The Luxury Suite is not Dead

Download a sharable version of this article here: The Luxury Suite is Not Dead

• Executive Summary
• Introduction
• The Modern Suite Market and the Need for Change
• Conclusion in Statistics
• Additional Resources

---------------------------------------------------------------------------------------------------------------

Executive Summary

The Future of Commerce : In 2018, 52% of B2B buyers say they expect half of their purchases to be made online.

If B2B buyers are purchasing more and more online, why are sports and entertainment executives failing to capitalize on this audience? In the world of events, ecommerce sales have historically been utilized as an extension of ticket sales, failing to capture the premium suite or luxury box buyer. Tech savvy consumers and digital marketing initiatives create a more efficient and effective way to reach premium seating’s core purchase audience, the business to business buyer.

Globally, B2B customers are migrating to ecommerce sales at a global revenue rate of 234.78% higher than B2C.

In the United States alone Forester predicts that by 2020, B2B ecommerce will reach over $1.1 trillion, or approaching nearly double the revenue from 2014

For business buyers, online booking options creates ease of use, provides quick answers and empowers them to provide complex details to decision makers instantly. This process is causing a disruption across multiple industries. The digital landscape is providing a friendlier process for both B2B and B2C buyers to access, research and purchase online. In the B2B world, this can be broken down into stages that are similar, but different from the B2C buying process:

The Stages Of B2B Buying

1. Pre-sell: Arguably the most important stage, this stage requires research and opinions from many relevant stakeholders.

2. Sale: Nurture the relationship and help the customer through the sales process. Onboard the new customer to the product.

3. Post Sale: Continue to nurture the relationship and work towards building a long term customer.

B2B buyers are looking for information online, providing that information where they seek it (online) lowers the time from consideration to purchase, and decreases sales overhead for the rights holder. According to e-commerce researcher Ben Thompson, consumers are looking for ways to avoid forced packaging and outdated pricing models. Thompson coined the term Aggregation Theory as a way to describe this shift in the marketplace across other industries. Prior to the internet, inventory holders distributed goods through manual channels. With the advent of digital goods, the hard cost to distribute products was gone.

In suite sales, we have the distinct advantage of a primarily digital product, outside of attending the event. All three stages of the process can be, and are expected to be, completed virtually by the customer. Suite Sales should have the best of both worlds. Both online access to information, and an offline personal connection to the brand and product. In this e-book, we will examine the easily solvable pitfalls of ignoring B2B ecommerce by utilizing modern principals that will help us capture more of the $1.1 trillion potential B2B ecommerce market. Creating an expanded omnichannel approach, allowing multi-organization packaging, utilizing distribution, and taking advantage of retail modeling data and marketing efforts, has the potential to reverse any downturn in sales and grow revenue while decreasing expenses.

---------------------------------------------------------------------------------------------------------------

Introduction

In the sports and event ticketing industry, the numbers point to a field that has largely ignored both online marketing and selling suites and premium products via ecommerce channels. While some may argue that suite sales are still a labor intensive process, B2B consumer habits are shifting towards using online information as a research tool early on in the buyer’s journey.

To illustrate, Komarketing uses the following to examine the phases of a B2B buyer’s journey. What you will notice is that there are two phases prior to any assessment that can be handled online:

While a more responsive and content heavy website is better for the consumer, it also results in a better business model for the ticketing rights holder. When digital avenues aid in 57% of a customer’s decision making, the ROI of each sale is higher, generating more revenue and decreasing staff expenses. This empowers staff to focus on closing and renewals instead of acting as a real life brochure.

Using online ecommerce solutions for luxury suite sales reduces friction and provides a tool that works 24 hours a day, 7 days a week. Building a better mousetrap is good, but it’s only one step in the process towards nurturing a customer to a sale.

A responsive website with improved content accomplishes little if you do not have enough customers visiting the site. If you limit your marketing reach to a single website, you are limiting your potential exposure to customers.

Looking at other industries, core B2B products are frequently available through an omni-channel marketing and distribution models. The airline industry embraced omni-channel online sales over a decade ago and have since killed off the travel agent industry by providing easy to understand information and on-demand pricing:

Using tools to reduce friction, list inventory online, cross sell, share marketing expenses and partnering with companies with a similar database of buyers gives a victory to both you and your customers.

