BERLIN – November 2023
SPOBIS, the leading German-language industry portal in the sports business, reports on the successful cooperation of various sports clubs with Smart Pricer.
In professional sports, home games are of crucial importance, both from a sporting and financial perspective. Revenues from ticket sales at home games often are an essential pillar for sports clubs. Especially in times of economic challenges and high inflation, as is currently the case, high attendance is of great importance to sports clubs. It not only ensures financial stability but also enables investments in player squads and improves the customer experience.
In the article “Kosten senken und Einnahmen steigern: Drei Wege zum Erfolg” in English: “Reduce Costs and Increase Revenue: Three Ways to Success” by Moritz Neumann, editor at SPOBIS – Home of Sport Business, specific examples are used to explain how professional clubs can enhance their financial performance while simultaneously reduce costs. Considering the gloomy economic outlook for 2023 and 2024, the search for innovative revenue sources is becoming increasingly urgent. One of the promising approaches highlighted in the article is the implementation of an
innovative and automated dynamic pricing solution in the area of ticket sales, based on the successful example of the Swiss ice hockey club EV Zug, in collaboration with SecuTix and Smart Pricer.
PRICE INCREASES ARE A CHALLENGE EVEN IN GOOD TIMES
Increasing ticket revenues through price adjustments is always a challenge for professional clubs, even in economically successful periods. The strong emotional attachment and identification of fans with their clubs often lead to resistance to price hikes within the loyal fan base. The introduction of dynamic pricing with flexible price ranges can play a decisive role in addressing this issue. This is also shown by the experiences of our customers at Smart Pricer, including FC Bayern Basketball, the German Handball League team TBV Lemgo Lippe and the mentioned EV Zug. The reasons for this success are diverse and include adjusting price ranges for price-sensitive and loyal customers, promoting early bird discounts, efficiently distributing fans on less crowded match days, and increasing the online share of sales.
Based on a holistic analysis of historical data, ticket sales, and end-customer market research, a tailored pricing strategy is developed that considers both the club’s and fans’ needs.
For example, during the 2022/23 season: 15 price updates were implemented at league matches, consisting of 79% discounts and 21% price increases, resulting in an average revenue increase of 13.3% for over 7,000 optimized tickets.
“It is particularly important for us to offer our loyal fans a fair price at all times and to reward early bookers in particular. We achieve this very transparently in the current setup.”, emphasizes Dominic Wirth, Head of Ticketing & Customer Service at EV Zug
Filippo Scanzano, Country Manager for Attractions, Sports, and Entertainment at Smart Pricer, points out, “This example illustrates the immense potential for sports clubs of various sizes in the field of automatic and individual pricing.” Further, dynamic pricing is an effective way to curb short-term booking behavior, promote planning certainty and prepayments, and increase the average ticket price, leading to increased revenue. For large events with more than 5,000 seats and high occupancy rates (60-90%), revenue increases exceed implementation costs by a factor of 5-20.
COMMUNICATION: THE KEY TO SUCCESS
Effective communication with fans is critical to successfully implementing dynamic pricing models. Christian Kluge, CEO and founder of Smart Pricer, highlights the essential principles for implementation, covering both financial and marketing aspects.
KEY INSIGHTS & PRACTICAL TRANSFER
1. Dynamic pricing is a crucial tool for optimizing revenues and ensuring greater financial stability for sports clubs.
2. The implementation of dynamic pricing requires careful alignment with the needs and expectations of fans, including special price offerings for season ticket holders, members, and early bookers.
3. The successful partnership between Smart Pricer and EV Zug shows how data-based price optimization can deliver revenue increases averaging 13.3% or more.
4. Large events with high occupancy rates particularly benefit from dynamic pricing, where revenue increases can exceed implementation costs by 5-20 times.
5. Effective communication is the key to introducing dynamic pricing models, with clear information, training for cashiers, and a customer-friendly switch to “starting-from” prices or the elimination of price lists.
In addition to the mentioned customers with automated dynamic pricing solutions, Smart Pricer has already implemented over 100 projects worldwide and holds numerous consulting mandates in sports, including UEFA EURO 2024 Hospitality, DFL, DFB, Bayer 04 Leverkusen or SC Magdeburg.