What does digital disruption mean for sports and how do teams turn fans into customers? CXOTalk explores these topics with Jonathan Becher, who is president of Sharks Sports & Entertainment, the parent organization of the NHL’s San Jose Sharks hockey team and three ice sport facilities in Silicon Valley.
What does digital disruption mean for sports and how do teams turn fans into customers? CXOTalk explores these topics with Jonathan Becher, who is president of Sharks Sports & Entertainment, the parent organization of the NHL’s San Jose Sharks hockey team and three ice sport facilities in Silicon Valley.
Prior to joining Sharks Sports & Entertainment, Becher spent a decade at SAP in a variety of senior roles, including Chief Marketing Officer and Chief Digital Officer. A three-time CEO, Becher is a frequent speaker at technology industry events, and is a regularly published author on a variety of topics, including the popular blog Manage By Walking Around.
Becher was named by Forbes Magazine as one of the world’s most influential CMOs, most social CMO in The Huffington Post, and a top CxO on Twitter by Social Media Marketing Magazine. He is the Board Chair for the Churchill Club, Silicon Valley’s premier business and technology forum, and is the sole independent Board Member of both Trintech, the leading cloud-based financial Record to Report (R2R) solutions, and Pixlee, the leading visual platform for user-generated content. He is also an adviser to several early-stage companies.
Michael Krigsman: Everybody - everybody loves sports, and so today we're speaking about customer experience, fan experience, and the business of sports. Welcome to Episode #305 of CXOTalk. I'm thrilled to welcome Jonathan Becher, who is the president of the San Jose Sharks organization.
Before we begin, subscribe on YouTube. Please do that.
I've known Jonathan Becher for years, and so it really is a pleasure to welcome him back to CXOTalk. Hey, Jonathan. How are you? Welcome back to CXOTalk.
Jonathan Becker: Hey, Michael. Thanks for having me on. Episode 305, congratulations! That's a great and long run.
Michael Krigsman: You know it's a long run, and it's the guests on CXOTalk who make it. Jonathan, tell us about the Sharks.
Jonathan Becher: First of all, I'll start with an interesting point, which is, I'm president of Sharks Sports and Entertainment. It's a funny phrase, but the point is, Sharks Sports and Entertainment is the parent of the National Hockey League's San Jose Sharks, which is what you'd normally think about when you think of the word "Sharks." Plus, the American Hockey League San Jose Barracuda, plus four ice facilities, an event management business that hosts--I don't know--something like 175 events per year including concerts and family shows and, finally, a nonprofit foundation. When we talk about Sharks, sometimes we're talking about the overall organization and sometimes about the hockey team.
Michael Krigsman: These are really multiple businesses that you're running.
Jonathan Becher: That's exactly right. You can't really call them independent businesses because, in our big building, actually, which is named the SAP Center, which has a little bit of my history--maybe we'll get into that a little bit as well--are the San Jose Sharks, the San Jose Barracuda, and the concerts are in that building at the same time. But, they're individual P&Ls, profit and loss statements, and they don't always have the same customers because somebody who comes to a Sharks game may not be the same person that goes to a rock concert or a Hispanic show or Latino music, et cetera. We have to treat them as individual even though they're interconnected.
Michael Krigsman: As the president of this organization with multiple components, what do you do? What is your role?
Jonathan Becher: Yeah. It's slightly complicated, but I'll make it pretty simple, which is, if I look across this end-to-end, there's really three leaders. We can call it a triumvirate if you want. I actually have a co-president, which is a long tradition in technology. You may remember we had co-CEOs at SAP for a while as well.
We're responsible for the business operations of the franchise, and there's a general manager for hockey. For hockey, you think coaches and players. On the specific things, I tend to focus more on fan engagement, on sales, on marketing, on PR, on analytics, and other infrastructural stuff. My co-CEO tends to be--I don't know--the phrase might be back office, but on event management, on the building operations, et cetera.
None of the three of us divide this up into pieces. Think of this as kind of major and minor in college. I might major in the customer-focused stuff. He minors in it, and he might major in the building operations, and I minor in it. Or, if you want to be slightly more sexy about it, we can call it yin and yang as opposed to major and minor.
Michael Krigsman: Jonathan, we're going to dive more into this but, before we do, as I said, I've known you for many years, and you were a technology executive. You founded a number of different companies. You were a top executive at SAP, and so why did you decide, first off, to jump over to the sports world from technology?
