Everybody - everybody loves sports, and so
today we're speaking about customer experience,
fan experience, and the business of sports.
Welcome to Episode #305 of CXOTalk.
I'm thrilled to welcome Jonathan Becher, who
is the president of the San Jose Sharks organization.
Before we begin, subscribe on YouTube.
Please do that.
I've known Jonathan Becher for years, and
so it really is a pleasure to welcome him
back to CXOTalk.
Hey, Jonathan.
How are you?
Welcome back to CXOTalk.
Hey, Michael.
Thanks for having me on.
Episode 305, congratulations!
That's a great and long run.
You know it's a long run, and it's the guests
on CXOTalk who make it.
Jonathan, tell us about the Sharks.
First of all, I'll start with an interesting
point, which is, I'm president of Sharks Sports
and Entertainment.
It's a funny phrase, but the point is, Sharks
Sports and Entertainment is the parent of
the National Hockey League's San Jose Sharks,
which is what you'd normally think about when
you think of the word "Sharks."
Plus, the American Hockey League San Jose
Barracuda, plus four ice facilities, an event
management business that hosts--I don't know--something
like 175 events per year including concerts
and family shows and, finally, a nonprofit
foundation.
When we talk about Sharks, sometimes we're
talking about the overall organization and
sometimes about the hockey team.
These are really multiple businesses that
you're running.
That's exactly right.
You can't really call them independent businesses
because, in our big building, actually, which
is named the SAP Center, which has a little
bit of my history--maybe we'll get into that
a little bit as well--are the San Jose Sharks,
the San Jose Barracuda, and the concerts are
in that building at the same time.
But, they're individual P&Ls, profit and loss
statements, and they don't always have the
same customers because somebody who comes
to a Sharks game may not be the same person
that goes to a rock concert or a Hispanic
show or Latino music, et cetera.
We have to treat them as individual even though
they're interconnected.
As the president of this organization with
multiple components, what do you do?
What is your role?
Yeah.
It's slightly complicated, but I'll make it
pretty simple, which is, if I look across
this end-to-end, there's really three leaders.
We can call it a triumvirate if you want.
I actually have a co-president, which is a
long tradition in technology.
You may remember we had co-CEOs at SAP for
a while as well.
We're responsible for the business operations
of the franchise, and there's a general manager
for hockey.
For hockey, you think coaches and players.
On the specific things, I tend to focus more
on fan engagement, on sales, on marketing,
on PR, on analytics, and other infrastructural
stuff.
My co-CEO tends to be--I don't know--the phrase
might be back office, but on event management,
on the building operations, et cetera.
None of the three of us divide this up into
pieces.
Think of this as kind of major and minor in
college.
I might major in the customer-focused stuff.
He minors in it, and he might major in the
building operations, and I minor in it.
Or, if you want to be slightly more sexy about
it, we can call it yin and yang as opposed
to major and minor.
Jonathan, we're going to dive more into this
but, before we do, as I said, I've known you
for many years, and you were a technology
executive.
You founded a number of different companies.
You were a top executive at SAP, and so why
did you decide, first off, to jump over to
the sports world from technology?
I guess it's easy to put the label on me as
a technology executive.
After all, as you said, I was a CEO and a
senior executive at technology companies,
but I never really thought myself as a technology
executive.
What I thought of myself as an executive who
is customer focused.
A lot of what I did, particularly over the
last decade, was to work on technologies and
processes that engage customers, I mean these
days what would be called customer experience
or customer engagement, although, frankly,
it wasn't called that for an entire decade.
That function is not fundamentally different
often among industries.
Having said that, look, I did work at a technology
company and now I work at a sports and entertainment
company.
I think if you go back and find the roots,
the roots of that change actually happened
when I was the chief marketing officer of
SAP probably around about seven years ago.
There were two sorts of issues, you could
almost call them problems, that I was thinking
about.
One is, because I have an analytics background,
we're trying to think about how to expand
analytics from beyond large companies to small
and medium-sized businesses.
