Generally, most clubs have no basis for optimising revenues from across their customer and fan base. Can they learn from business processes that other industries have used for decades in their interactions with consumers?
Football’s approach to “knowing your customer” lives in the dark ages. Generally, most clubs have no basis for optimising revenues from across their customer and fan base.
I’ll argue some clubs, Everton included, could be accused of not knowing their product either.
Football is almost unique in business in that each club is almost entirely a monopoly supplier to a group that is perhaps the most loyal in terms of retention, and predictable in terms of base spending of all customer groups. I’ll explain more as the article develops.
Looking in from the outside, that means clubs are losing out on multiple revenue sources, and most importantly failing to engage and enrich the experiences of their fan and customer base.
It is as if the football industry, certainly at club level, has never heard of many of the business processes that other industries have used for decades in their interactions with consumers.
This affects every aspect of each club’s commercial relationship.
Whilst there’s many areas to consider, for the purposes of this article, I’m going to look at ticketing and match-day revenues.
The parallels between airlines & football clubs
There are enormous parallels between airlines and football clubs. Don’t worry, I’ve not lost it, I’ll explain. Both businesses use very capital-intensive assets – planes and, in the case of football clubs, stadiums. Each asset has a fixed capacity: there’s only so many people who will fit on a plane; there’s only so many people who will fit into a stadium – although both can be configured to meet the needs of different types of customers. Each are sell-time sensitive, perishable goods – once a match is played, it's gone; once a plane takes off, that’s gone too. Each attracts customers who dependent upon their budgets, whether they’re on business or leisure, are looking for different experiences, have different expectations, and are prepared to pay different prices for the same core product – albeit with variations in the levels of service offered.
Nearly 40 years ago, American Airlines introduced a system which ultimately was copied across the travel and hotel/leisure industries. It was known as yield management, and was focused on two points: (i) airline seats are perishable; and (ii) that not all their customers were identical. People wanted different experiences, had different pricing points, some planned way in advance, others driven by need, less so. All of these factors (and many more) allowed airlines to maximise revenues and maintain the highest load levels (ie, sell the greatest numbers of seats).
Not everyone who was a customer of the airline had to pay more than previously but the airline was able to significantly increase the overall revenue per any given flight.
It also allowed airlines to more profitably differentiate the different classes of travel: economy, business, first class. It allowed them to configure planes and pricing of routes based on enormous amounts of real data, data that constantly evolved in real time. Whilst football is not such a complex pricing product and has fewer variants, there are lessons to be learned.
So, what’s that got to do with football, and specifically Everton?
Everton have been lauded in recent years, and quite rightly so, for innovative pricing strategies and excellent season ticket marketing campaigns. The campaigns have been so successful in terms of numbers taken up that we reached the upper limit of season tickets that can be sold at Goodison Park. Many of the tickets are sold to young spectators below the age of 24 which is a welcome switch of demographic from most other Premier League clubs. Season tickets were sold out in the first week of June, two months before the Premier League season started.
However, all that comes at a significant cost to the overall match-day revenues of the club, and whilst it may appear insignificant in the context of overall turnover, it is important from a regulatory STCC point of view and therefore player wages.
Corporate and hospitality seating sold out even sooner, the sold-out signs going up on 30 May. Bafflingly with so much demand for our hospitality areas, the club had announced a price freeze for a second season running.
What is the commercial sense in that? Hospitality is surely more price elastic than non-premium ordinary seating. Surely there was an opportunity to generate additional revenue in the face of unprecedented and significant demand?
Again, it might not seem particularly important versus the overall turnover, but consider this – we’re moving to a new stadium with likely, at least 3 times the number of executive/hospitality seats available. Shouldn’t we be preparing the way for the new stadium by testing the price sensitivity whilst at Goodison? Regardless, it is a missed opportunity to increase revenues from what is considered by everyone who uses the facilities as an exceptional product that most (privately) would admit is cheap. Certainly, it is cheap relative to our competitors.
Not only is the pricing level potentially questionable, but perhaps the pricing policy, the number of season tickets sold, the size of concessionary discounting, and the rather blunt pricing methodology needs reconsideration, particularly in the light of a stadium move. For example, all the regular seats in the Park End are equally priced (ignoring the classification of season ticket holder, senior adult, young adult etc). Why should a seat in the top row far left corner be equally priced to a seat 15 rows back and in line with the penalty spot?