Jonathan Becher: I guess it's easy to put the label on me as a technology executive. After all, as you said, I was a CEO and a senior executive at technology companies, but I never really thought myself as a technology executive. What I thought of myself as an executive who is customer focused. A lot of what I did, particularly over the last decade, was to work on technologies and processes that engage customers, I mean these days what would be called customer experience or customer engagement, although, frankly, it wasn't called that for an entire decade. That function is not fundamentally different often among industries.
Having said that, look, I did work at a technology company and now I work at a sports and entertainment company. I think if you go back and find the roots, the roots of that change actually happened when I was the chief marketing officer of SAP probably around about seven years ago. There were two sorts of issues, you could almost call them problems, that I was thinking about.
One is, because I have an analytics background, we're trying to think about how to expand analytics from beyond large companies to small and medium-sized businesses. The challenge is, small and medium-sized businesses are often family owned and managers there use their gut much more than they use data. And so, we were trying to find ways to break through that bias that gut is more accurate and better than data.
Then the second challenge I was working on is, SAP wanted to expand its brand from purely B2B, business-to-business, to B2B2C, meaning have an impact on consumers. One day, it just sort of hit me that those two problems were the same problem and that if we could find a way to show viscerally that data emotionally was better than your gut, we could solve both problems. Sports was a natural way to do that.
We ran a series of video and digital ads that talked about, for example, a pitcher coming in, in late innings in baseball, pitching on maybe one day's rest, the cold weather to a lefty, et cetera, and your gut would tell you he's going to strike him out but, in reality, there was a home run, and compare what the data would predict by your gut to what actually happened. Amusingly and, frankly, unexpectedly, the best things happened unexpectedly. That led to us starting a sports line of business when I was at SAP, which I helped launch.
We ended up doing these technology deals with the NBA, with the NFL, et cetera. I won't say culminating, but one of the big steps there is, I negotiated the naming rights for the building that I'm now in, changing it from what was once called the HP Pavilion to now the SAP Center. That got me really deeply involved in the business of sports. When I left SAP a little more than a year ago, a year and a half ago, took some time off. The next natural step was to become an executive focused on customer success in the sports world as well.
Michael Krigsman: The common thread is what we now call customer experience. That's the point.
Jonathan Becher: I would agree. Exactly right. Thinking, if you will, outside in from the customer's point of view and how does that change how you run your business. Actually, I don't like the phrase, "Put the customer in the center," because that sort of suggests that you're surrounding them almost in an antagonistic way.
It's, how do you flip your mindset from internal business process functionality operation-oriented to externally first what they need. If we go back to business books written 20, 30 years ago, it's the modern version of walking a mile in their shoes.
Michael Krigsman: I want to remind everybody that, as always, there's a tweet chat taking place right now. You can ask our guest, Jonathan Becher, questions using the hashtag #CXOTalk.
Jonathan, when we talk about customer experience in sports, like for the Sharks, what does that mean? What are you referring to?
Jonathan Becher: Yeah. In some ways it's very similar to the customer experience in a technology company or the customer experience in a retail or any other industry and, in some ways, it's fundamentally different. One of the ways to see that it's nearly identical is just to think about your digital footprint or how you engage socially.
For those of you that know me or have interacted with me before, you know that I'm a social person both, frankly, in real life and in the digital world. But, everybody, almost every industry, has learned that social is less about the media. It's less about a shouting platform. It's less about a way of amplifying your normal marketing or PR and getting out of less cost and more about a listening platform and a way to interact with people and removing layers from the consumer of your product and the producer of your product.
In sports, like in any other line of business, we spend a lot of time listening to what fans--and there's a distinction between fans and customers--what fans want and what customers want. Some of that is simple customer service. Their digital ticket doesn't work. Can we interact with them? They want a particular jersey, but they can't find it online or in the store. Or, they don't like something that's happening on the ice, that we can do from a service. We use it sometimes to design new products as well but, most of anything, it's authentically engage and brand personas of who you are shine through, not just corporate brand personas.
You will see me interacting as a human being, as a person. I actually even describe myself in the digital world as a fan first and the president second. That part hasn't really changed much. Digital and social techniques are roughly the same, similar technology.
What is fundamentally different, however, is what the experience mean. I'll give you a hint. If you want more detail, I'm happy to go into it. That is, in the good old days--and I'm never really sure when the good old days were, so let's say ten years ago-the formula of success for a sporting game was pretty simple. If the hometown team won, and maybe if the beer was cold, then the fans left happy. These days, it's a lot more complicated and things like lines for food, the quality of the food, traffic patterns, et cetera have almost as much to do as the product itself, meaning the sporting experience.