The challenge is, small and medium-sized businesses
are often family owned and managers there
use their gut much more than they use data.
And so, we were trying to find ways to break
through that bias that gut is more accurate
and better than data.
Then the second challenge I was working on
is, SAP wanted to expand its brand from purely
B2B, business-to-business, to B2B2C, meaning
have an impact on consumers.
One day, it just sort of hit me that those
two problems were the same problem and that
if we could find a way to show viscerally
that data emotionally was better than your
gut, we could solve both problems.
Sports was a natural way to do that.
We ran a series of video and digital ads that
talked about, for example, a pitcher coming
in, in late innings in baseball, pitching
on maybe one day's rest, the cold weather
to a lefty, et cetera, and your gut would
tell you he's going to strike him out but,
in reality, there was a home run, and compare
what the data would predict by your gut to
what actually happened.
Amusingly and, frankly, unexpectedly, the
best things happened unexpectedly.
That led to us starting a sports line of business
when I was at SAP, which I helped launch.
We ended up doing these technology deals with
the NBA, with the NFL, et cetera.
I won't say culminating, but one of the big
steps there is, I negotiated the naming rights
for the building that I'm now in, changing
it from what was once called the HP Pavilion
to now the SAP Center.
That got me really deeply involved in the
business of sports.
When I left SAP a little more than a year
ago, a year and a half ago, took some time
off.
The next natural step was to become an executive
focused on customer success in the sports
world as well.
The common thread is what we now call customer
experience.
That's the point.
I would agree.
Exactly right.
Thinking, if you will, outside in from the
customer's point of view and how does that
change how you run your business.
Actually, I don't like the phrase, "Put the
customer in the center," because that sort
of suggests that you're surrounding them almost
in an antagonistic way.
It's, how do you flip your mindset from internal
business process functionality operation-oriented
to externally first what they need.
If we go back to business books written 20,
30 years ago, it's the modern version of walking
a mile in their shoes.
I want to remind everybody that, as always,
there's a tweet chat taking place right now.
You can ask our guest, Jonathan Becher, questions
using the hashtag #CXOTalk.
Jonathan, when we talk about customer experience
in sports, like for the Sharks, what does
that mean?
What are you referring to?
Yeah.
In some ways it's very similar to the customer
experience in a technology company or the
customer experience in a retail or any other
industry and, in some ways, it's fundamentally
different.
One of the ways to see that it's nearly identical
is just to think about your digital footprint
or how you engage socially.
For those of you that know me or have interacted
with me before, you know that I'm a social
person both, frankly, in real life and in
the digital world.
But, everybody, almost every industry, has
learned that social is less about the media.
It's less about a shouting platform.
It's less about a way of amplifying your normal
marketing or PR and getting out of less cost
and more about a listening platform and a
way to interact with people and removing layers
from the consumer of your product and the
producer of your product.
In sports, like in any other line of business,
we spend a lot of time listening to what fans--and
there's a distinction between fans and customers--what
fans want and what customers want.
Some of that is simple customer service.
Their digital ticket doesn't work.
Can we interact with them?
They want a particular jersey, but they can't
find it online or in the store.
Or, they don't like something that's happening
on the ice, that we can do from a service.
We use it sometimes to design new products
as well but, most of anything, it's authentically
engage and brand personas of who you are shine
through, not just corporate brand personas.
You will see me interacting as a human being,
as a person.
I actually even describe myself in the digital
world as a fan first and the president second.
That part hasn't really changed much.
Digital and social techniques are roughly
the same, similar technology.
What is fundamentally different, however,
is what the experience mean.
I'll give you a hint.
If you want more detail, I'm happy to go into
it.
That is, in the good old days--and I'm never
really sure when the good old days were, so
let's say ten years ago-the formula of success
for a sporting game was pretty simple.
If the hometown team won, and maybe if the
beer was cold, then the fans left happy.
These days, it's a lot more complicated and
things like lines for food, the quality of
the food, traffic patterns, et cetera have
almost as much to do as the product itself,
meaning the sporting experience.