The same argument could be used all around the ground. With the exception of a minimal discount for an obstructed view, there’s no differential pricing for each part of the ground based on quality of view and, one assumes, therefore demand. The question is: Why not? The technology exists, just look at my airline example above.
All of this is important – it’s important because the average revenues we generate from each spectator per match are pitifully low. I stress I’m not saying hit those that can only go to the game because of these pricing policies, but let’s be cleverer with those that can and perhaps would happily spend more, especially if they received an improved viewing, for example.
Match-day revenue gap
How can we compete if we generate less than £17 per spectator per game? Southampton manage nearly £25, Liverpool £48 and admittedly with the London effect, Chelsea £69 and Arsenal £65.
It’s also important in the context of the new stadium. I’ve written on several occasions that ordinary fans should be able to move to the new stadium and watch the game in much better facilities at the same price. This is made even more possible if yield management techniques are used on less price-sensitive fans or customers.
Know your product
I mentioned at the beginning of the article perhaps the club doesn’t know its own product. What do I mean by that?
We are a premium product!
Perhaps they don’t have the confidence to price parts of the product more appropriately, thereby increasing the yield per spectator, something which – if added to other commercial improvements elsewhere – makes us more competitive on the pitch through greater resources.
When a business sells all of its products in record time, there’s only two solutions to growing the business. Increase production or increase the average price across the product range. Football cannot easily increase production, although regular qualification for Europe and consistent progress in domestic cup competitions is one way of increasing revenues. Equally, moving to a new stadium has been for many clubs the passport to greater resources; something we will enjoy in the near future.
Good businesses have the confidence to find ways of increasing income per customer without losing their customer base, to explain the reason for increasing revenues either because of over-demand, or the product is superior and therefore represents value.
Whilst it’s difficult to perhaps argue the quality point with what we’ve seen on the pitch this season, that’s only part of the purchase made by a fan. To many, it is the experience, the pilgrimage and all that goes with returning to a footballing cathedral with family and friends that is equally important.
I’ll finish by saying we need to move our thinking away from old, old business practices. We need the confidence in our product, and the relationship and loyalty of the fanbase, to explore innovative ways of increasing income to assist the team, whilst not forgetting our base and the economic realities of many of our fans whose custom should be valued equally regardless of the pricing point that they engage the club on.
The club needs to learn to sell its core product more intelligently and with more confidence, but it also needs to value fans more, learn more about their individual needs and as a result generate more income, but crucially more fan satisfaction and engagement.
It’s time to come out of the dark ages and become a 21st century business.
I’d welcome feedback on any of the ideas, whether you think they’re useful, interesting or nonsense…
Reader Comments (37)
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1 Posted 15/02/2018 at 21:46:41
I've long mentioned the money per fan argument, particularly when Chelsea had ¾ of our gate but double our revenue.
2 Posted 15/02/2018 at 23:32:27
If we assume going by your figures Paul, that West Ham can generate £50 per spectator per game then they are receiving about £800,000 per game more than us. Put another way £20.8M per season. Scary stuff.
3 Posted 15/02/2018 at 23:51:44
If the club was heavily reliant on matchday revenue for its existence, it would likely be forced to increase ticket prices, but that would probably produce lower attendances and therefore would be counter-productive.
The new stadium has to be full or nearly full for most fixtures and the recently introduced subscription type season ticket plan will help that to be the case.
A full stadium on the waterfront will help to attract better sponsors which will increase the income of the club far more than tinkering with individual ticket prices.
Would the lower income fans be forced to sit in the 'cheap' seats whilst the prawn sandwich brigade occupied the best seats in the house - economically it might be a great idea but socially I would find it abhorrent and it could separate the Everton family into different social groups. No thanks! I like the way things are and the financial benefits wouldn't outweigh the damage that may be done by introducing such a scheme.
4 Posted 15/02/2018 at 23:56:24
5 Posted 16/02/2018 at 00:39:11
The short version seems to be despite Moshiri's arrival the amateur financial ethos hasn't improved much. The day to day hands on direction still reeks of Elstone. Is he CEO or CFO or a jack of all trades (master of none).
