For years, fewer spectators attend the Bundesliga matches. The problem here is the so-called “no shows” and the associated risk for the Bundesliga. Bayern Munich, however, shows that empty seats are a wonderful marketing tool.
Where is the problem? At the beginning of the year, the German Football League (DFL) announced: “German professional football recorded record ticket sales in the first round of 2018/19.”
Accordingly, the 36 clubs from the first and second league could sell 9,418,148 tickets. That’s 220,000 more than in 2017/18, the most lucrative half season yet. An increase of 2.4 percent – so no need to worry?
The numbers obviously do not depict the complete truth. Dominik Schreyer is Junior Professor of Sports Economics at WHU – Otto Beisheim’s School of Management in Dsseldorf.
He is a researcher on No-Show-Rates and has been pointing out the associated risks for football for six years. Schreyer works with the DFL and clubs at home and abroad and knows that in the Bundesliga “currently every tenth ticket is not used.”
The result is now in some cases a withdrawal of the right of first refusal on season tickets. The clubs have therefore recognized the relevance of the topic. Too big is the fear of empty ranks as in some DFB matches or the final of the Europa League in Baku.
In addition to the loss of mood, clubs and associations are also worried about shortfalls in catering and merchandising. But: no-show councils offer exciting opportunities in addition to these risks.
No Shows: Model gym?
The fact is: Demand on day tickets is – at least for successful traditional clubs like FC Bayern – very high. And this fact is essential to sustainably benefit from the No Show Council phenomenon.
Businesses – not just football – have two main ways to respond to high no-show rates. Of course, you can tackle the root causes, such as reward or punishment mechanisms.
Or they try to relieve the symptoms. One possible symptom relief tool is systematically overbooking stadium seats so that a club can maximize its matchday revenue.
What probably sounds like getting used to for many football fans is an established instrument in the aviation industry, for example.
Even more suitable for everyday use is the example gym. The industry benefits from no shows. So that at least part of the clientele pays monthly to go to the gym rarely or not at all.
One hundred percent fair, the comparison is not, because football clubs have a decisive disadvantage. While Lufthansa, for example, can rebook its passengers comparatively easily on another flight, it is not possible for FC Bayern to simply rebook its viewers to the match after another.
Quite strikingly: Anyone who has secured a ticket for the match against BVB for the 2019/20 season is – with all due respect – often not satisfied with the SC Paderborn as a guest in the Allianz Arena.
As attractive as the principle of systematic overbooking may be, so risky is ultimately an actual overbooking.
FC Bayern is already overbooking the Allianz Arena
According to Dominik Schreyer, “the principle of overbooking” is already considered a tried and tested marketing instrument in the Munich Allianz Arena. The vision was to be able to predict in perspective “a seat-specific access probability”. As a rule, such forecasts are not yet possible without errors.
Currently, the club leaders focus “probably still on the standing area”. For the consequences of any mispredictions are less serious in this area than, say, in the grandstand with dedicated seats.
The manageable risk can obviously pay off. It is “quite realistic that the FC Bayern can already generate a few hundred thousand euros per season.” Additional revenues are also likely through the sale of food and drink and merchandising items likely.
Schreyer emphasizes that this is, of course, a first rough estimate. This is largely based on two assumptions:
- Every tenth Bundesliga ticket in the standing area remains unused.
- The ticketing managers can sell the seats again.
In the Munich Allianz Arena, all 75,024 seats are sold out well in advance of the season. There should therefore be no doubt that even the majority of short-term standing room available can be sold out at short notice.
Dynamic Pricing as a Significant Sales Lever?
The main marketing lever to deal with no shows is called Dynamic Pricing. Dynamic pricing is widespread in US sports.
If you want to visit a major league baseball game, you pay a lot and sometimes little money. Because the ticket prices can fluctuate – depending on the demand, the table space of the opponent or even the weather.
If we look at the marketing mix of different football clubs, the price policy is somewhat lower. No wonder, communication measures on Instagram or Tik Tok are more popular.
And hardly any club marketer likes to offensively declare that he has successfully raised his ticket or jersey prices. According to Werner Reinartz, a professor at Insead in France, five conditions are crucial for the success of Dynamic Pricing:
- The willingness to buy of the customers must be different.
- The market must be segmentable.
- The arbitrage potential (exploitation potential) should be limited.
- The cost of segmentation and pricing policy should not exceed sales increases when adjusting to customers.
- The fairness should not be violated.
In order to best take account of these success factors, the pioneers among the clubs work together with external providers. Bayern, for example, relies on the expertise of Smart Pricer.
The Berlin-based company pursues the vision of revolutionizing pricing in the sports and entertainment industry. In addition to FC Bayern, Hertha BSC and VfB Stuttgart have also worked with Smart Pricer.
Based on the visitor structure and price strategies of the clubs, Smart Pricer analyzes historical and current ticket data. In the final step, a real-time software is used, which – in connection with the ticket software of the club – to ensure a daily price optimization.
Short-term risk or economic success?
Thanks to the technical infrastructure and with a bit of courage, strong-demand clubs should be able to further increase their match day revenues.
However, the club leaders would have to take the short-term risk, at least in some blocks of their stadium to refrain from fixed seats and this short term – that is, on the day of the game itself – to award the first-come-first-serve principle.
From a purely economic perspective, everything speaks for it: The ticket prices would be dynamic, and therefore also market-oriented – and the basis for significantly higher revenues. Do the Bundesliga clubs dare to pursue this supposedly unpopular approach? Or are No shows a pure specter in football?
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