Michael Krigsman: This notion of authentic engagement, that's the foundation. It's really the foundation of a lot of modern marketing. How do you think about conveying that sense of authenticity and remaining true to the brand promise that you have as well?
Jonathan Becher: First of all, you have to know what our brand promise is in order for some of this to make sense. We think of ourselves and our players, actually, more than ourselves, as hometown heroes. Our players live in the community. They're part of the community. They give back to the community.
Our building itself is, in some sense, one of the main anchors of downtown San Jose. We program our building based on who lives near here. We are--I would bet and I've seen some data that suggests--the most ethnically diverse fan base when it comes to both hockey and concerts in general across all of northern America. We use that to say, what kind of show should we have and who do we market to?
Given that we are the anchor, you know, hometown heroes, that spirit is a big part of our brand identity. We look for sometimes what are very simple acts. Our players live next door to regular fans. You can find them in coffee shops, in subway kind of sandwich kind of things just talking to people. That's the beauty of actually being here in Silicon Valley is you can rub shoulders with anybody else and just be yourself. That ethos of being part of the community sticks with us.
Just to give you a couple simple consequences, that means our inexpensive seats are probably some of the best prices in sports. We actually have seats in the building with great sightlines, not up in the rafters, that go for $30 for a game, which is pretty affordable. If you go to our Barracuda experience, you can often get in for $5, and we have $2 beers and $1 hotdogs. A lot of what we try to do is be part of the community, and that's part of that not just social and digital footprint, but in real life footprint as well.
Michael Krigsman: Is brand promise the foundation or the beginning point of creating authentic customer experience?
Jonathan Becher: Yes and no. The reason I worry about saying yes is, promise suggests something that you may or may not be able to lead up to, and so I tend to use brand identity; who you actually are. It's not a promise of who you want to become, but it's who we actually are. Therefore, if it's who we are, it has to impact who we hire, how we train, how we act. If you were to change your phrase to say brand identity is the core to all this, I'd say 100% agree.
Michael Krigsman: I think that, at least in the software industry, there are a fair number of companies that don't really know who they are. They have a brand aspiration, "We want to be great," or whatever it is.
Jonathan Becher: Yeah.
Michael Krigsman: They don't really have a clear brand identity.
Jonathan Becher: I think that's probably reasonably true as well, and I'm not sure. I mean in some sense the brand is a collection of who you actually are, and it could be aspirational. We have an aspirational vision as well. Again, I'll talk less about software companies now given my new role than maybe my past ones, but I will draw a parallel here, which is, one of the things we did when I showed up here, and I started in January of this year even if it was announced late last year, is we created a new vision statement, a new mission, and a new set of values. Our vision statement is what I would call a BHAG: a big, hairy, audacious goal. Our vision statement says we want to pioneer the future of sports and entertainment.
We're not there yet. You can never already be the future of sports and entertainment because, no matter when you get there, the future is always further. But, pioneering becomes part of our spirit and part of our brand identity. What does that mean? That means we're constantly going to experiment on things, and that means some of those experiments are going to work out and some of those experiments are not going to work out, but that's part of our brand identity.
Again, I give you a very tactical example. We were one of the first in sports, and I think maybe the first in hockey, to go to essentially 100% digital tickets. That means you don't get the paper-based tickets anymore, although we do have an option for people to get paper made tickets if they don't have a smartphone. But, in Silicon Valley, that's a small subset of people.
Now, because we were first to go to digital tickets, lots of things hadn't been worked out yet. We still had some challenges with our own application, with the third party infrastructure that we used as well. Frankly, there were some disgruntled fans that said, "You don't have this right on opening day." That was last year.
But, that pioneering spirit said, "That's okay to make mistakes. We're sorry that we did that to our fans, but let's learn from those and not make the same mistake twice." We continue to push on technology. We continue to push on programs because the identity of who we are is, we want to be pioneers. That goes back 27 years to founding the franchise.
If you go back 27 years ago or, frankly, 30 years ago and said, "There's going to be an NHL team, an ice team in northern California," that might even seem laughable. This is a land without ice. People don't grow up on a frozen pond playing hockey. No one would have thought that the NHL would do so well in California and now there are three teams here: one in northern California and two in southern California. That is the kind of pioneering spirit we want to keep and, frankly, that's part of the brand identity.
Michael Krigsman: Jonathan, you talk about being a pioneer in sports and entertainment. Why that linkage, sports and entertainment? Why not just say, "We want to be the best sports team in the world"?