-----------------------------------------------------------------------------------------------------

The Modern Suite Market and the Need for Change

The industry narrative in sports and entertainment is that the suite model may be broken. But is that true? Or do we need to simply grow with the times? Venues are building fewer suites and replacing them with smaller, inclusive amenity filled areas. While this is nice for moving units it accounts for less overall revenue. SuiteHop’s Senior Vice President of Business Development, Mike Guiffre has written about this topic in-depth.

“Suites provide greater revenue opportunities overall including ticket sales and ancillary revenue that is not shared within the league or as part of the salary cap,” said Guiffre. “It is the unknown and unpublished way that teams can generate operating capital or profit outside of what is typically reported.”

Teams are missing widespread revenue opportunities while enduring larger expenses. This could be a result of changing times but as Guiffre stated, “There is nothing in recent data suggesting businesses are cutting back on spending or entertaining.”

At SuiteHop, we’ve found that the model is not broken but the traditional way teams and venues market suites are. We’ve narrowed down the six reasons ignoring B2B ecommerce opportunities are hurting your sales efforts.

Reason 1: Limited Data, Databases and Reach

One of the main components of any retail outfit is the ability to market various products to consumers. A clothing manufacturer counts on retail stores marketing dollars, other customers coming into the store and purchasing multiple types of items from various vendors. This also is true of customer data. The data is more in-depth due to multiple product offerings which allows these retail channels to market to customers that the vendors typically would not have. Collecting data from one single sales channel creates an incomplete look at the big picture. With a single source of data, there is no ability to measure pricing comparisons, competitor values, timing and true economic evaluations. The incomplete data points leads to a misunderstanding of price points, revenue maximization, sales cycles and how to more efficiently push marketing initiatives.

Reason 2: Limited Marketing Budgets

Team or venue marketing budgets do not reflect the modern needs to advertise online for transactional sales including digital ad, retargeting and SEM. As the consumer data continues to improve, it becomes more expensive to target higher purchase intent individuals at the top of the purchase funnel. By focusing sales on a single offline channel you are not reaching customers or potential customers where the data says they are. The reason retail works is because by combining marketing reach in an omni-channel distribution model, wholesalers can pool budgets and reach a higher volume audience. By ignoring the multi-marketing channels you are not only ignoring distribution at its core, you are disregarding the marketing dollars that come with it. 

Reason 3: Limited Content for Multiple Decision Makers

B2B decision makers focus their initial buying journey phases online. Online research allows B2B purchasers to educate themselves about the project and plan their budgets accordingly. Currently teams and venues are not only limiting the channels available for suite purchases, they are limiting the content available to these B2B buyers. According to Forbes, ABM (Account Based Marketing) is becoming more important as B2B consumers search for a more personalized experience. Account based marketing focuses on understanding who your potential customer is, and serving content specific to their needs.

To drive success in ecommerce, Oracle recommends using personalization to tailor B2B customer experiences and simplify the ability to process bookings. This level of personalization is not currently available in the primary suite market.

A unified ecommerce platform could provide easier transactions, customer portals, price lists, relevant products and ability to research content to help with approval process. As of today, these kinds of platforms are limited or non-existent for suite inventory. This lowers the ability to use ecommerce for cross-selling, awareness and a more global ABM marketing approach.

B2B consumers not only want it this way, they expect it. According to B2B PR Sense Blog, 80% of business decision makers prefer to get company information in a series of articles versus an advertisement. Without utilizing an ecommerce platform most teams and venues are throttling themselves with less business related and more fan centric content for marketing. 

Reason 4: Flexible Customer Needs

Sports have seasons, concerts are based on tour schedules and businesses cannot control their sale or renewal cycles. This creates a need for flexible sales beyond your inventory. Other teams and venues are not necessarily competitors but can be used as accessories to a rights holders own scheduling limitations. When a customer needs to plan an event during your venues off-season, your ability to help that customer is therefore limited. The lack of flexible products that span multiple teams or venues creates forced packaging that loses sales and lowers the ability to maximize revenue. The combination of limiting access to a single venue and not utilizing ecommerce channels to build a robust customer database is a key element in why, as an industry, we struggle to sell suites.

Reason 5: Zero Distribution. Not Even Primary

The need for distribution has come a long way in the past two decades for the entire ticketing industry. We have seen recent changes to a full distribution model including SeatGeek signing on with the MLS, Cowboys and Saints amongst others.