This notion of authentic engagement, that's
the foundation.
It's really the foundation of a lot of modern
marketing.
How do you think about conveying that sense
of authenticity and remaining true to the
brand promise that you have as well?
First of all, you have to know what our brand
promise is in order for some of this to make
sense.
We think of ourselves and our players, actually,
more than ourselves, as hometown heroes.
Our players live in the community.
They're part of the community.
They give back to the community.
Our building itself is, in some sense, one
of the main anchors of downtown San Jose.
We program our building based on who lives
near here.
We are--I would bet and I've seen some data
that suggests--the most ethnically diverse
fan base when it comes to both hockey and
concerts in general across all of northern
America.
We use that to say, what kind of show should
we have and who do we market to?
Given that we are the anchor, you know, hometown
heroes, that spirit is a big part of our brand
identity.
We look for sometimes what are very simple
acts.
Our players live next door to regular fans.
You can find them in coffee shops, in subway
kind of sandwich kind of things just talking
to people.
That's the beauty of actually being here in
Silicon Valley is you can rub shoulders with
anybody else and just be yourself.
That ethos of being part of the community
sticks with us.
Just to give you a couple simple consequences,
that means our inexpensive seats are probably
some of the best prices in sports.
We actually have seats in the building with
great sightlines, not up in the rafters, that
go for $30 for a game, which is pretty affordable.
If you go to our Barracuda experience, you
can often get in for $5, and we have $2 beers
and $1 hotdogs.
A lot of what we try to do is be part of the
community, and that's part of that not just
social and digital footprint, but in real
life footprint as well.
Is brand promise the foundation or the beginning
point of creating authentic customer experience?
Yes and no.
The reason I worry about saying yes is, promise
suggests something that you may or may not
be able to lead up to, and so I tend to use
brand identity; who you actually are.
It's not a promise of who you want to become,
but it's who we actually are.
Therefore, if it's who we are, it has to impact
who we hire, how we train, how we act.
If you were to change your phrase to say brand
identity is the core to all this, I'd say
100% agree.
I think that, at least in the software industry,
there are a fair number of companies that
don't really know who they are.
They have a brand aspiration, "We want to
be great," or whatever it is.
Yeah.
They don't really have a clear brand identity.
I think that's probably reasonably true as
well, and I'm not sure.
I mean in some sense the brand is a collection
of who you actually are, and it could be aspirational.
We have an aspirational vision as well.
Again, I'll talk less about software companies
now given my new role than maybe my past ones,
but I will draw a parallel here, which is,
one of the things we did when I showed up
here, and I started in January of this year
even if it was announced late last year, is
we created a new vision statement, a new mission,
and a new set of values.
Our vision statement is what I would call
a BHAG: a big, hairy, audacious goal.
Our vision statement says we want to pioneer
the future of sports and entertainment.
We're not there yet.
You can never already be the future of sports
and entertainment because, no matter when
you get there, the future is always further.
But, pioneering becomes part of our spirit
and part of our brand identity.
What does that mean?
That means we're constantly going to experiment
on things, and that means some of those experiments
are going to work out and some of those experiments
are not going to work out, but that's part
of our brand identity.
Again, I give you a very tactical example.
We were one of the first in sports, and I
think maybe the first in hockey, to go to
essentially 100% digital tickets.
That means you don't get the paper-based tickets
anymore, although we do have an option for
people to get paper made tickets if they don't
have a smartphone.
But, in Silicon Valley, that's a small subset
of people.
Now, because we were first to go to digital
tickets, lots of things hadn't been worked
out yet.
We still had some challenges with our own
application, with the third party infrastructure
that we used as well.
Frankly, there were some disgruntled fans
that said, "You don't have this right on opening
day."
That was last year.
But, that pioneering spirit said, "That's
okay to make mistakes.
We're sorry that we did that to our fans,
but let's learn from those and not make the
same mistake twice."
We continue to push on technology.
We continue to push on programs because the
identity of who we are is, we want to be pioneers.
That goes back 27 years to founding the franchise.
