In a December 18, 2008 Globe and Mail article titled Bargain-basement league, David Shoalts talks about the effect of the economy on NHL teams and how teams are slashing ticket prices and giving freebies in an attempt to draw fans.
Check out the reaction of a couple of experts on sports promotion.
With the weak economy yanking down attendance in many U.S. cities, NHL clubs are slashing prices in hopes of getting fans in the door.
At least 17 of the league’s 30 franchises are offering significant discounts and giveaways, notably in the non-traditional markets…
The thinking is that at least those buyers may spend money at the concession stands. But there may be a downside to the deep-discount strategy.
“I’m terrified of giving away product,” said Mike Veeck, who owns and promotes six minor-league baseball franchises and is the son of the first promotional genius in that sport, the late Bill Veeck.
“If people are cutting prices, then maybe something is wrong with their original pricing structure,” Veeck said. “Fans get used to paying your discount in about 12 seconds. Then that becomes the norm and you have to pay tremendously to get them back.”
Hockey clubs need to emphasize service rather than slash prices, says David Carter, the executive director of the University of Southern California’s Sports Business Institute.
“It’s like the debate of whether people should pay for content on the Internet,” Carter said. “Once you release it for free, you can’t persuade anyone to pay.
“The only way to get fans back in the building [at regular prices] is to service the dickens out of them. Make sure they have a fantastic time and walk out saying they received fantastic value for their tickets. But it’s a slippery slope because people then assume the discounted value is what the tickets are worth.”
There is no shortage of slippery slopes in the NHL. Discounts can even be found in traditionally strong markets such as Detroit and Denver, although they are not as generous as those in the Sun Belt. In Phoenix, buyers get four tickets for the price of three, and also with each ticket, a visor, autographed puck, hot dog and soft drink and priority for playoff tickets.
Ottawa is the only Canada-based team to offer discount packages.
Carter and Veeck say the club pays less than face value for the extras and, in the case of team merchandise, only a nominal amount. But that is where the giveaway should stop.
“Free parking feels like a deal,” Carter said. “So rather than drop the ticket price from $50 to $40, find a way to maintain the price at $50, but give value with it like parking or a voucher for something else.”
The only club to add the extras into the price is the Philadelphia Flyers. They have a promotion that charges $125 for two $46 seats. But fans also get a voucher for two tickets to their farm team’s games, a $10 credit on each ticket at the concession or merchandise stands, a team calendar, an autographed puck and a gift bag.
Veeck says ticket giveaways can work as a one-off promotion rather than a regular practice. The best policy, though, is to figure out the best possible price and stick to it, even in a recession.
“I don’t think selling tickets is going to be a problem, even in tough times,” Veeck said. “Bread and circuses become more important in these times. The last time there was an auto slowdown, ice-cream sales in Detroit went up.”
Winning, both Carter and Veeck agree, is the best promotion of all. Failing that, they say, service is the best tool to use.
“Add-ons of any kind work,” Veeck said. “This is a great time to utilize the players. Have ticket drives where players make calls or kids can come in and touch their heroes.
“It’s a matter of rolling up your sleeves and selling service. The underlying message is: we know it’s tough out there and here’s how we’re making it easier for you.”
In Columbus, where attendance for Blue Jackets games has been strong since they joined the NHL in 2000-01, the club is offering discounts in the face of declining sales, but only for a limited time.
“We tailor our offerings based on the current conditions,” said Marc Gregory, the vice-president of marketing. “It’s a matter of showing value in [discount] ticket packages compared to what they were worth initially.”
One of the worst things that can happen to a club is having a season-ticket holder discover that the person alongside paid much less for the seat.
“Our most important customers are our season-ticket holders,” he said. “When you look at the overall benefits they receive, it’s much greater than a discount on single-game tickets [which are customarily priced higher than season tickets].
“Our subscribers receive food and beverage and merchandise discounts. They also are invited to exclusive events like a morning skate followed by a chalk talk with coach Ken Hitchcock.”