Every year, one of your key variables for season ticket sales is churn: how many fans repurchase a package and how many defect? Once you know that, you’re faced with another decision: how much do you spend to regain those lost fans? Will it be easier and more cost-efficient to try to win them back, or should you invest more in replacing them with new purchasers?
Business studies have shown that in general it’s more cost effective to retain customers (and employees, for that matter) than to recruit new ones. Yet most businesses tend to write off lost customers pretty quickly. Is that a mistake? In a word: yes. According to a recent Harvard Business Review article companies with high churn rates might be better off trying to win lost customers back than trying to replace them. But that doesn’t mean every lost customer is worth pursuing: “Simply identifying those who are most likely to sign up again, rather than appealing to every defector, can increase win-back rates eightfold.”
Sure, the article was written based on analysis of a telecom company’s customers defection and win-back rather than about sports marketing, but the principles are the same:
- – People who have purchased something from you before have demonstrated a specific interest in what you offer.
- – People who are familiar with you are more likely to be responsive than those who have no history with you or no brand awareness.
- – Not every lost customer is worth winning back, and data analysis can help you understand which lost customers hold the most potential.
- – Tailoring your win-back offers based on the reason for defection is more likely to help you regain the customers you lost than simply offering everyone the same thing.
- – Learning from the customers you’ve lost can help you improve retention of current customers.
To apply these principles to your marketing efforts, follow these 3 steps:
- Survey.If somebody chooses not to repurchase a season ticket package from you, find out why. Online surveys are a great way to do this efficiently and to aggregate your results, while follow-up phone calls may help you get deeper information. No matter who you approach, understanding why people left is essential to improving both current sales and future retention. You’ll want to make sure your survey tool includes questions related to different aspects of the game and season ticket experience so you can pinpoint what drive their decision to leave and what might win them back.
- Segment.Divide your lost fans into segments based on their reason for leaving and likelihood to reconsider. Doing this allows you to decide who’s worth pursuing and what your potential recapture volume looks like. Realistically, you’ll have a least 3 segments: one that’s unlikely to return, one that you may be able to convert to periodic ticket sales, and one that you may be able to win back as season ticket holders. Ideally, you’ll want to segment on fairly specific reasons for leaving (i.e. affordability, in-venue experience, number of games attended, etc.). If you have one or more segments that are very unlikely to return, don’t waste time and money trying to sell them another season ticket package. Instead, look at whether you can fix any of their reasons for leaving to improve retention of your current season ticket holders.
- Strategize.Once you’ve segmented your lost customer base, develop a marketing strategy for each segment you choose to re-engage. Tailor your offers or incentives as much as possible to each segment. If you have a segment that left because they felt season tickets weren’t affordable, consider offering a discount. If you have a segment that left because they were only able to attend half of the games, consider creating a special ticket bundle that serves the needs to those who want to attend multiple games but don’t plan to attend the full season. Similarly, consider how you can convert people into periodic ticket purchasers even if you can’t win them back as season ticket holders. For fans who were dissatisfied with some aspect of the game experience, look for ways to address those needs (VIP packing bundles, meet-the-team experiences, etc.).
If you’re looking for ways to improve season ticket holder retention and regain lost ticket sales, we can help! Ask us about the options we offer for market research, strategy development, and fan engagement.