Sports Properties Should Focus on Core Fan Base to Maximize Revenues

Sports Properties Should Focus on Core Fan Base to Maximize Revenues

All fans are not created equal. Some are much more valuable to a given sports property than others.

“They’re the ones who prioritize the team or sport with their discretionary income,” Craig Swaisgood (head of data and analytics, New York Mets) said.

So, it’s logical to wonder why rights owners dedicate so much time and effort trying to attract people they think might become fans, as opposed to investing those resources in better serving the audience they know to be down funnel and already spending money.

“The narrative is typically how do we expand the pie, how do we bring more people in? And you need to keep your eye towards that,” Swaisgood said. “But if you’re talking about maximizing revenue, that’s not going to be the most lucrative play.”

The most bang for the buck comes from giving ones’ most ardent supporters all that they’re looking for. To do that, sports properties must understand who their core audience is and what those individuals want–and that means collecting and analyzing primary market data. 

“Nearly everything we see in our models of how you get somebody to buy, or of who is going to buy, [comes] from primary data we collected on previous fan behavior,” Swaisgood said.

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Some estimates have suggested the New York Mets have as many as five million fans worldwide. Perhaps they do. It largely depends on how one measures fandom (more on that in a bit). 

But that figure isn’t reflective of the number of people that bleed orange and blue, or more importantly, of those that buy tickets to games at Citi Field and/or team merchandise on an annual basis.

“We have deeply valuable data on about 150,000 to 200,000 fans,” Swaisgood said. “Those are the people that we have real insights into. That’s where we make our money.” 

The other 4.8 million can be useful when selling (or upselling) a sponsorship package, or in generating broader exposure for the franchise. Those fans may also consume team-related media. 

But the club understands ROI will be comparatively low if it directly markets to those individuals rather than its low six-figure core.

Those “people have heard about the Mets and baseball. It’s not a new product we’re throwing out there,” Swaisgood said. “So, the idea that we can offer them a bunch of gimmicks and suddenly they will become high-spending fans for life is unlikely.”

It’s more likely they’ll become fans for three hours, and then wait until the next time the team offers discounted seats because that is how they were conditioned.

That’s not to say promotions and gimmicks are fruitless. They can generate incremental revenue for a sports property, and open the door to niche groups. 

But oftentimes these initiatives, in aggregate, fail to generate as much net revenue as a 1% increase in season ticket sales volume would.

“Run any model you want. Extracting more from the core fan base is the most efficient way to grow the top line,” Swaisgood said. Those individuals “have self-selected. They’re choosing what they like with their wallet. Getting them to do more of that is an easier sell, and there’s much more money behind it, than trying to convince someone to like something they’ve known about their whole life and have chosen to ignore.”

Focusing on a select audience of 150,000 or 200,000 people is not exciting. Marketing professionals do not get out of bed in the morning thinking how they can go about targeting the same people time and again (especially, when they come from outside of sports). 

And it’s certainly not the next ‘big idea’ that rights owners hope will eventually drive trillion-dollar valuations. 

But the data clearly shows that efforts to double-down and serve the core fan base can result in tens of millions in newfound revenue.

“If you can get [those individuals] to come to one more game, buy more concessions or one more [piece of] merchandise, that's how [sports properties are] going to incrementally make money,” Ryan Dastrup (monitoring, reporting and analysis, Major League Soccer) said.

To do that, rights owners first need to understand who their fans are. 

Sports properties generally believe they have a pulse on it. And in fairness, most do based on the secondary market data they’re ingesting. 

The problem is much of that information has historically been misleading. And as a result, most have been and are still shooting blind. 

“Fans have always been asked to self-categorize themselves as avid or casual,” Dastrup said. “But they weren’t always asked if they are a fan of the specific team or league first.” 

So, fans and non-fans were bucketed together, with non-fans often incorrectly characterized as avids. The introduction of fan avidity scales to the marketplace has alleviated much of the confusion. 

“But even now, you have other buckets of fans that these secondary market surveys are not accounting for,” Dastrup said. 

For example, there are multiple types of avid fans. One may never miss a game on television, but can only get to one in person each year because of his/her work schedule. Another will attend several games each week.

“If you can get granular enough to know who the super-avid fans are, then you can use that data to specifically market to and reach them,” Dastrup said.

Those insights can only come directly from the fan, though. 

So, that makes CRM input critically important. 

"When a salesperson learns about why and how a fan enjoys the product, or how they share their tickets, that is next level information that allows the organization to be more specific with how it engages the core customer and continues to maximize revenues,” Swaisgood said.

Sports properties should also be conducting their own survey work to find out what motivates their biggest fans.

“Is it a specific ticket package? Is it a player they associate with? Is it some type of community engagement,” Dastrup asked.

It’s logical to ask why sports properties can’t super-serve their core fan base and simultaneously work to bring new fans into the fold. But sports business initiatives do not always exist in harmony (think: when scheduling promotions).

“If you want fans to show up on a weekday and drive attendance, you schedule a bobble head night on a Tuesday,” Swaisgood said. “If you want to generate the most money, you schedule it on Saturday. Of course, the strategy can shift depending on inventory constraints.”

In fact, ignoring the desires of the core audience to appeal to a broader demo can torpedo the former’s interest (see: Bud Light).

That does not mean sports properties should ignore individuals on the periphery of fandom. Just don’t invest significant time or resources in to attracting them.

“There are people who will tune in a little bit or come to a game if their friends are doing it,” Swaisgood said. “But those people are tough to target. Focus on delivering more value and a better experience for their core-fan friends, who are the best ambassadors you can get for your team, and they will come–or they won’t.”

It really doesn’t matter, at least not from a top-line perspective. Nearly all team ticketing revenue is derived from four groups: season ticket holders, individual game ticket buyers, group package buyers, and premium seat buyers.

50-75% of team ticketing revenue typically comes from the sale of season ticket packages.

“If you know what makes a season ticket holder tick, then it’s much easier to meet them where they are and to get them to be a STH again the next year,” Swaisgood said. 

20-30% will originate from single game ticket sales. Clubs that understand that audience, target, and meet them where they are have the potential to add $5mm to $10mm in incremental income. 

Savvy organizations can grow their group and premium businesses too with a highly targeted approach, and some hand-to-hand combat. 

The tendency to look far and wide for new supporters is driven by narrative. People, sports executives and billionaire team owners included, love a big number (see: Mr. Beast’s headline strategy).

But as competition for the fans’ time and money continues to increase (see: countless emerging sports properties) expect an increasing number to recognize that better serving the core consumer is moving the business forward. 

“It’s an attention economy,” Swaisgood said. “How do you get as much attention as possible? Make your product more compelling to the consumer than the other options they have for their money.”

To do that, sports properties need to understand the fan’s consumption behavior and what he or she wants.

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