On Tuesday morning, like every morning, I started the day with a look at my email. Such is the modern world, and the joys of working within the Internet Services Market for a global company that the motto “if you snooze, you lose” has become one of our core values. As usual after discovering my online bank has been accessed and I need to “log in” to restore my access, that my penis can actually grow by 6 inches in just 28 days and of course the happiest news that I have won the
Spanish lottery AGAIN, I get to the GroupOn emails. The whole social discounting model is a great thing for consumers. Crap for retailer, but good for consumers.
People who buy these deals (and can jump through the respective hoops to actually use the voucher) do so because they are being offered something at a bargain price. They are rarely for things that you would normally pay full price for – hence why the retailers turn to GroupOn to fill capacity. Deals such as hotel breaks for 50% off (or more) become good deals, but few, if any, people would think that the deal/hotel was that good that they would return and pay full price. That is the fundamental issue with the whole concept. GroupOn (and other sites such as LivingSocial.com) are great for a one-off, but building loyalty is another issue.
I am used to seeing Fulham and Crystal Palace appearing on my GroupOn offers timeline. £10 tickets for Palace on a Friday night (“limit: 100 per person”) have made me smirk in the past. Few, if any people would take up the offer and return for future games paying full price (otherwise why wouldn’t they have bought for this game?). I would have thought that there are other ways to market tickets to niche sectors without having to resource to such drastic price cutting measures.
But today I was very surprised. West Ham were the “deal of the day” and before anyone says it, yes it was a slow new offer day. Tickets for West Ham v Watford (7th March 2012) were £40 for two (and £60 for 3, £80 for 4). As if that wasn’t enough to entice you in, the highlights included the fact it was “Close to Upton Park tube”. I am aware of the offers the club has been involved with so far in 2012 – discounted tickets for buying pizza in Dartford and leaflet drops in Charlton Athletic and Millwall supporter areas to name just two. But is this the right move for the club? And what are the issues of going down this route? To me it is three-fold.
1. The impact on the fans – Tickets for this fixture went on sale to Members back in December starting from £32. As with the game against Nottingham Forest where significant last-minute marketing was carried out to “boost” attendance, it wasn’t directed at the membership database. So one of the perks of membership is the ability to purchase tickets in advance of the general sale. It used to be the case that members also got a discount, but that privilege was removed last season. For this game (as it was for the game v Forest), members will have been penalised for buying early – a somewhat lopsided business model in terms of yield management. The impact on members in future is that they may delay buying their tickets because there could be offers like this. The impact of this for the club is that cashflow is delayed, meaning potential short-term pain.
2. The impact on the future – West Ham, under Sullivan/Gold/Brady, have become a club with grand ambitions. There is nothing wrong with that. You do not want your team to be content with just being also-ran all of the time. The whole Olympic Stadium debate was always (and still is) about them and their image, not the fans. In fact the fans have never been properly asked if they want to move. There has always been an assumption it was a given. Perhaps the original motives were simply to stop Spurs getting it, but I have never been able to understand the logic that says a club with a core support base of 35,000 need to move to a 60,000 stadium, let alone one where every seat offers a worse position than Upton Park. This is underlined by the fact the club is needing to resort to using GroupOn to sell tickets to fill the stadium. If you look at attendances this season you will see some near capacity crowd – such as Barnsley and Burnley or the game on Saturday against Crystal Palace, where as games where full price ticketing has been held up such as Leeds United, Ipswich Town or Portsmouth have averages down by 7,000 on capacity. Is it any coincidence that the games were attendances have been high have also had special promotions in terms of ticket prices? Kids for £1, kids go free, family tickets for four for less than £50.
This season the average attendance at Upton Park is 29,446, the biggest in the division. Last season it was 4,000 higher in the Premier League. Sure, there is the argument that away support is smaller, demand for the Championship product is less than the Premier League, and the police have played a part in limiting away attendees for the games versus Cardiff City and Millwall, but actually do clubs like Burnley, Coventry City or Bristol City bring less fans than Wigan Athletic, Bolton Wanderers and Fulham? This means one of two things – either the average price is too expensive for the product on offer, or the core fan base is dropping.
The second point is an interesting one. Discounts for kids are a great idea. West Ham should be applauded for the continued use of this tactic which they were one of the first clubs to introduce over a decade ago. But the issue is they tend to be the exception rather than the norm. Other games (such as the one versus Coventry City) have seen kids tickets rise to £19, the consequence being crowds dropping to around the 25,000 mark. Charlton Athletic frequently give tickets away to local schools – in an age where football clubs are trying to become the centre of the community what better way for the club to boost its image than encouraging locals to come to games. West Ham are one of the biggest employers in Tower Hamlets, which is one of the poorest regions in England. The vast percentage of West Ham’s supporter base is from outside of their local area – what better way to engage with them. Interestingly enough these “new fans” would be more likely to return to the club simply based on the proximity of the club.
Finally, it is worth noting that as a member (and also having a lapsed membership on my email address) the club hasn’t marketed to me about the deal – surely a starting point from their database is fans who have bought tickets this season but haven’t for this particular game? Isn’t that marketing 101?
3. The impact on the club – When you use GroupOn, only 50% of the revenue is pocketed by the “retailer” (the rest is kept by GroupOn). So a £20 ticket will see only £10 reach West Ham. Yet the club has an “active” Social Media strategy right? Nearly 40,000 followers on Twitter and a Facebook page with thousands of “likes” is surely a good place to start with these offers if they are going to do it. That way the club will at least keep the full wallet. Why is this important? Because I want the club to get whatever money I pay for my ticket, which I hope they will re-invest in the infrastructure or the team. I do not want to see that cash go to an US company. As I mentioned above, I would rather the club invested into the local community, local schools, local groups where there is an opportunity to build a strategy for encouraging new fans.
So on one hand I should applaud the club for trying something new and embracing a social media channel to market. But it cannot be denied that their continued use of shotgun style marketing offers is antagonising the existing fan base. So for now I hope that those GroupOn purchasers enjoy their night out at Upton Park and I hope they come back, but somehow, like the vast majority of all GroupOn deals, it will be just for the night.