If you go back 27 years ago or, frankly, 30
years ago and said, "There's going to be an
NHL team, an ice team in northern California,"
that might even seem laughable.
This is a land without ice.
People don't grow up on a frozen pond playing
hockey.
No one would have thought that the NHL would
do so well in California and now there are
three teams here: one in northern California
and two in southern California.
That is the kind of pioneering spirit we want
to keep and, frankly, that's part of the brand
identity.
Jonathan, you talk about being a pioneer in
sports and entertainment.
Why that linkage, sports and entertainment?
Why not just say, "We want to be the best
sports team in the world"?
Yeah, fair enough.
Well, first of all, the best in the world
is always a tough thing to do because, you
know, we don't play basketball, so we can't
be a be a better basketball team because we're
in hockey.
Ignoring that for a moment, sports and entertainment
are two sides of the same coin.
You may have heard me say at the beginning,
the official name of our organization is Sharks
Sports and Entertainment.
Why?
Well, there are a whole bunch of reasons.
The simplest reason is because we're not just
about hockey.
I mentioned we have 175 events in our buildings.
We have concerts: rock concerts, classical
concerts, specialty shows, et cetera.
We have family shows: Disney on Ice.
We had a tractor, a monster truck kind of
thing as well.
We have convention style events.
Michelle Obama is coming to give a talk in
our building as well.
Those things are entertainment.
They have nothing to do with sports as well.
If you were just simply to look at the number
of events, I think last year we did about
175.
It's roughly half of them are sports and roughly
half of them are not sports, so it's "and
entertainment."
Ignoring that, let's just concentrate even
on the hockey half, that I think in the original
days of sports, if we go back 20 or 30 years,
was still probably sports and entertainment
because it was about exciting the passion
in people.
It was about entertaining them.
It was maybe capital S sports and little e
entertainment.
But, an interesting thing has happened with
a new generation of fans coming in, with digital
changing the way you consume sports as well,
it's about being entertained.
If you come to any sporting franchise, any
game, I assume you've seen this in your life
as well, Michael, there are more and more
things around the game itself to entertain
fans.
There's more music.
There are more distraction and contests, whether
those are between periods or in the concourses,
et cetera.
There is more food.
Actually, one of the biggest changes in sporting
events has become a destination for foodies
as well.
If I just look at our building, it's gone
from the old hotdog and hamburger to hundreds
of different specialty items and some amazing
food, which maybe we should talk about because
it'll make us both hungry and want to actually
leave this broadcast and actually go eat something.
The point being is, these days, to put on
a successful sporting event, you have to think
about the end-to-end experience.
The end-to-end experience is about entertaining
a customer, not putting on a game.
As I've spoken with other sports executives,
one of the clear themes that emerge is competition.
And so, who are your customers and who is
your competition?
It's directly related to this point you were
just making.
Michael, we could probably talk about both
of those questions for hours.
Let me start with a simplistic way of thinking
about it and then we can go from there.
First of all, we don't have a simple to identify
customer.
Obviously, a hockey customer is different
than a concert customer, which is different
than a practice facility customer, which is
different, et cetera.
We have four major lines of businesses.
We have four very different kinds of customers.
Even inside each of those, the person that
goes to a rock concert is different than goes
to a classic music [concert].
Even within hockey, there's not a single customer.
We have extraordinary loyal fans.
We have season ticket holders that have been
with us since this building opened 25 years
ago, even before then when the franchise started
27 years ago, and we have people that have
only been with us intermittently during that
time period.
What I would say is the classic customer segmentation
approach is where you have, let's say, eight
big segments, doesn't really work that well.
We're not yet at the point of what marketers
would like to call the segment of one, but
we're moving in that direction.
Instead of us trying to force fit customers
into predefined segments based on who we think
we are, we flip it around and say, "Who are
they and how can we best serve them based
on dozens of business processes and dozens
of templates?"
It's not putting them into our buckets.
It's trying to put us into their buckets.
That switch is a psychological change for
marketers, salespeople, and operational, which
we're probably halfway through.
