I recently wrote a piece for the “Team Marketing Report” newsletter. Here is part 5 of 5
5. What are some of the initiatives the Colts have taken to improve Web site ROI?
Return on investment is a straight forward concept. Add up revenues, subtract expenses and you’ve got ROI. In my opinion we need to focus on the lifetime value of every fan across our entire enterprise, not just the Website, but we also need to realize the Website can help us maximize that value by increasing revenue AND reducing expenses through lower communication costs.
We also want to consider a new concept we call “revenue per fan”.
Our fan base has quadrupled over the past 5 years, but our revenue hasn’t. Don’t get me wrong. Our revenue has increased, but not at the same pace as our fan base. Why not? The answer is simple. We have been selling finite inventory. There are approximately 56,000 seats and 100 suites in our stadium. These numbers are fixed and the prices, while we raise them a bit most every year, don’t go up as fas as demand. (that’s what the secondary market is for, but that’s a subject for another post). Anyway, our revenues hit a ceiling when we run out of things to sell. That’s what makes the Web so exciting. It not only brings us in contact with millions of fans who we never see at the stadium, it gives us context within which to do business with these fans.
Is it possible to increase the number of fans AND the amount each fan spends?
That’s what we’re after. Our football team takes care of the first part. They win games and that puts us on national television and our fan base grows. But how do we know we’re making more money from these new fans? Every year we’ll add up our total revenue, divide it by the number of fans (NFL does annual research) and arrive at our revenue per fan. So far our fan base has been growing so fast that our revenue per fan has dropped even though overall revenues are up sharply. I’m looking forward to a day when we can generate annual revenues of $6 per every unique monthly visitor to the Web site. This would equal the revenue generated from our stadium naming rights deal. Now THAT would turn some heads!! But we’re nowhere near that figure yet. So our goal is to measure the value of each person and the value of each piece of content, and continually improve both.
On the expense side of the ledger, we need to measure the value of content on the Website, for it is content that attracts people to the site, and creating and distributing content is what costs the team money. Some content attracts more visitors and drives more desired behavior than other content and that content has a higher value.
Of course measuring ROI is difficult unless you know what you’re putting in and what you’re getting out. That’s not always easy. For example, we’ve got 1 million unique users every month coming to Colts.com. From the little bit of research we’ve done, we can see that 90% of these visitors seem to be avid Colts fans. We know from NFL research that there are 6 million Americans who say the Colts are their favorite team, and that approximately 30% of those fans are avid. Just doing the simple math it could be inferred that nearly all of our avid fans visit our site on a weekly basis during the season. So the Website is a very efficient channel to communicate to our most avid fans, and it is available 24/7/365. Even if we didn’t sell any sponsorship and didn’t sell any merchandise to these visitors, there is certainly value to both the team and the fan to the extent that the visitor becomes engaged in a positive Colts experience that will deepen his or her bond to the team. But the intrinsic value of a team website is often discounted when I go to ask for more budget to support Web based programs. (Those of you out there who run Web sites no doubt know what I’m saying).
Plus, on the ticketing front we decided last year to begin to allow fans to order season tickets on our Web site. Previously we had promoted tickets on our site, but didn’t allow fans to complete the transaction on-line. Well this was a huge success. Several million dollars worth of tickets were sold via the Website and thanks to our recent success on the field thousands of fans joined our season ticket waiting list via the Web. It’s possible that these transactions would have happened off-line, but they wouldn’t have happened as quickly, or as efficiently. So at the very least our Website reduced our transaction costs and (hopefully) made another positive impression with our customers simply because the site made it easier for the fan to buy our product. But again, exact ROI is tough to measure. How much direct credit do you give to the Website for a transaction that might have happened anyway?
I should come back to the 6 million fans, though, because that’s the key. How much business are we doing with these people? Well, for years we have done very little beyond entertaining them whenever they happen to visit our site; but what if we get more intentional about monetizing our relationships with these fans. Imagine if we could capture an annual revenue stream of $10 per fan. That’s a $60 million opportunity!
I believe revenue numbers like this are entirely possible to achieve. Our fans have purchasing power that far exceeds $60 million annually, but we have never focused our efforts on anything except selling tickets to our stadium. Now that the stadium is sold out we’re asking ourselves how can we do more business with our other fans – the ones who visit our Website every day?!
To put it in perspective, we see approximately 280,000 unique individuals at the RCA Dome each year over the 10 game schedule; and we see approximately 280,000 unique individuals EVERY WEEK at Colts.com. There’s the equivalent of a stadium full of people visiting our site EVERY DAY but we’ve been so focused on the local, tangible, analog audience that we simply haven’t gotten around to engaging with this digital fan base. This, in my opinion, is the single biggest growth opportunity we have.