The way I see it is the Board decide which financial direction to go and, in due course the CFO tells them how he's going to do it and how much it will cost.
I see no reason why you can't charge for different parts of a section of the ground. We already have A- and B-teir games.
Not strictly apples Vs apples, at The Gabba you pay more for an ODI than you do for a Test. You pay more to sit in the shade, you pay more to sit in the alcohol zone, you pay more to sit behind the bowlers arm, you pay more to sit a bit higher up to get a better view.
Liverpool tried, iirc, to float a price of 㿹 for the big stand...and by extension the yet to be built Anfield Rd stand, which got knocked back result no new Anfield Rd stand in the foreseeable future.
This, we're The Peoples Club / must have cheap seats lark is okay-ish short term, but there is no reason why a staged season by season entry into the real world without killing the blue goose with 㿹 can't be managed. If only to lessen the shock of an all at once double digit price hike in 2023 or when ever.
Btw, how much did West Ham's prices jump? Anybody know?
6 Posted 16/02/2018 at 01:28:40
7 Posted 16/02/2018 at 01:32:10
But surely that facility must already give them a massive amount of real data about the fanbase. Where they live, the tickets they buy, other services (magazine, programme), replica gear and memorabilia...
I agree, they don't appear to be targeting us individually as yet, but isn't the modern version of this exactly what Google and Facebook are doing in terms of their ad-serving analytics? Not sure I want the club on my case, telling me what it is I should be buying, though...
8 Posted 16/02/2018 at 03:34:07
Everton continue to fail in attracting non Evertonians and feed existing ones globally.
Far too parochial.
I watch every game in the US, consume content good, bad and indifferent about Everton yet barely get an email from the club, despite having an account.
I also have fallen into thrall with ice hockey and am a season ticket holder at the New Jersey Devils, an average to middling franchise.
Their support is dwarfed by Everton's yet they market me and apply ticketing policy's light years in front of Everton.
Often seen as a strength and a people's club thing, commercially Everton are distinctly Championship, if that.
How we with all the money washing around cannot attract business savvy people, and technology appropriate systems to maximize our revenues is beyond me!
Well as we know it's all linked to our muddled approach on the field, lack of focus in pursuing a clear vision and sticking to it.
Sadly, a moribund board unfit to run a club in the 21st century.
I hope yewse fun boy laas keep the content coming. Class.
9 Posted 16/02/2018 at 06:49:43
So trying again and assuming that they generate 㿞 per spectator as against our 㾽, and their average gate is 55,000 per home game against our 40,0000, the sum is:
40,000 X (㿞-17) = ٟ,320,000 per game or in a 19-game season (home) 㿅,080,000 PLUS (55,000-40,000) X 㿞 = 𧾦,000 per game or in a 19-game season 㾺,250,000
(I also got my sums wrong first time around I allowed for a 26 game season).
That is over ٠M per game or 㿓 million per season more income than us in gate receipts alone.
Even with the money sloshing about in the Premier League that represents a significant commercial advantage. You can pay a few players wages with that sort of money.
Whether it would be a good idea to tamper with the existing pricing I am not so sure. As I see it the Stadium is the game changer for Everton.
10 Posted 16/02/2018 at 09:00:26
Just a couple of points on the figures. The calculation is quite simple, take the match day income as reported in the last available accounts and divide by the total attendance over the season including European & domestic cup games.
As a result you get West Ham with 㿇 million match day turnover watched by 1.334 million fans, therefore income per spectator is 㿀.23. Arsenal match day turnover 𧴜 million watched by 1.557 million spectators etc etc.
Everton was just over 㾺 million watched by 836,000 spectators, thus an average income rounded to 㾽 per spectator.
11 Posted 16/02/2018 at 10:02:41
It wouldn't matter if you pointed to a room full of gold and gave them the key, they would still carry on as before. They won't let anyone in to expose their failings. â€˜Forget about it' as they say in the movies.
12 Posted 16/02/2018 at 13:22:06
Okay, if it reaches 2 quid, I'm out...
Right, if it reaches 3 quid... etc, etc
Same applies to your football club you will never give them up.
