Building Fan Loyalty Takes Center Stage

Venues are starting to look at ways to tailor fan loyalty programs, which have been applied mainly to sports teams until now, to bring repeat business to concerts. With any fan loyalty program, no matter how you go about it, the key to success is research, experts say.

"Most people who put together loyalty programs work from the back to the front — they already have some idea about points or something like that in mind. And that's usually the last place you want to go first," said Michael Lowenstein, managing director of Collingswood, N.J.-based Customer Retention Associates, and author of two books on the subject.

"Venues need to know as much as they can demographically or motivationally about the fans. Most don't know much, or don't know how to use or compile it, or use it in conjunction with other information," Lowenstein said.

Research for a fan loyalty program can find that customers want better lighting, faster concession stand service or different-colored seats, for example, Lowenstein said. "Everything you do has a loyalty impact," he said. "Some things you don't even think about might make a big difference."

It's important to involve both customers and staff in the process, and make sure not to run with "crackpot ideas," Lowenstein warned. A good program usually takes three or four months to pull together, he said.

Many concert fan loyalty programs will grow out of sports fan loyalty programs, venue managers say. "We have one here tied in with our hockey and arena football teams," said Frank Poe, director of the Birmingham (Ala.)-Jefferson Convention Complex's arena and president of the International Assn. of Assembly Managers. He said he looks to segue this program into concerts next season.

"Most venues that have a [concert] fan loyalty program, they'll come out of the sports teams that use it as a method of ensuring their fans or season ticket holders come to as many games as possible," Poe said. "It's bled over into other events, but there it's a little more spotty. It's probably a growing area. Venues are looking at a lot of different ways to increase attendance at events."

TICKETERS OFFER PROGRAMS

Ticketing companies that are launching fan loyalty offerings have found that venues are on the right track in looking to gather information on customers.

"When you have the same fan come in four or five times throughout the summer, you want to know what you can offer that fan to make it the best experience possible," said Terry Barnes, chairman and CEO of Ticketmaster Corp. "As a ticketing company, it's really the logical next step."

Ticketmaster bought Electronic Data Control Systems, including the company's Fan Loyalty System program, in July. "It's like a frequent flier program," Barnes said. "Some of the teams using EDSC have a huge following."

Ticketmaster is still in the process of integrating EDCS's Fan Loyalty System with their system and should be rolling out the fan loyalty system on a large scale, including music venues, in the near future. "I think the fan loyalty system will work across all venues," Barnes said.

Tickets.com Inc. Chairman and CEO Thomas Gimple said the company has been involved in fan loyalty programs on a less-formal scale all along.

"You really have to mine data and create fan loyalty programs. In the performing-arts sector, it's known as 'modules' specifically catered to donors or season ticket holders. It's being able to figure out who buys and proactively creating buying opportunities to let them go and buy again," Gimple said.

One way Tickets.com has worked with a venue to provide a customer perk is the "Double Play Ticket Window" on the San Francisco Giants Web site. This sanctioned resale allows fans to purchase the unused seats of Charter Seat holders. This could also be a good solution to those empty corporate boxes at teenybopper shows.

Seatadvisor.com, a hopeful competitor to the large ticketing companies, plans to offer smart cards next year that will give patrons rewards based on the amount of money they spend at the concession stands and other places within the venue, said the company's president, Brent Miller.

LOYALTY THROUGH VENUES

Running a venue-based program allows fan loyalty to hit both sports and concert fans at the same time. Austin, Texas-based Aim Technologies Inc. started their Fancard.net program with the NFL Kansas City (Mo.) Chiefs at Arrowhead Stadium this year.

Fans sign up for a smart card on site, then swipe the card in one of 20 to 25 kiosks located throughout the venue every time they attend an event. In exchange for answering three questions that provide marketing data for the venue, team or sponsors, the fan receives concession coupons and 10 points that can be redeemed for prizes. The top prize this year, for 350 points, is a photo with the managers of the Chiefs and the Wizards soccer team, said Chris Fox, Aim's public relations manager.