You asked the second question, which I'll
try to answer quickly as well, which is, who
is our competition?
That's also difficult to answer, but if we
just focus again on hockey, on the Sharks,
it's tempting to say that the person on their
living room couch watching TV is our primary
competition with 4K TV, with digital distribution.
The view of the game is almost as good as
it is at the venue.
To be fair, that's happened less in hockey
than it has in other sports.
Hockey, at least in my opinion, and I know
I'm somewhat biased, hockey is a sport that's
best appreciated live.
The nuances have not yet been captured as
well, in my personal opinion, on TV, as maybe
some other sports, which you have just as
good, if not in some cases better experience,
than watching it live.
What we find is fans don't get hooked as much
if they only ever watch on TV.
They get hooked with the in-game experience,
which lends to be interesting, which is, I
actually don't want the entire building, roughly
78,000, sold out with season tickets because,
if I do that, I have a limited opportunity
to have new fans experience the game.
I actually want--let's oversimplify--roughly
half or a bit more to be season ticket holders
and the rest to be more casual fans that get
to experience it, so I can touch a lot more
people.
It's also that I'm not really competing with
other sports teams, although I know that's
common for my colleagues to say, because I
find that people are avid fans of one or two
sports at most, not of five or ten.
To me, what I'm mostly competing with is time
and attention, the other entertainment dollars,
the games of Fortnight so people will just
sit on their couch.
To me, it's the attention span of what I'm
competing with, which is why it can't just
be the hockey game.
It has to be all the entertainment and is
why it can't just be for the three hours on
game night.
It has to be 24/7.
I could imagine that if we fast-forward ten
years, we're not sports and entertainment
franchises; we're content factories.
This notion of the need to engage the fans
and develop their mindshare.
Yes.
It sounds like a lot of what you're doing
is oriented around that ongoing mindshare
that goes far beyond any specific event.
Absolutely right.
You know how retailers used to argue and talk
about share of wallet?
We're trying to play with the idea of what's
share of mind.
Although, it sounds a bit creepy, so maybe
that's the wrong phrase to use.
Anybody out there on social media who have
got a better idea, feel free to tweet it out
or use whatever method you want.
The, "How often do you think about us?
How often do you talk to your friends, even
your competitors, et cetera, about what we're
doing?" if we're engaged in the conversation,
that's great.
How do you do this?
I think the first way is to not start with
the transaction.
I said earlier in this, and maybe you even
said it as well, that my primary job might
be customer experience and this market is
called CX, customer experience.
I'm not sure that's the right way to describe
it because "customer" implies transactional
relationship, and then immediately ask you
to think about lifetime value and all that
and start creating commercial parameters around
that.
Maybe the answer is fan engagement or fan
experience.
Again, it's not semantics.
What I'm trying to get at is a vast majority
of these situations, we as Sharks Sports and
Entertainment, may never have a commercial
relationship from those who are the most passionate
about us.
A large fraction of our fans, depending on
whose numbers you believe, it could be a quarter
or even more don't live in Silicon Valley
and so aren't probably going to come to my
building very often.
Maybe they don't come whatsoever.
They are still passionate about our product
offering.
How do they show their passion?
They engage in social media.
Perhaps they buy merchandise.
If they buy merchandise, they're probably
not buying it from me because they're physically
not coming into the store, so they could buy
it online or maybe in their local retailer.
That's not money that I'm involved in.
Yet, their experience there is important to
me as well.
Part of what we try to do is create stories
around the brand that show who we actually
are and who the players are and, better yet,
allow others to amplify and tell their own
stories as well.
Two things there: One is, in some sense, and
I hope none of them are listening, our players
are in some sense our product.
What's great about hockey players is they're
easily relatable.
They aren't a lot bigger than the average
human being sometimes like some sports are.
They aren't a lot taller than the average
human being.
When you meet them, they are like you an I,
except for they are superhuman when it comes
to their powers to play hockey.
Helping them tell their own stories becomes
much more relatable.