13 Posted 16/02/2018 at 13:28:03
On to the subject at hand, I think I share some of the concerns as Lawrence (#3). However, as long as the 'cheap' seats are of a similar standard to the ones we have now, then I don't particularly have any qualms about the club charging more for a premium experience.
Myself for example, I live in Leeds and can't justify the expense of travelling all the way to Liverpool every couple of weeks. When I do get to a game however (maybe 3 times a year?), I certainly wouldn't mind spending an extra 㾶-20 to make it a fantastic experience.
The main problem I can see, though, is how do you implement something like this without significantly angering the supporters who currently hold season tickets in the 'premium' locations at Goodison Park? Perhaps it's the kind of change that could only happen during a stadium move, which luckily we have coming up in a few years time (which incidentally I believe will actually happen!).
14 Posted 16/02/2018 at 14:49:50
And yes, if you can't afford the higher priced seats, you buy the cheaper ones just like anywhere else.
15 Posted 16/02/2018 at 15:06:18
If we want to get people spending more money during match days then start thinking differently rather than just insulting us with cheap unhealthy fast food and drink at top prices.
The fan zone is no more than a grotty car park with deep fat friers. Why not extend the hospitality to after the match? 30,000 people walk out and don't spend a penny, the club should look at ways of capitalising on that instead the local pubs get the business and, let's face it, the pubs around the ground aren't the best.
Bring out more kits and make them affordable. I think American footy have heritage days were the team plays in a retro kit then sell the merchandise. Instead we again rip off the fans constantly with overpriced kits.
Do I want to sit next to a tourist footy fan who is taking selfies whilst we witness yet another defeat, probably not.
How much more money do we need?
We would need sustained success on the pitch to significantly increase our international fan base and revenues which isn't happening anytime soon. Global fans probably recognise Wayne Rooney more than Everton.
A new stadium isn't the answer to our issues on the pitch if anything it will give the club the chance to rip us off further by using the Ryanair model of charging us extra to sit with friends and family.
Does anyone think that we will have greater attendances in a new stadium? I am not so sure.
I am all for an improved experience for all when visiting Goodison though I do think that they are giving us the bare minimum for the maximum that they can squeeze out of the same fanbase, year on year.
16 Posted 16/02/2018 at 15:23:54
Attendances and 'atmosphere' have a huge part to play in blagging broadcasters, and those with their arse crammed in a bean-bag chair in Bald Knob, Arkansas, that what they are actually shelling out for is the chance to consume a slice of "the best league in the world" from the comfort of their own home.
Start fucking about with the relative small fry of ticket prices, raising them for a quick boost to match day revenue, and clubs risk alienating the regular paying punters they can always rely on to turn up, week after week, no matter what shite is actually being served up, and whose very presence helps push the perception that the Premier League product is unparalleled in excitement, popularity and passion.
Look at the reaction of RS supporters when it was revealed that their owners planned to raise prices for certain seats by 30%, along with the rapid retreat and grovelling apology from the Fenway Group that followed.
Just because there may seem scope for clubs to charge more for tickets doesn't mean they should, or that people would stand for it if they did, particularly during a period when the game is awash with more money than ever before and with potential new avenues of milking the brand materialising all the time.
17 Posted 16/02/2018 at 15:29:52
We just have to do it right. I'm hopeful it'll be done right but have my worries; the club still remains in my eyes amateurish.
I made a point in the survey about the designs inside the concourse. I'd love airport-style bars and cafes. Therefore, instead of standing around with your plastic pint and your programme, you'd be in a bar with seating too.
As long as the pricing is right, as I personally would never buy food etc at the ground the prices are a disgrace. Pure rip off.
18 Posted 16/02/2018 at 16:16:59
You improve the experience and change the apathy you get from a ST holder who goes to every game and has a face like a smacked arse.
Instead of offering season tickets, try quarter plans or just Saturday games with added extras like a tour pre-game allows you to attract different supporters and raise more revenue.
Going back to the â€˜well' to get more from an existing STH is mad. Plenty complain about affordable tickets for younger sections.
Perhaps if the experience was more than the game then clubs not just Everton could attract people willing to spend more for a 6 home game package rather than less for 18?
