Wednesday, July 29, 2009

Death by Free Ticket Giveaways

Watching Larry Smith's presentation on the Montreal Alouettes at the John Molson Sports Marketing Conference at Concordia University in Montreal last summer reminded me of some of the most important rules that can never be stressed in the business of sports. The biggest rule is to never, ever give your product away. Unfortunately, it's one of the most common rules, a rule so abused that it has contributed to the collapse of major sports brands.

Advocates of free ticket giveaways will argue that it puts people in the seats, giving the impression that there is a demand. That the people who have free tickets will spend money on food, programs, and merchandise. This is all true, but there are long term consequences for these irresponsible, short sighted decisions.

If people are given enough tickets, their value perception of those seats will be zero. Even if the team is doing well and competing for a playoff spot, these people will be sitting at home, waiting for their annual or monthly pair to arrive in the mail. If the team is doing poorly, they will apathetically make decisions about whether or not to attend the game at all, causing their value perception of the game to be negative--that their time at the game is not worth their time doing everything else. And when people get things for free, or believe that something is worth it, they don't keep it within themselves: they tell everybody about it. They tell them about how they always get free Wizards, Rays, or Blue Jackets tickets. And the next time that friend considers going to a game, they will also wait, because they might get those tickets for free. Or worse, they'll feel stupid that they ever paid money for their ticket when their neighbour got them for free, and will resent the team entirely.

When the Steelers and Dolphins visited Rogers Centre last winter to play the Buffalo Bills in the first year of a 5 year, 7 game Bills in Toronto series, officials priced themselves way beyond what the market was willing to pay for the tickets. With the least expensive seat well over $100, officials realized in the days before the game that attendance would not reach anywhere close to capacity. In doing so, they gave free tickets away: 15,000 free tickets for the Steelers game alone. Tickets went to promoters, who handed them right to their clients. In one case, my friend Jason was given a pair of upper bowl seats for purchasing a pizza. At the game, the guy sitting next to him was lamenting his purchase of $200. Then Jason told him how much he paid for his ticket. You think that fan will ever come back? Not a chance. It didn't help that the papers ran this free ticket giveaway story on their sports section front pages the very next day.

Giving away free tickets is the drug of sport marketers. Short term high, long term consequences and enough abuse will put your brand at risk of losing all its value.