'd be wasting money." With this program, they only paid for tickets they used. We sold six suites in one selling season using this program.
"Hold on there pal," the Naysayer would shout. "What about all those people who already had a suite and wanted this deal?"
"Sell it to them," I would say. And, get them to extend their contract. Remember, you're in the long-term relationship business. Sell the customer the product that makes the most sense for them, not what's necessarily best for the team.
"Wait a minute," the naysayer sputters. "What if they don't use their tickets and we fall way below the numbers we want?"
In that case, I'd say we were lucky to have them pay us the license fee and for the tickets they used. It's also the team's job to make sure the suiteholder is regularly using their tickets. This type of program takes constant monitoring.
One caveat I will add. This program is best used when you have 50% of your suites unsold. Don't do it if you have just 3-4 suites available. You should be able to sell those through good, fundamental selling. But if you have a boatload of suites to sell, remove the biggest objection you face by trying NO SUITE TICKET LEFT BEHIND. I would try it out if I was with an NBA, NHL or MLB team. If you try it, let me know how it works.
Steve DeLay has worked in the sports business for more than 20 years with teams in the NBA, NHL, MLB and minor league baseball. He works as a sponsorship, ticket and premium sales consultant for pro and college teams. He can be reached at email@example.com or on Twitter @SteveDeLay2.