The Press, February 2009
The Auckland Regional Council (ARC) almost deserves congratulations for so badly stuffing up the David Beckham exhibition game to the extent revealed last week. It is an extraordinary achievement in terms of incompetence, which could have been avoided with some basic marketing thinking.
Of course the greatest mystery is why the ARC, the Auckland equivalent of Environment Canterbury, was even involved in putting on this match. According to their website, the ARC’s focus is to manage Auckland’s “. . . air and water quality, its growth and development, regional parks, public transport, the coastal and marine environment, and natural and cultural heritage sites.” No mention of speculating on sporting events.
After losing $1.79 million of public money they are getting rightfully lambasted in the media. It is an enormous amount of money to lose on a single sporting event. The ERC reportedly spent $3 million putting the match on. I’m no accountant but a 60% loss is quite an achievement for any enterprise.
The ratepayers of greater Auckland basically subsidised each of the 16,600 people who attended by $107 each. It would have been cheaper to simply hand out $20 bills to 80,000 Aucklanders. The ARC needed a crowd of 19,000 to break even and were hoping to get close to the 30,000 maximum.
This despite the brand ARC had to work with. Beckham, even in the twilight of his outstanding international career, is a world famous sporting personality. He has been called by the US Magazine Men’s Health ‘the biggest sporting star on the planet.’
Well known even before joining the US-based LA Galaxy, Beckham ascended even higher when he become the face of American professional soccer. Beckham regularly tops search engines lists for ‘most searched for sports person’ and was named one of Time magazine's 100 most influential people in the world in 2008.
His star power was enough to attract 32,000 punters to an exhibition match between LA Galaxy and the Wellington Phoenix the year before. So how did the ARC not manage to get a reasonable crowd along?
Shifting uncomfortably in the hot seat, ARC Chief Executive Peter Winder blamed high ticket prices, a weak opposition and ineffective promotion of the event for the huge loss on the reported $3 million the organisation spent putting on the match.
Ineffective promotion isn’t a valid excuse. Although I am not a soccer fan, and had no interest in travelling to Auckland to watch Beckham, I was very well aware of the game and when it was on. I can’t imagine many Aucklanders with an interest in the game were not. A hermit in a Fiordland cave would have been considering brushing off his Galaxy jersey.
I don’t know what promotion the ARC did but I doubt it was a big factor either way. The other factors were two more fundamental failings in the ARC’s marketing.
Pricing was definitely an issue. Revenue from ticket sales has been reported as $782,000, a whopping 70 per cent less than the $2.5 million projected. Ticket prices ranged from $45 to $180 (you can catch a Blues Super 14 rugby union game for between $12 and $45). In the end the ARC was forced to sell many tickets at 2-for-1 deals in response to flagging demand.
Of course price is closely related to the other contributing factor, a weak opposition creating a poor experience for the crowd. The product the ARC was selling wasn’t of high quality.
A soccer blog on the Stuff website at the time assumed “. . . that the “All Stars” title was the Auckland Regional Council’s idea of irony, as they . . . were the complete antithesis of anything resembling stars.”
The Beckham game fiasco was a classic marketing mistake, suffering from the ‘product is so good it will sell itself syndrome.’ At the root cause of this syndrome is a failure to consider the product from the customer’s perspective.
Auckland sports fans weren’t just looking for David Beckham. They wanted to see Beckham involved in a good match and pay a reasonable amount to do so. Beckham’s star quality wasn’t enough to overcome the weakness of the other factors.
This is exactly what marketing is about. Looking at your company from the customer’s perspective and understanding everything that influences their decision to choose your product or service. The product itself is rarely enough – there is packaging, where you can buy it, the support provided, the cost and so on.
So how do you understand the ‘whole product’ from the customer’s standpoint? It is about mapping out everything a customer needs to do from the time they hear about your product through to becoming a loyal and devoted user of it. Gaining a clear picture of this is a powerful marketing tool.
From the inside it is easy to convince yourself that your product is good enough to succeed. That it is worth risking millions of dollars of other people’s money on David Beckham’s star power. Some basic marketing thinking would have helped avoid the embarrassment and the unnecessary dent in Auckland wallets.