The lack of engagement means the club misses out completely. How long have Everton served dross (the food I mean) at the game? People want better more relevant concessions and a pre-match experience. Why shouldn't that be in the ground rather than the ale house up the road and a mad rush to the ground?
Why isn't the ground open to watch games before ours, with decent food options and activities for kids and adults? Pre-game revenue for people who come rarely and are more like to spend as it's an occasion or a chore!
Everton believe things are rosy because we sell out nothing could be further from the truth. The only reason we cannot raise ticket prices without revolt is because the experience surrounding it is poor, from the restrictive view to the chair to the ale.
Time to change Everton, even â€˜fookin West Ham out-earn us.
19 Posted 16/02/2018 at 16:26:24
20 Posted 16/02/2018 at 20:13:36
We 100%, definitely, will. Check out the new stadium effect. For example, Sunderland went from an average of 20k in their final season at Roker, to 34k at the Stadium of Light.
And in the final season at Roker, they were relegated.
There's obstructed views all over the place. There's a waiting list. We sell out. And there's thousands of blues who have been waiting two decades for the club to get it's shit together, show some ambition and make some demonstrable progress.
21 Posted 16/02/2018 at 22:14:22
Instead of me getting it wrong yet again would you mind telling us how much income per home game, West Ham receive more than Everton please?
22 Posted 16/02/2018 at 22:23:31
Including Europa League & cup games, in 2016-17 West Ham averaged ٟ.125M per home game; we averaged 𧽥k.
23 Posted 16/02/2018 at 22:38:24
I find it absolutely amazing that West Ham can generate 66% more income than us.
24 Posted 16/02/2018 at 22:48:52
It's a judgement call as to whether or not guaranteeing a full house every game is worth the income you give up ensuring it. The question is: Could we sell out without those pricing strategies?
I believe we could...
25 Posted 17/02/2018 at 01:36:54
Do those clubs you mention Hull, Southampton and West Ham outsource catering etc? Or do their sales of pies, tea, beer etc go directly into the club's coffers?
Do the figures you have cited only include ticket sales? Do the figures you cite include executive boxes? As this no doubt would have a considerable impact on comparing Everton with other clubs in relatively newer, purpose-built stadiums with corporate facilities in mind.
I also thought that West Ham gave huge subsidies to the match-going public initially at least in order to ensure the supporters went with them following their move from Upton Park?
I, and I'm sure others, would like to see the breakdown of these figures, if it is, as your figures would suggest that it is only ticket sales that make up your numbers then Everton FC must be doing something particularly novel... and do the subsidised prices explain the other operating costs on the balance sheet? I'm just very curious to know how Everton operate differently to the other Premier League clubs you mention.
26 Posted 17/02/2018 at 10:48:30
27 Posted 17/02/2018 at 18:00:40
I hope your right. From memory when we last won the league attendances were down on the previous season.
We always seem to have a similar sized following. I am probably not giving the club much credit here but, if we did have people on waiting lists etc, then the club would exploit that to the full.
28 Posted 17/02/2018 at 21:32:54
The last time we won the league, way back in 1986-87, our average home attendance was 32,935 – up from 32,227 the season before. So no, but they were down the following season (1987-88, when we were reigning champions): 27,771, as Colin Harvey struggled to fill those big shoes vacated by Howard Kendall.
The average home attendance (league games only) is provided here: History of Everton Attendances. That shows some variation through the years, and includes comments on the possible influences, which are diverse.
And there being a waiting list for season tickets is, I believe, a very recent phenomenon. To give the club credit here, they did something to expand season ticket availability and that (combined with the popularity of the Premier League) seems to have raised demand to the point where it exceeded supply for the first time just a few years ago.
Prior to that, average attendances around 36,000 seemed to reflect a reluctance by fans to accept obstructed views, of which Goodison Park boasted around 4,000.
29 Posted 17/02/2018 at 21:45:36
30 Posted 17/02/2018 at 22:45:55
31 Posted 18/02/2018 at 08:44:51
It's quite simple. Increase revenues by improving experience and product. Improve the food and beverage and merchandising sell more. The stadium is as much the product as the football, it confines us massively, the only way to improve that is to get into the new stadium.
If, due to demand, you increase pricing significantly enough to have much of an effect in % revenue growth then you will have mutiny on your hands especially given the stadium and the poor season on the pitch.
