Price is only an issue in the absence of value*

The title of this little ramble is one of my favourite phrases. I will often use it when I am talking to sales people who have lost a deal and cite that someone came in an undercut us. Naturally, there are a percentage of deals that are lost purely on price – customer A has a fixed budget and they will look for the lowest price that meets their need. But in most instances, a sales person hasn’t displayed the value well enough to justify the price.

Take another example – a very well known door bell company has just announced an increase in their annual digital storage price of almost 100%. The new annual cost is still less than £3 a month, but to justify the massive, inflation busting hike, they promised “new features” to all subscribers. Except the new features are new features at all – they are exactly what customers have access to today, with a small variant. For a price rise of nearly 100% there needs to be real justification that the value a customer is going to get is going to significantly, not marginally, increase.

But let’s talk about ticket prices for sport. This week there has been a lot of talk in all forms of media about ticketing issues. The ticketing at the Champions League final in Paris has led to an international incident, with a full-blown independent review due to start to look at the major issues faced by Liverpool fans. Interestingly enough, on Wednesday night, over 87,000 fans attended the Finalissima at Wembley, between Italy and Argentina with no noticeable issues with regard to entry into the stadium – perhaps a combination of better crowd control and the use of digital ticketing?

But ticket pricing has been a warming hot topic this week for both the Non-League game and in cricket. On Sunday, the National League Play-off Final takes places at The London Stadium between Grimsby Town and Solihull Moors. The decision to hold the game at the venue is one for another discussion but to add more costs to an already expensive day out for fans who have to travel hundreds of miles to get to London has been the ticket pricing.

The National League set the minimum ticket price at £40 for Adults, then added a £3.99 booking fee and £1 for sending the tickets via email. £44.99 for a Non-League game. To put that into context, tens of thousands of fans saw a masterclass by Lionel Messi on Wednesday at Wembley for £25. Likewise, the Premier League agreed back in 2019 to cap away ticket prices at £30 for three seasons. To be charging 33% more to watch two Non-League sides than a Premier League game is unbelievable. To go back to my title, where is the value in the £44.99?

The National League Play-off Final is one of, if not, the last domestic game of the season. A large number of neutrals attend the game to get their final fix of the season. Attendances are normally around the 18,000 mark, although there are some outliers – 2015 saw 47,000 for Bristol Rovers v Grimsby Town, whilst in 2019 only 8,000 saw Salford City beat AFC Fylde. But with minimum ticket prices more than double then normal National League admission fee the ground will look sparse.

Such has been the backlash from the clubs, and fans of the game, that title sponsors Vanarama have stepped in and tried to help financially both clubs, where supporters simply can’t afford to attend. Whilst a percentage of the gate receipts are shared back with the clubs in the league, the priority should not be about making money for the rest of the league, but giving the clubs fans who have reached the final the opportunity to savour promotion to the Football League. A lower ticket price means more fans attend and thus more revenue and publicity is generated.

Turning attention to cricket now. The MCC and ECB announced this week that there were over 15,000 unsold tickets for the first test between England and New Zealand, starting today. That is almost unheard of – the Lords Test is one of the most famous sporting events in our calendar. Granted, it is the Bank Holiday weekend, there is a tube strike and the weather is a bit iffy, but the ticket prices of £70 up to over £200 for a single day’s play is another reason. It used to be the case that fans would see 90 overs plus of play in a day but unpunished slow over rates means that isn’t the case anymore. Even when teams are fined for that, it isn’t them who suffer but the fans who see less cricket. Lords is a fantastic venue for cricket but pricing out the fans who create the atmosphere will lead to sterile environments.

It isn’t just Test Matches where ticket pricing is coming into focus. The T20 tournament started ten days ago and some counties have really gone over the top with their ticket pricing. Somerset are charging up to £46 for an Adult ticket for their games (the minimum price if booked in advance for some of their games is still £36!), whilst at the Oval it will cost you up to £37 to pay on the gate for some games. Contrast that with £15 maximum for games at Old Trafford to watch Lancashire, or £19 at Edgbaston to watch Birmingham Bears. Unsurprisingly, there have been empty seats, and quite a lot of them, at games already this season, where in previous years we’ve seen sell outs. It isn’t too late for the counties to do something about it and create ticketing solutions that provide economic value and result in full grounds and atmospheres that encourage fans to come back.

Sport needs to understand that the financial pressures on fans means they have to make a choice. It is no longer a given that the unconditional loyalty of fans means they will simply pay whatever the price is for a ticket – the economic climate has shifted our financial priorities and clubs need to realise that. Price rises are a given at the moment but clubs need to think about what additional value they can give to mitigate that additional cost – value doesn’t necessarily have to mean expense.

What is clear that a blinkered view to increasing prices above an acceptable level is a lose-lose strategy. Clubs/organisations may see the $$$ signs when they are thinking about their ticketing strategies but in the long-term it damages the relationships with their loyal customers and as we know the cost of acquisition for a new fan is far higher than retaining an existing one. Economics 101.

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