Author: Mark Nagel
FM Issue: Leadership and Operations 2015
The use of computers and other electronic devices as a conduit between vendors and customers has become a prominent component of marketing activities in nearly every industry. Customer Relationship Management (CRM) is the term most often utilized when discussing how organizations interact with current and future customers. With the tremendous recent advances in technology, CRM programs can now organize, automate, and synchronize sales, marketing, and customer service activities at a speed and level of efficiency far beyond what a human salesperson could hope to accomplish. For example, computer programs can instantaneously react to customer purchase behavior in a store far more quickly than a store clerk 100 years ago. Where once the clerk had to try to remember the customers’ names, members of their family, product preferences, and other habits, now a computer program can instantly inform management that a person who typically buys two gallons of milk a week has chosen to only buy one gallon this week. In many cases, management does not even need to react to this information as the computer program may send an email or text message seeking information from the customer regarding the deviance from normal protocol, or, in some cases, may provide a special offer to spur the customer to return to (or enhance) previous buying patterns.
In the sport and entertainment industry, CRM activities conducted via computers have become quite common. Ticket selling programs collect data from customers and begin to “classify” those customers by their habits. Patrons purchasing weekend tickets to one National Basketball Association (NBA) game can be targeted for future weekend games. As the patron acquires more tickets to other basketball games, the CRM software can build a stronger customer profile to determine what type of purchaser they might be (parent bringing multiple kids to games, person coming to a weekday night game with friends or colleagues, etc.).
As facilities and ticketing companies have learned to utilize enhanced computerized CRM techniques, the database of ticket purchasers controlled by an NBA team can be combined with those of a National Hockey League (NHL) team and a concert promoter to build an even more powerful mechanism to identify customers with unique, niche preferences. For instance, a computer program could begin to “profile” an NBA ticket purchaser in Chicago who just purchased two weeknight tickets to a Bulls’ game against the New Jersey Nets. If the program later “learns” that that same purchaser also bought tickets to a Chicago Blackhawks – New Jersey Devils game, crossover marketing messages could be automatically created revolving around the theme of New Jersey. Potentially, this purchaser may have a higher likelihood than “normal” to buy not only “New Jersey based” NBA and NHL products, but also concert performers (such as Bon Jovi or Bruce Springsteen) or other applicable entertainment events that match previous behaviors. The computer program is likely to detect these tendencies far more quickly than a human marketer could, especially considering in some cases thousands of transactions are occurring each week or even each day.
With an emerging marketplace enhanced or even potentially “controlled” by data, it is no surprise that a variety of information-collecting mechanisms have been implemented. In 2013, Major League Baseball’s Washington Nationals received tremendous fanfare for introducing a smart card system that enabled season ticket and select mini-plan holders to enter the facility and make purchases at a variety of concession and licensed merchandise stands without having to use a paper ticket, cash, or a credit card. The fans enjoyed quicker access to the facility upon arrival and lower wait times in lines when purchasing items. Even though the smart cards were primarily marketed to fans as a tool to enhance service quality and diminish waiting time, each time the card was utilized important data regarding individual customer behavior (when and where they entered the facility, when and what concession items they purchased, etc.) was collected and used for future marketing activities, many of which could occur almost instantaneously (e.g., receive 25 percent off your next hot dog purchase; buy a team hat and receive the second one for 50 percent off) as the updated information was processed by the database CRM system.
Though other teams had utilized programs similar to the Nationals’ system for various transactions, the “all-in-one” aspect has been quickly adopted by other franchises and facilities. In many cases, cell phones or Radio Frequency Data Identification (RFDI) rather than a smart card have been utilized to process payments. Regardless of the specific medium, a wealth of data is collected, and in some cases, the number of onsite staff members needed to supervise turnstiles, process concession purchases, and monitor licensed merchandise transactions has decreased, permitting the facility to save money on human resource expenses.
To some, the technological advances seem to point toward a future where human interaction will be much less important in the sport and entertainment industry. But let’s think for a moment about the store clerk or the facility game-day employee from the bygone days of 1915, or, to show how quickly technology has altered the landscape, 2005. These service providers had to know their customers, be able to notice trends, and— perhaps most importantly given the current proliferation of human beings walking around looking down at their mobile devices—be prepared to interact. Despite all of our technological advances, human beings are social creatures, and when they attend live events, despite many of their addictions to their cell phones, they want to be entertained in an environment where they are engaged with other attendees.
The greatest technological advances in the world cannot replace the special feeling one gets when a family member, friend, or sales agent remembers something special about them. No matter how much our computer software systems advance, customers will still greatly appreciate when they arrive at a venue and the long-time usher who has paid attention during previous conversations greets them by name and asks how their kids are doing. Computers can provide a wealth of information and can identify the appropriate marketing messages and channels to effectively reach and persuade patrons to take action, and any facility manager would be crazy to ignore the tremendous amount of information and potential revenue that technology can provide. However, facility managers must not forget that the front lines of parking services, ticket sales, ushers, concessions and licensed merchandise sales, and many other aspects that make our business special (because we create memories) cannot be replaced by a computer program. As we invest more and more in better technology, we should not forget that old fashioned customer service is still a central component to the live entertainment experience. Customers come to venues seeking the feeling of being at an event and being surrounded by other people—things that ever more advanced TVs, sound systems, computer programs, and other devices cannot replicate.
Hopefully, we do not lose the human element that makes our industry truly unique as we acquire computer applications designed to make our lives “better.” FM