Jonathan Becher: Yeah, fair enough. Well, first of all, the best in the world is always a tough thing to do because, you know, we don't play basketball, so we can't be a be a better basketball team because we're in hockey. Ignoring that for a moment, sports and entertainment are two sides of the same coin. You may have heard me say at the beginning, the official name of our organization is Sharks Sports and Entertainment. Why? Well, there are a whole bunch of reasons.
The simplest reason is because we're not just about hockey. I mentioned we have 175 events in our buildings. We have concerts: rock concerts, classical concerts, specialty shows, et cetera. We have family shows: Disney on Ice. We had a tractor, a monster truck kind of thing as well. We have convention style events. Michelle Obama is coming to give a talk in our building as well.
Those things are entertainment. They have nothing to do with sports as well. If you were just simply to look at the number of events, I think last year we did about 175. It's roughly half of them are sports and roughly half of them are not sports, so it's "and entertainment."
Ignoring that, let's just concentrate even on the hockey half, that I think in the original days of sports, if we go back 20 or 30 years, was still probably sports and entertainment because it was about exciting the passion in people. It was about entertaining them. It was maybe capital S sports and little e entertainment. But, an interesting thing has happened with a new generation of fans coming in, with digital changing the way you consume sports as well, it's about being entertained.
If you come to any sporting franchise, any game, I assume you've seen this in your life as well, Michael, there are more and more things around the game itself to entertain fans. There's more music. There are more distraction and contests, whether those are between periods or in the concourses, et cetera. There is more food.
Actually, one of the biggest changes in sporting events has become a destination for foodies as well. If I just look at our building, it's gone from the old hotdog and hamburger to hundreds of different specialty items and some amazing food, which maybe we should talk about because it'll make us both hungry and want to actually leave this broadcast and actually go eat something.
The point being is, these days, to put on a successful sporting event, you have to think about the end-to-end experience. The end-to-end experience is about entertaining a customer, not putting on a game.
Michael Krigsman: As I've spoken with other sports executives, one of the clear themes that emerge is competition. And so, who are your customers and who is your competition? It's directly related to this point you were just making.
Jonathan Becher: Michael, we could probably talk about both of those questions for hours. Let me start with a simplistic way of thinking about it and then we can go from there. First of all, we don't have a simple to identify customer. Obviously, a hockey customer is different than a concert customer, which is different than a practice facility customer, which is different, et cetera. We have four major lines of businesses. We have four very different kinds of customers.
Even inside each of those, the person that goes to a rock concert is different than goes to a classic music [concert]. Even within hockey, there's not a single customer. We have extraordinary loyal fans. We have season ticket holders that have been with us since this building opened 25 years ago, even before then when the franchise started 27 years ago, and we have people that have only been with us intermittently during that time period.
What I would say is the classic customer segmentation approach is where you have, let's say, eight big segments, doesn't really work that well. We're not yet at the point of what marketers would like to call the segment of one, but we're moving in that direction.
Instead of us trying to force fit customers into predefined segments based on who we think we are, we flip it around and say, "Who are they and how can we best serve them based on dozens of business processes and dozens of templates?" It's not putting them into our buckets. It's trying to put us into their buckets. That switch is a psychological change for marketers, salespeople, and operational, which we're probably halfway through.
You asked the second question, which I'll try to answer quickly as well, which is, who is our competition? That's also difficult to answer, but if we just focus again on hockey, on the Sharks, it's tempting to say that the person on their living room couch watching TV is our primary competition with 4K TV, with digital distribution. The view of the game is almost as good as it is at the venue. To be fair, that's happened less in hockey than it has in other sports. Hockey, at least in my opinion, and I know I'm somewhat biased, hockey is a sport that's best appreciated live. The nuances have not yet been captured as well, in my personal opinion, on TV, as maybe some other sports, which you have just as good, if not in some cases better experience, than watching it live.
What we find is fans don't get hooked as much if they only ever watch on TV. They get hooked with the in-game experience, which lends to be interesting, which is, I actually don't want the entire building, roughly 78,000, sold out with season tickets because, if I do that, I have a limited opportunity to have new fans experience the game. I actually want--let's oversimplify--roughly half or a bit more to be season ticket holders and the rest to be more casual fans that get to experience it, so I can touch a lot more people.
