Sport and Technology - news and features on the use of technology in sport

The monthly e-newsletter covering the impact of technology on the business of sport

Feature: Ticketing technology gets smarter - October 2003

Against a backdrop of technological developments and incremental revenue streams around ticketing and travel packages to sports events, ticketing is a revenue stream that is being afforded increasing attention by venues and teams globally, writes Rachael Church, Editor of Sport and Technology. For some sports properties, ticketing revenue can represent over 75% of their total revenues.

The three main areas of technology making an impact on ticketing according to industry sources are the internet (via dial-up, broadband, interactive television or wireless services, with SMS messaging also coming into play for mobile phone users), customer relationship management (CRM) systems and smartcards.
"Some ticketing technologies can hinder the performance of a venue rather than help it," adds Matthew Hare, managing director of TS.com, the company behind the software application Ticketingsolutions, who has several soccer and rugby clubs as well as the West Indies Cricket Board on his books. "Although problems tend to be based around how the systems are used. Rights owners should think about how to make the experience better and easier for their customers rather than relying on technology such as smartcards unless they add real value," he says. "The biggest single change to the ticketing industry is that customers want to be more in control and not stand queuing in long lines anymore. They also want a good level of service so it is up to us to make technology deliver what the customers wants.

Going right back to basics, James McGlynn, managing director of software company Carnegie Information Systems, says: "Stadia need to be constructed with technology in mind. Most are just built to service the people who show up on the day. Customer service facilities to handle overflow systems and automated turnstiles should be factored into new venues. If they are built with those in mind then the cost becomes quite straightforward because the cabling, back up and data systems are fairly cheap. At the moment stadia are built to service demand and not to build demand - it just doesn't make sense."

Online ticketing

"Ticketing is tailormade for the internet," says John Parker of ticketing and hospitality agency Byrom. "The argument that not everyone has access to the internet is getting weaker and weaker. Most ABC1 males have access to a computer these days and surely if someone wanted a ticket to an event strongly enough, they would find internet access somehow?"
Online ticketing offers numerous advantages - not least for the customers. Venue owners, for instance, get instantaneous feedback on crowd numbers, helping them to safely filter fans to different sections of the ground at different times. "It also gives them scope to sell large amounts of tickets in a short amount of time and saves call centres getting jammed or venues being inundated with people queuing. The internet allows a rights holder to take that volume and process it automatically," says Parker.
Online ticketing represents a potential timesaver for a venue's marketing staff, who no longer have to spend an hour or so meeting with ticket shoppers to show off available seats and discuss pricing.
"Another way the internet is useful," adds Parker, "is that it makes it easier to communicate with a customer. CRM is a nice buzz word and an element that is bringing ticketing into focus." From the capture of customer data, through to the execution of online marketing campaigns, CRM also offers support for third party sales channels and the development and implementation of effective promotions.
"The internet offers fantastic opportunities in two ways," says Hare from TS.com. "Firstly, inventory in realtime, comparable to someone walking up to a physical outlet and buying across a counter, and secondly, a system that is much more manageable for people running major events."
"The web has not made the biggest impact as it could have done," however counters McGlynn from Carnegie. "A lot of media deals were struck purely on the basis that sites look and feel the same over multiple properties," rather than leveraging potential revenue streams.

