Breakfast With Bernie

Should you outsource ticket sales?

Written by Bernard Mullin, PhD
@bernard_mullin
September 4, 2018

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Why do sports organizations outsource their ticket sales operations?  Scratch that.  Why do companies, in general, outsource?  Companies outsource because of the absence of expertise, time, energy, and resources to successfully execute the task internally.

Think about collegiate athletics, for example, and the number of items that are usually outsourced: food & beverage, media rights/sponsorships, licensing, parking, photography, travel logistics, advertising, printing, digital & print marketing collateral, and so forth.

TONS of outsourcing. 

One critical area frequently overlooked is the ticket sales function. How do you determine the feasibility of outsourcing a function as important as ticket sales that is managing the lifetime asset value of your fan base?

My suggestion is to conduct an internal audit of the ticket sales department. 

  • LEADERSHIP TEAM
    • Does your current team have history and expertise to lead a sales team effectively?
    • If you currently have a team in place, is leadership “raising the game” of the team professionally and personally?
  • RESOURCES AVAILABLE
    • Are you able to get the necessary positions funded? Best practices suggest the following:
      • 1 Service Consultant per every 1,200 season ticket account holders
      • 1 Sales Consultant per every 7,500 contacts you have in your database and/or 1 Sales Consultant per every $100K of empty seating inventory in your venue per season
    • Do you have the proper technology necessary to develop and execute a sales program?
      • If so, is that technology fueling the sales team with data insights to make them more productive and successful?
  • FINANCIAL EXPECTATIONS
    • What revenue goals and types of budgetary constraints do you have? (Remember to add in approximately 35% for benefit costs on all base pay, commissions, and bonuses you budget. In many cases Aspire has seen University overhead allocation exceed 50%.)
    • Do you have the proper commission structure to motivate your sales team?
    • Does the University permit commission and bonuses to be paid to employees?
  • TIME MANAGEMENT
    • Do you or your current leadership team have the time to recruit, manage, train, and lead a sales team effectively? Running an outbound ticket sales operation is a labor-intensive effort which demands daily executive team involvement to ensure the highest level of staff motivation and performance.
  • RISK ASSESSMENT
    • What is the risk of outsourcing?
    • What is the risk if I do not outsource?
    • What are your projections for the next three years with and without outsourcing? These projections are only as good as the data that goes into them. Be realistic.

Given that Aspire’s executive team has worked at the highest levels of major sports organizations including the NBA, NHL, NFL and MLB, we understand the hurdles you are facing and are here to alleviate the confusion behind outsourcing ticket sales.

What are sports organizations trying to accomplish by outsourcing their ticket sales operations?

  • Significantly grow ticket-related and donation revenues
  • Stop season ticket holder decline and increase retention rates
  • Grow overall attendance, specifically paid attendance
  • Increase ticket and/or donation yield
  • Improve customer (fan) service
  • Strengthen brand perception from high attendances and higher fan satisfaction
  • Better understand fan insights and behaviors
  • Tap into an immediate “Best/Next-Practice” network

Sounds familiar, right? As a sport executive, those are ALL of our goals.

However, where do you find the time, resources, and expertise internally to accomplish all of them?  Generally, you do not.  You bring in Aspire – the global leader in outsourced ticket marketing, sales and service.

There is always the option to find or allocate more resources to keep the operation in-house.  The assumption is that you keep the operation in-house to mitigate the risk the organization incurs, but are you minimizing risk or minimizing revenue opportunities?

outsource

Photo credit: Star Tribune

Tickets rarely, if ever, sell themselves except in the past for the strongest brands. To quote Ryan Dillon of Minnesota Athletics from the most recent article in the Star Tribune, “How plunging ticket sales have changed Gophers sports”, “You can’t just open the doors and expect people to show up.”

A skilled, outbound proactive sales team is essential.

Think about it this way. Your fan base is your most valuable asset, arguably on a par with your players/ athletes and coaches. If you are losing (churning) 25% of your fans each year, then you are retaining 75%. Therefore, your Lifetime Asset Value (LAV) is 4X (25% churn means the average season ticket holder stays 4 seasons on average). However, if you reduce churn and retain 90% of your season ticket holders (an improvement that Aspire has accomplished for many properties), then the LAV of your fan base is 10X.

Churn Rate %

Retention Rate %

Customer Lifetime Value (CLV)

25%

75%

4 Years

10% 90%

10 Years

Aspire’s FRMC (Fan Relationship Management Center) Leaders are not individuals who are sent to campus to fend for themselves. They are backed by Aspire’s 50+ sports industry leader peers from over 45 properties that are implementing “Next-Practice” (Future Best-Practice) solutions for overcoming the very same obstacles your organization is attempting to solve right now.

If there is still the lingering question of why outsource to Aspire over the competition… Call our partners and they’ll tell you the answer. 

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