It's also that I'm not really competing with other sports teams, although I know that's common for my colleagues to say, because I find that people are avid fans of one or two sports at most, not of five or ten. To me, what I'm mostly competing with is time and attention, the other entertainment dollars, the games of Fortnight so people will just sit on their couch. To me, it's the attention span of what I'm competing with, which is why it can't just be the hockey game. It has to be all the entertainment and is why it can't just be for the three hours on game night. It has to be 24/7. I could imagine that if we fast-forward ten years, we're not sports and entertainment franchises; we're content factories.
Michael Krigsman: This notion of the need to engage the fans and develop their mindshare.
Jonathan Becher: Yes.
Michael Krigsman: It sounds like a lot of what you're doing is oriented around that ongoing mindshare that goes far beyond any specific event.
Jonathan Becher: Absolutely right. You know how retailers used to argue and talk about share of wallet? We're trying to play with the idea of what's share of mind. Although, it sounds a bit creepy, so maybe that's the wrong phrase to use. Anybody out there on social media who have got a better idea, feel free to tweet it out or use whatever method you want.
The, "How often do you think about us? How often do you talk to your friends, even your competitors, et cetera, about what we're doing?" if we're engaged in the conversation, that's great.
Michael Krigsman: How do you do this?
Jonathan Becher: I think the first way is to not start with the transaction. I said earlier in this, and maybe you even said it as well, that my primary job might be customer experience and this market is called CX, customer experience. I'm not sure that's the right way to describe it because "customer" implies transactional relationship, and then immediately ask you to think about lifetime value and all that and start creating commercial parameters around that.
Maybe the answer is fan engagement or fan experience. Again, it's not semantics. What I'm trying to get at is a vast majority of these situations, we as Sharks Sports and Entertainment, may never have a commercial relationship from those who are the most passionate about us. A large fraction of our fans, depending on whose numbers you believe, it could be a quarter or even more don't live in Silicon Valley and so aren't probably going to come to my building very often. Maybe they don't come whatsoever.
They are still passionate about our product offering. How do they show their passion? They engage in social media. Perhaps they buy merchandise. If they buy merchandise, they're probably not buying it from me because they're physically not coming into the store, so they could buy it online or maybe in their local retailer. That's not money that I'm involved in. Yet, their experience there is important to me as well.
Part of what we try to do is create stories around the brand that show who we actually are and who the players are and, better yet, allow others to amplify and tell their own stories as well. Two things there: One is, in some sense, and I hope none of them are listening, our players are in some sense our product.
What's great about hockey players is they're easily relatable. They aren't a lot bigger than the average human being sometimes like some sports are. They aren't a lot taller than the average human being. When you meet them, they are like you an I, except for they are superhuman when it comes to their powers to play hockey. Helping them tell their own stories becomes much more relatable.
We have a fantastically outgoing hockey player named Brent Burns. One of the best defensemen. Won the Norris Trophy a couple of years ago. He has this massive ranch down in Texas, and so he invited us down onto his ranch in the office season. We filmed essentially what is kind of an off day sort of segment about his life on the ranch where you see beyond how he is and he plays on the ice, but his interaction with his animals, with his family, et cetera, that showing the authenticity of what's going on sort of gets the stories going.
We also have fans who tell their stories. There is, frankly, more people analyzing how our Sharks players are doing that are non-official media than there are official media. Helping their stories get amplified and tell it, whether they are bloggers or otherwise, helps create what we call everywhere is Sharks territory, and not just here in Silicon Valley.
Michael Krigsman: Fundamentally, that's the kind of core pillar is creating that ongoing sense of community that's independent of location.
Jonathan Becher: That's exactly right. I said earlier that part of our brand ethos, our brand identity, is hometown heroes. It's tempting to say, well, the hometown is only San Jose. Yes, it's centered there. But, if we can create that passion, that sense of being there everywhere in the world, then we've done really well.
Frankly, some of our most passionate fans are in the hometowns where some of our players come from, which could be Eastern Europe, Canada, pretty much anywhere in the world. Right now, we have five players on the team that are from Sweden, and I'm seeing an awful lot of Swedish tweets in my timeline, which is kind of cool.
Michael Krigsman: But still, the foundation must be the team and the success of the team in games.
Jonathan Becher: For sure. Of course. Nothing replaces the fact that people love hockey and they come to watch hockey. The better you are, the easier it is to engage people. We've been blessed, and we've made the playoffs 13 of the last 14 years, 18 in the last 20 years. We've been the model of success in hockey and, in some sense, in sports overall as well. In the last 15 years, more or less, no team in hockey has actually won more regular season games than we have.