Smartcards

TeamCard was the first multifunction smartcard to be introduced in the UK market and is utilised at many soccer and rugby clubs and golf venues. Each TeamCard smartcard is uniquely protected by a password and encryption scheme that prevents misuse. All the terminals in the scheme can read the card details but each terminal will only be able to update certain data fields. The data structure on the card is designed by TeamCard to interact with the software on the transaction terminal, and these structures are managed and maintained internally within the system.
The smartcard, with its built in microchip, enables terminals and certain other electronic devices to read and write data from and to the card. Each smartcard is manufactured with a unique number encoded in the microchip that allows it, and consequently the holder to be identified. The smartcard used in the TeamCard scheme can have 25 separate data fields for each particular application, each verified using encrypted data, so as to protect against fraud. The fields can store most types of data, which, for TeamCard, include electronic ticketing, electronic cash, reward scheme and electronic lottery type functions.
"TeamCard is a multi-function smartcard," says Brian Hawkins, marketing director of TeamCard. "They can be used to access venues and buy food and merchandise. We believe it is possible to combine all these things on one card effectively and it isn't rocket science." Smartcard systems have the advantage of identifying the user, allowing screening by the police and rights holder for security reasons.
"Smartcards effectively just extend a club's database into an individual's pocket," says McGlynn from Carnegie Information Systems. "But they are not for everyone. Where a venue has a high subscription or attendance base, such as at a racecourse, a smartcard system makes a lot of sense. But where attendances are small or infrequent, is it really worth the return?"
Smartcards do have their uses however adds McGlynn and interesting possibilities. "Looking at something like an FA Cup semi-final [England and Wales' premier knock-out soccer competition that is open to all divisions], the venue has to be sold entirely from scratch. This could involve sending out 20,000 letters to season ticket holders, and 19,000 being sent back to process. Then 19,000 tickets would be sent back in the post which is not only prone to error or loss, but costs £1.50 [$2.38] per supporter in administration. Instead, clubs could just ask the question in a certain way. It's literally a case of "you pay us every time a game comes up from your smartcard and we won't do anything unless you tell us you don't want to go to that match'." The smartcards can therefore be used to access the semi-final, or disabled if the user has opted out of attending.
The reasons why rights holders adopt smartcards are varied says Hawkins. "Every club has a different priority. Millwall (English first division soccer club) for example wanted improved security and this has worked very well for them and reduced hooliganism. Bolton [Premiership club] meanwhile uses TeamCard to resell tickets and was the first [soccer] club in England to do so." There are also synergies between clubs using the same system which has commercial benefits. "A Chelsea fan visiting Bolton can make purchases there easily. This provides a new revenue stream and can carry a reward element." The US is ahead of the UK in terms of harnessing reward schemes "but backwards in terms of the technology," adds Hawkins.
So what is holding back the uptake of smartcards? "The infancy of the sector," explains Hawkins, "so we need to educate sports rights holders about the benefits of smartcards and the fact the technology is now much more affordable." Hawkins believes that rights holders must plan for the future when it comes to smartcards. "If they do not want to employ smartcards now then they must consider the inevitability that they will need to consider them in the future and choose a system that will allow changes to be made." As well as needing to educate rights holders, Hawkins feels the technology is battling against traditional ticketing outlets. "Whatever the situation is now however, the whole ticketing industry will change beyond all recognition in the future. The ultimate use of smartcards will be at a large event such as the Olympics where security could be addressed and ticket touts eliminated."
"Smartcards without a decent CRM system behind them are useless smartcards," McGlynn however cautions.

The CRM angle

Ticketing solutions increasingly involve an aspect of CRM functionality. The main feature of a CRM solution is the CRM database. All other systems, for example, ticketing, smartcard, retail and online ticketing, link to the CRM database and record all customer transactions in their own personal records. This gives rights holders a complete overview of all customer purchases, enquiries, complaints etc, allowing them to tailor their services to meet each customer's specific needs.
Hare from TS.com is not so bullish about CRM per se: "The whole CRM thing can be a bit of a red herring unless it is used properly. Why capture lots of data and then send the same messages to customers over and over again? Clubs are often better off investing in something more useful. What the technology does for you is the important thing."
Software company Carnegie Information Systems specialises in CRM solutions for the sport and leisure market, offering a number of products and services to sporting organisations that help them introduce a customer-focused strategy and ultimately increase their revenue. Based in the UK, with offices around the globe, Carnegie is part of Murray International Holdings which employs 3,500 people worldwide in the metals, property, sports, marketing and mining sectors and has an annual turnover of $222m.
Carnegie was the first company to implement a smartcard system at a soccer stadium in the UK at Rangers Football Club's Ibrox Stadium in Glasgow, Scotland. Carnegie also counts soccer clubs such as Leeds United FC and Feyenoord Rotterdam FC as its customers as well as several smaller soccer clubs including Sheffield United and Dunfermline Athletic.
"Ultimately, CRM is about adding value," says McGlynn. "Having a database in the first place is important, and then being to exploit it. Most sports clubs have seen an increase in the quality of their databases through implementing CRM and Rangers in particular has achieved organic growth in the region of 400% because of its own CRM system."
"Most sports supporters believe their clubs should offer a higher level of service. Implementing a CRM system can address this and reduce churn significantly," he adds.
McGlynn believes that it is not the fear of technology that holds many sports rights holders back, but rather "the lack of capacity to manage change because many clubs just don't have the time, with key people often carrying out three or more roles." Many clubs therefore call in consultants to implement systems according to McGlynn, which is a step in the right direction, "but as soon as the consultants leave, the project loses momentum. It is an organisational challenge."
"Technology is a great enabler," adds McGlynn, "but the services need to be tied down first. And systems have to fit the business, not the other way around."

The above article is an extract from the forthcoming Sportcal report Bidding and Hosting: A Guide to Successful Sporting Events, written by Rachael Church of ArkSports and Sport and Technology. For further information about the report, see http://www.sportcal.com/seminar/

This article was seen first by people who receive the monthly newsletter, join them.

Related features

More features from this issue

Send this page to a friend