"From the venue's perspective, it drives fans or concert-goers to different things like concession sales with free soda or free popcorn, helping drive revenue," Fox said.

Aim's system was also launched at BJCC this season, drawing about 5,000 cardholders, Poe said. "We had a little apprehension about how it would be received by the fans, but we were pleasantly surprised," Poe said. The arena is reviewing the process now, he said. Some rewards, such as food and merchandise discounts, proved to be more popular than discounts to other events held at the venue, Poe said.

Aim is in the planning stages of an expansion into the amphitheater market, Fox said.

The Iowa State Center at Iowa State University in Ames — which includes Fisher Theater, Stephens Auditorium, Hilton Coliseum and Jack Trick Stadium — has been running a program called the "Stage Door Club" for years, according to Sara Huber, advertising coordinator.

A maximum of 300 patrons pay $75 annually for perks that include guaranteed seating reservations in the front 50% of the house before tickets go on sale to the public, a special parking area and newsletter.

There is often a waiting list for the club, which at one time had upwards of 900 members, until concert promoters complained about the program, Huber said. "They wanted to leave those tickets open to the public," she said.

The concert climate has changed recently, though, with tickets being more expensive and less in demand, so the presale reservations are less of a problem now, she said.

"I think the benefit to the venue is building those customer relationships and insuring to our customers that we're still here to bring in the concerts they want to see. And offer them a little edge in this technology world, a little more personalized service through that club," Huber said.

Most of the club members are locals or university faculty. The complex hosts 30-40 concerts each year, ranging from classical, jazz and musicals to mainstream pop and country. The State Center is the main concert venue in the area, Huber said.

AmericanAirlines Arena in Miami is working on an "instant winner" program that would give random ticket buyers prizes, such as free concession stand items or parking, said Eric Bresler, senior director of arena marketing and booking.

VENUE-SPECIFIC TAILORING

Tickets.com's Gimple said fan loyalty systems need to be carefully tailored to the specific geographic area, possibly partnering directly with retailers in that area on programs. "One of the things that's very different about ticketing, there are a lot of idiosyncrasies," he said. "On that database, all this information, if it's tied together, that's that key. Bringing outside sponsors to make things available to those fans, depending on what their preferences are."

CRA's Lowenstein agreed. "Programs can't be cookie cutter. You can take some general principles, but what works in Chicago, won't work in Los Angeles nearly as well. What works in Los Angeles, won't work in South Carolina nearly as well. There are different demographics in every area, different segments and 'microsegments,'" he stressed. Communications should be targeted to these specific microsegments, he said.

Venues should be keenly aware of their competition when formulating a fan loyalty plan, and figure out what they can do to keep the fans at their venue by "finding what they regard as value" and "minimizing the minuses," Lowenstein said.

"The main thing is to try to get strategic differentiation…alternative entertainment possibilities," Lowenstein said.

With next year's roll-out of print-at-home tickets, Tickets.com plans to help venues offer discount tickets to events to employees of sponsor corporations through the companies' intranet systems, Gimple said. "That can only happen if you have a really sophisticated ticketing system, with the ability to understand who your consumer base is," he said.

LOYALTY THROUGH ARTISTS

This VIP treatment is borrowed from artist fan clubs, such as Santana's, which offers tickets to fans before they go on sale to the general public.

This kind of fan loyalty can't be done from the venue side, however, said Jack Kaplan, president of North Brunswick, N.J.-based Datamark Technologies Inc. "You would be giving loyalty to the same people who would be coming to the event anyway. I feel what drives the events are the performers, and giving rewards or points is not going to change my mind about going to the event," Kaplan said. "You can't build brand loyalty on an entertainer. You can build it on a stadium."

Kaplan touts loyalty and stored value cards, and is currently in discussions with Planet Hollywood themed restaurants about using the cards he provides. He said he thinks this would be a good model for a concert venue as well.