There are plenty of times where the home team wins. But, if all you do is rely on a winning game means people are happy and a losing game means they're unhappy, then you're too episodic because you're always going to lose some. You don't win every single game, so you have to go beyond just your identity is whether the final score shows that you were more successful than the other team. That can't be the only story.
Michael Krigsman: How much of your effort is devoted to this notion of developing this broader sense of participation and people feeling that they're part of your community?
Jonathan Becher: I think virtually everything we do is anchored around that. I'm not sure I could give you a percentage. For sure it's more than half. It's one of the reasons that we invest significantly in the foundation as well as a nonprofit to give back into literally our physical community because the community is both digital and online. It's in other places that we don't touch every day, but it's, as I said, physically anchored here. Whether it's helping build a playground for a school that might not have one, whether it's using our players to help teach math or education in ways that haven't done before, whether it's simply just granting money to organizations that need it more than we do, all those help build community in ways that you wouldn't expect as well.
Michael Krigsman: To what extent does this permeate the various departments inside your organization, this attitude?
Jonathan Becher: Yeah, it's hard to describe unless you were in our building and see it, but being authentic and in the community, and being a shark is our identity. Permeate, again, somehow suggests that it's a foreign body that came in, which goes back to that comment of, it's our identity; it's who we are.
We actually describe ourselves internally as Team Teal. Teal is our color. I think we were the first team in professional sports to use teal at the time that we actually launched our iconic jersey and logo back in 1993 or Stavro in '91. I still think, actually, voted the best jersey of all time in the National Hockey League, so because that's our identity, we talk about it all the time.
We actually have a series of pioneering principles. Remember, I said pioneering is a big part that we talk about that include these things in our ethos. We actually have monthly all-hands meetings, which we call Team Teal Meetings, in which people that go above and beyond to show these values get awards every month. The awards do not come from management. They come from their peers. They're nominated. They're voted on by their peers as well.
Again, permeation sounds somehow foreign. It's who we are. It's our identity.
Michael Krigsman: Would it be fair to call this the digital transformation of sports or is that just the wrong context and phrasing?
Jonathan Becher: I tweeted out right before the show that I promise not to use any buzzwords. If I say, "Digital transformation," it's going to sound a little bit like a buzzword. You can call it that, but I'm not going to call it that.
Michael Krigsman: All right. What will you call it?
Jonathan Becher: For sure, sports and entertainment is going through a disruption. Part of that disruption is digital, and so, yes, sports and entertainment is fundamentally transforming, but it's not just digital. There is a cultural transformation, et cetera. It's going from putting on games to, as I said, engaging with fans on an hourly, minute basis.
To say digital, yes, that's part of it. I'll give you a simple example. Last year, you know bobbleheads, right? I'm shaking my head like a bobble. We do some of the best bobbleheads in sports. I think last season we did 12 or 14 of them. We win some awards from those.
Last year, we ran an experiment, which was cool. We actually created the first augmented reality bobblehead. On the bobblehead itself, there was a QR code. It turns out Logan Couture, one of the best forwards in hockey on our team, and that QR code, you could actually use our digital app to get some background information. Essentially, a day in the life of Logan, which would explain some of the features of the bobblehead and go sort of beyond. Therefore, you could self-identify a little bit more with professional athlete. That augmented reality is now something that we want to use on lots of different situations.
I mentioned digital ticketing. We actually are seeing, in Silicon Valley, a phenomenon, and I think some other teams are seeing it as well, of late-arriving fan. What that means is it's getting harder and harder to get to the venue because of, frankly, traffic. Where it used to be that 70% or even 80% of fans would be here by puck drop, the opening ML, on some nights it's as little as 60%. They show up, but they show up during the first period.
Well, we want to give them incentives to come in earlier, maybe eat in the building rather than go home to eat or go to restaurants downtown. Again, we put beacons into the building. We tried out, using our digital app, an incentive that we push to them. If you're in the building, let's say, 30 minutes early before puck drop, you might get $10 off or 10% off food in a particular stand or maybe merchandise anywhere in the building.
All these things are digital and, therefore, might make you want to say, "Yes, the digital transformation of sports is happening," but it's not just digital. It is the cultural transformation to program around fan needs as opposed to program around the operational needs. I mean I guess, if you really, really wanted to say it was going to be digital, then I should be talking about robot servers and maybe even robot athletes one day, but that seems to be a little bit too farfetched.
Michael Krigsman: Well, it seems the key point here is you're using every means at your disposal to support that mission which, in your case, is the building of engagement participation and community. Some of those are technology, and some of those are how you run the business.