32 Posted 18/02/2018 at 10:23:02
Maybe true, James (#31), but as those revenue streams are outsourced, the Club will not see any extra money as a consequence of improvement.
33 Posted 18/02/2018 at 14:01:08
The myth that the self-proclaimed "best league in the world" (the Premier League) is indeed that; a myth. Atmosphere, experience and style of football served up is way better in the "poorer" Bundesliga.
Also, Everton can learn a lot from the "KÃ¶nigsblauen" (Royal Blues). A club with a passionate and predominantly local fan base from a working class city in an economically depressed part of Germany. How to move into the modern era with a stunning stadium yet retain your identity and tradition.
34 Posted 18/02/2018 at 15:50:05
We also have to be mindful of the product on show. For the past few seasons it has been pitiful. Had season ticket prices rose like you suggest, then I guess a lot of people would have had doubts as to whether they could justify the price hike given the so-called entertainment on show.
The problem in comparing football with any other industry is that, in most other industries you know pretty much what kind of product you will get. Take airlines as you suggested. You know what the seats will be like, service, refreshments, the level of professionalism from the staff etc etc. If those levels fall short of what is expected then you would choose another airline next time.
We all have the option to use another airline to meet our customer expectations. We don't get that opportunity with football. You have the club you follow and unless you are a football tourist who will go to whatever club is in vogue then it's tough. We just have to tolerate whatever shite is served up.
I'm quite sure that aside from the top clubs who compete then if you start increasing ticket prices for average to rubbish football then attendances will ultimately drop. It's all very well citing west ham but that move into the new stadium brought all kinds of new tourist fans and, if I remember rightly, all kinds of offers for cheaper seats.
Personally, I think that until we have a product on the field that is consistently decent and entertaining then ticket prices have to remain affordable. What would you prefer: a half-empty ground with expensive seats or a full ground with affordable seats? I know what I prefer.
35 Posted 18/02/2018 at 16:40:29
Danny (#33), a few seasons ago I pointed out to senior figures at EFC there might be some value in looking closely at a Bundesliga club both as a business model and as a “productâ€ in terms of how the game is played and presented to fans. As a German speaker I was asked to establish contact with Borussia Dortmund, who were delighted to be asked for advice and the club secretary, who spoke better English than my German, expressed delight that Everton had respectfully initiated dialogue in his own language.
Needless to say, as a mere steward, I was not invited to make the visit to Dortmund that was kindly offered. However, I was seriously underwhelmed by the gushing feedback from Mrs Barrett-Baxendale about how she had visited the Dortmund club shop, how lots of the “puntersâ€ (sic) had flags and “even musical instruments all of which could add to the “Everton match day experienceâ€.
Be careful what you wish for; this is the person who will take over from Robert Elstone should he be lured back into Rugby League. She is so far out of her depth but nobody cares because most of them are and to expose one is to expose all. Perhaps you've started something, Paul?
36 Posted 19/02/2018 at 06:32:00
No idea how many people do the same but the club must have fairly substantial amounts of data on this stuff on which to base decisions/ proposals.
My data is of little use mind. My match day experience is meeting mates in the Lion in Moorfields, drinks and pies. Early game on in the background, banter and bullshit all round from all concerned. Cab to game to get in for five minutes to kick-off, visit to toilet, watch game, leave. Back to town if sufficient interest, more likely if we've played well.
Doubt that new stadium could ever provide the same pre-game experience. Never had a decent pint in any football stadium outside of Germany. Not a lager drinker but the Germans think too much of it to ever serve a bad pint. Outside of hospitality never had a comfortable seat with mates for two hours before a game either.
37 Posted 19/02/2018 at 18:01:04
Everton have allowed season-ticket holders, especially like yourself, to establish their own culture. It eliminates the bad experiences, the match excepted, to find places of quality pre-game that don't exist at Goodison.
It might feel like anti-football to many, but brand management, customer and or fan experience is key. The post almost feels like a decent day out with the inconvenience of the match squeezed in? Shame on Everton for this.
I'm not suggesting for one minute we become Disney over night etc. But the match day experience is so flawed that the disconnect between the clubs and fans is an abyss. It also explains, without the performances, the club have nothing...
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