While this is a positive step forward we have yet to even break into distribution territory for suite sales as there are almost zero ecommerce options for booking suites including from the primary rights holders. While some suites traditionally end up on the secondary market the effect is minimal as these sites are transaction and volume focused.

Hubspot defines omni-channel experience for brands as “a multichannel approach to marketing, selling and servicing customers in a way that creates a cohesive customer experience no matter how the customers reaches out”.

The obvious benefit to this approach is organically reaching more potential customers. The less obvious is how this data helps you move your product. Disrupter Daily points out several ways data is aiding in moving product beyond more eyeballs. Four of the most important include:

1. More Accessible Ways to Buy

2. More Intelligent Pricing

3. Personalized Experiences

4. Assessing Marketing Effectiveness

These 4 takeaways are clearly missing from sports and entertainments B2B approach. As of today, there are few accessible ways to purchase, no ability to collect pricing info, a lack of personalized experiences, and non-modern marketing techniques that are not capable of any usable tracking.

Reason 6: Fight Against Change

There are two drastic differences in the way as an industry, we’ve approached the evolution of sales of tickets vs. sales of suites. The first, while trying to control the ticketing market for a team or concert act, if it does not sell out the adage becomes “It’s not about selling out, its about maximizing revenue”.

However, with suites there is a tendency to ignore maximizing revenue by building less or including more hard expenses with all-inclusive or VIP seating solutions. Renovating suites and turning them into exclusive club areas is the exact opposite of ticketing. Venus are actually ignoring sales processes and inventory decisions that make ownership groups more money, in lieu of getting more bodies into the venue, more often. Second, staffing and resources have not caught up with modern times.

The statistics show that B2B clients consume information as well as react different from transactional customers, yet the industry has not only grown, but doubled down on outdated sales modeling. As the world turns online, sports and venues continue to force business offline. The current state of premium seating reflects that.

---------------------------------------------------------------------------------------------------------------

Conclusion in Statistics

If nothing else, we hope the most powerful takeaway you have from this article are the following statistics. The recurring theme we’ve seen is providing a one offline-channel sales approach creates limitations due to a lack of product information, marketing budget, personalized content, and purchase ability.

In 2018, the data stands alone as overwhelming evidence why ignoring ecommerce in B2B ticketing efforts has and will continue to cost organization’s longterm revenue. Adopting an omni-channel, ecommerce approach like SuiteHop to sell suites will not just create shortterm revenue gains. It will drive sales for a decade and beyond. 

1. Omni-Channel Approach from McKinsey and Company: On average a B2B customer will use 6 different channels to interact throughout the decision process and 65% will become frustrated with an inconsistent experience.

2. Omni-Channel Approach from The Future of Commerce: B2B customers now expect the same range of omnichannel buying options they enjoy as consumers – which is why 49% of B2B buyers prefer to use consumer websites to make work-related purchases.

3. Content Needs from Demand Gen Report: 96% of B2B buyers want content with more input from industry thought leaders.

4. Content Needs from Demand Gen Report: Prescriptive content that lays out a formula for success was the most popular type of content among B2B buyers in 2017, with 97% citing it.

5. Ecommerce Platform Needs from Forrester: 73% of millenials are involved in B2B purchasing decisions and 74% say buying through a website is more convenient. 

6. Need for Change from SiriusDecisions: 82% of B2B Decision Makers think sales reps are unprepared.

7. Need for Change from Think with Google: 81% of non c-suite employees influence B2B decision making.

---------------------------------------------------------------------------------------------------------------

Additional Resources

Todd Lindenbaum, CEO and Founder of SuiteHop discusses The Golden Age of Music and the Need for Premium Experiences

Mike Guiffre, SVP of Business Development at SuiteHop looks at the New World of Premium Seating as well as 3 Reasons Why Businesses are Gravitating to the Secondary Market

Cygnus Media on 4 ways Big Data is Reshaping Retail and Ecommerce

Bigcommerce on Omni-Channel Needs for Retail

Protocol 180 finds 33 B2B Marketing Statistics Proving Why your Strategy is not Working

Think with Google looks at The Changing Face of B2B Marketing with 5 myths

Harvard Business Review and the B2B Elements of Value

The Center for Sales Strategy Provides 14 Compelling B2B Marketing Statistics

The B2B PR Sense Blog and the Top PR Strategies to Avoid

The Marketing Blender Provides Modern B2B Sales and Marketing Statistics

---------------------------------------------------------------------------------------------------------------