Jonathan Becher: Well said. In many cases, it's simple business processes rather than technology.
Michael Krigsman: What advice do you have for companies that want to replicate this kind of sense of community?
Jonathan Becher: Community is kind of like culture. You can't just declare it to be so and hope it happens. Community is about authentically changing what you do and living it every single day. Most communities are anchored by people not employed by the brand that want to create the community.
For sure, as a brand, as an organization, I can set up the community. For sure, I can provide incentives to the community. But, the community has to self-police. The community has to have its own evangelists. The community has to be almost self-regulated. It has to be something that you feel like you don't control but you participate in.
One of the things I see and, again, by community I don't necessarily just mean a message board on steroids. I mean literally a community. Stuff is going to happen, and the community members are going to say things that make you uncomfortable. How you react in those moments of uncomfortness tells you a lot about whether you're community-minded as well.
I remember a conversation I had with an executive in a former life where I said, "Well, we should scrape conversations off the social Web, not just in our managed community but that happened, and surface them on our website, our dot-com. This other senior executive said to me, "Well, what happens if they say something extraordinarily negative about us? Isn't that going to be bad?" My answer, which I think is a different way of thinking about it, is, "What happens if people are saying something negative about us and we don't know?" Knowing is much more powerful because you can interact, figure out what the root cause is, et cetera.
If you want to engage authentically and build real community, you've got to have a little bit of tough skin. You've got to be willing to be open-minded, be willing to say, "I want to be the best I can be and, to be the best I can be, I've got to get negative feedback and positive feedback." It's not just about praise.
Michael Krigsman: We have a question from Twitter, an interesting question from Steve Massi going back to some things we were talking about earlier. How do you recognize the revenue that comes from non-revenue driving fans even though you believe non-revenue driving fans are valuable to your brand? Basically, how do you deal with these fans who are not driving revenue? It costs you money to support them.
Jonathan Becher: There are two complementary answers to that. The first answer is to resist the temptation to immediately say, "How do we turn a fan into revenue?" If you resist that temptation, then lots of other good things happen.
We've actually done some informal studies. I will say the science behind this is not as strong, which suggests the more fans that you have, the higher the revenue you'll get because second-order effects will happen, even if they buy from somebody else, even if they show their pride, you're more likely to sell out a game. The tickets on the secondary market increase in price as opposed to a decrease in price. You get more word of mouth, et cetera. The second order effects happen, but you have to believe in the value of fandom. Yes, it's an investment, but investments are typically long-term things and not every investment in long-term can be done ROI.
As an overly simplistic answer with a fan who lives locally, if you invest in fans, then maybe someone will take up the sport of ice-skating or curling or something else. If they do that, they may want to try out, and they may show up at one of our practices. They may never buy a ticket to a game, but we might actually still one day make money off of them or maybe they'll tell somebody else who then will go to a game because they'll want to try out as well. You have to believe in the power of word of mouth, which we believe, fundamentally.
Michael Krigsman: As I hear you talking, it comes across to me or it comes to mind that you're really talking about invest in the community and the revenue will follow, either directly or through those second-order effects that you were just describing.
Jonathan Becher: Well said. I might borrow that from you, Michael.
Michael Krigsman: Hey, my phrases are yours to own.
Jonathan Becker: By the way, you have that on video, so I'm going to borrow all your phrases. [Laughter]
Michael Krigsman: [Laughter] Okay. We have another question from Twitter. What about millennials? Are they doing things differently? How do you think about millennials?
Jonathan Becher: No. I don't know why millennial-bashing is a sport. For sure, every generation, at least that I've lived through, likes being somehow different than the previous generation. Maybe that question is, what has changed in recent years? I will say a couple things have changed, but it's not just limited to millennials. I think it's changed almost across the board.
First of all, by and large, sports is seeing less and less fans signing up for what would be full season tickets. We're not just seeing it in the Sharks. They're not just seeing it in hockey. It's happening across sports, particularly sports with long seasons. We have 40-some home games, 82 games across the entire season. Basketball has about the same. Baseball has even more. Football, American football has a few best games, of course.
Because of shorter attention spans, of course as well get busier, distraction, the competition for other entertainment, as I mentioned earlier, it's harder and harder for a fan to go to 40 games. Actually, I don't mind this trend because it means that roughly half our building is going to be season ticket holders. But, that's turned into a rise of what I call partial plans. Half season plans, for example, have become very popular in recent years. I think it's the single highest growth part of our business right now in terms of percentage.
We have something we call a Shark Hack, which is a partial, 11-game plan as well, which is essentially a quarter season, if you do the math. The movement from always doing season ticket holders and then go all the way down to individual games, is sort of settling in the middle, which is partial plans. That's a phenomenon that's happening as well.
Another phenomenon in is arrival of foodie-ism, I guess, if that's a word. I'll admit that on the fly. If you go back a decade, most of the food that you could buy in a ballpark or an arena or outdoor stadium was limited to simple staples. Obviously, the beer or the hotdog and the hamburger. Now, if you go to many stadiums, particularly ours, there are all kinds of different foods there.
We spent the summer revamping our menu again. The fan reaction has been phenomenal in the preseason games and some of the concerts we put on. We invited a lot of local specialty foods, for example, Nick the Greek, Konjoe Burger, Scott's Seafood. I don't want to give too much shout outs to all of them.
We invested heavily in our own food as well. One of the things that's selling phenomenally is we have our own brand of cookie dough called Jane Dough, which is a nice little pun on that as well. There are a lot of specialty brews now, so it's not just the national brewers but the microbrewers that are in the building as well. Food, as a destination, is again a big part.
Then, finally, music. Actually, one of the amusing things that happen to me often is, if you're a loyal fan, I love you. You've been in our building for 25 years. By and large, you like more traditional rock and roll. If you're a younger fan and you're in our building, you want a little more hip-hop and sort of modern. No matter which I play, somebody else complains, so you can't win.
Michael Krigsman: Jonathan, as we finish up, we have just a couple of minutes left, we have a really interesting comment from Shelly Lucas on Twitter who says, "Rather than focusing customers into buckets based on who we are, we," meaning you-this is your comment--"look at who our customers are first." I'll just ask you for advice as we finish up for companies, whether sports or non-sports, how to look at customers that way rather than just as dollar signs.
Jonathan Becher: Yeah. Hi, Shelly. For those of you who know me, you know I'm a long-time marketer and was a CMO. Part of the issue is the language we use. I don't think I realized for a long period of time, phrases like "target the customer" just give us a mental model of, we've got some payload; we've got some things that we're just trying to find who it is out there that wants what we have to offer, and switching the mental model of the outside in that I've mentioned a couple of times of starting from who is out there that might want to engage with us and what do they need, and can we service their needs? That mental model, which is what I think software as a service was intended for us to think more about, is a huge mental shift that helps marketers a lot.
Sometimes what they need isn't a commercial transaction. Sometimes what they need is better education. Sometimes what they need is a connection to somebody else that has a similar problem that's willing to hear them out. Sometimes what they need is just a repeating of something you've done before. That listening, you know the old proverb "two ears, one mouth" kind of stuff.
Now, a lot of people have started down this direction with customer journeys, et cetera. My worry when I did this in the past and with a lot of my colleagues in the past, is the customer journey always had the outcome of, "How do we sell them something?" And so, if I give you very tactical advice, it's building customer journeys that don't always have the outcome of having them buy something.
Michael Krigsman: You're sort of stabbing at the heart of how many marketers think here, Jonathan.
Jonathan Becher: I know. I know. I've always been a contrarian. Sorry about that.
Michael Krigsman: There are marketers around the country right now, around the world, who are just kind of dying inside.
Jonathan Becher: No, they're not. I think we all know this. By the way, another lesson I've sort of relearned as a marketer is, we've been talking about it for almost a decade that B2B and B2C are coming together. Look, my last job was clearly as a B2B marketer that was trying to use B2C techniques.
Now I'm in a B2C business realizing that I need to use B2B techniques because more and more of what's happening is companies are buying blocks of tickets for their employees or ways to host their employers, et cetera. It's not just the season ticket holder. It's not just the individual. It's corporate stuff as well.
All of the classic yarns of breaking down that, they're all coming true. I'm living them in my own life, which is one of the reasons I love the job.
Michael Krigsman: Okay. Well, it's an interesting job and, unfortunately, we are out of time. I want to say a huge thank you to Jonathan Becher, who is the president of Sharks Sports and Entertainment, which is the parent organization of the San Jose Sharks, as well as the SAP Arena and other organizations and venues in the San Jose area. Jonathan, thank you so much for taking the time to be here today.
Everybody, thanks so much for watching. Don't forget to subscribe on YouTube. Go to CXOTalk.com, and you can check out lots and lots of other great videos. Have a great day, everybody. Bye-bye.
Published Date: Sep 28, 2018
Author: Michael Krigsman
Episode ID: 550