We have a fantastically outgoing hockey player
named Brent Burns.
One of the best defensemen.
Won the Norris Trophy a couple of years ago.
He has this massive ranch down in Texas, and
so he invited us down onto his ranch in the
office season.
We filmed essentially what is kind of an off
day sort of segment about his life on the
ranch where you see beyond how he is and he
plays on the ice, but his interaction with
his animals, with his family, et cetera, that
showing the authenticity of what's going on
sort of gets the stories going.
We also have fans who tell their stories.
There is, frankly, more people analyzing how
our Sharks players are doing that are non-official
media than there are official media.
Helping their stories get amplified and tell
it, whether they are bloggers or otherwise,
helps create what we call everywhere is Sharks
territory, and not just here in Silicon Valley.
Fundamentally, that's the kind of core pillar
is creating that ongoing sense of community
that's independent of location.
That's exactly right.
I said earlier that part of our brand ethos,
our brand identity, is hometown heroes.
It's tempting to say, well, the hometown is
only San Jose.
Yes, it's centered there.
But, if we can create that passion, that sense
of being there everywhere in the world, then
we've done really well.
Frankly, some of our most passionate fans
are in the hometowns where some of our players
come from, which could be Eastern Europe,
Canada, pretty much anywhere in the world.
Right now, we have five players on the team
that are from Sweden, and I'm seeing an awful
lot of Swedish tweets in my timeline, which
is kind of cool.
But still, the foundation must be the team
and the success of the team in games.
For sure.
Of course.
Nothing replaces the fact that people love
hockey and they come to watch hockey.
The better you are, the easier it is to engage
people.
We've been blessed, and we've made the playoffs
13 of the last 14 years, 18 in the last 20
years.
We've been the model of success in hockey
and, in some sense, in sports overall as well.
In the last 15 years, more or less, no team
in hockey has actually won more regular season
games than we have.
There are plenty of times where the home team
wins.
But, if all you do is rely on a winning game
means people are happy and a losing game means
they're unhappy, then you're too episodic
because you're always going to lose some.
You don't win every single game, so you have
to go beyond just your identity is whether
the final score shows that you were more successful
than the other team.
That can't be the only story.
How much of your effort is devoted to this
notion of developing this broader sense of
participation and people feeling that they're
part of your community?
I think virtually everything we do is anchored
around that.
I'm not sure I could give you a percentage.
For sure it's more than half.
It's one of the reasons that we invest significantly
in the foundation as well as a nonprofit to
give back into literally our physical community
because the community is both digital and
online.
It's in other places that we don't touch every
day, but it's, as I said, physically anchored
here.
Whether it's helping build a playground for
a school that might not have one, whether
it's using our players to help teach math
or education in ways that haven't done before,
whether it's simply just granting money to
organizations that need it more than we do,
all those help build community in ways that
you wouldn't expect as well.
To what extent does this permeate the various
departments inside your organization, this
attitude?
Yeah, it's hard to describe unless you were
in our building and see it, but being authentic
and in the community, and being a shark is
our identity.
Permeate, again, somehow suggests that it's
a foreign body that came in, which goes back
to that comment of, it's our identity; it's
who we are.
We actually describe ourselves internally
as Team Teal.
Teal is our color.
I think we were the first team in professional
sports to use teal at the time that we actually
launched our iconic jersey and logo back in
1993 or Stavro in '91.
I still think, actually, voted the best jersey
of all time in the National Hockey League,
so because that's our identity, we talk about
it all the time.
We actually have a series of pioneering principles.
Remember, I said pioneering is a big part
that we talk about that include these things
in our ethos.
We actually have monthly all-hands meetings,
which we call Team Teal Meetings, in which
people that go above and beyond to show these
values get awards every month.
The awards do not come from management.
They come from their peers.
They're nominated.
They're voted on by their peers as well.
Again, permeation sounds somehow foreign.
It's who we are.
It's our identity.
Would it be fair to call this the digital
transformation of sports or is that just the
wrong context and phrasing?
I tweeted out right before the show that I
promise not to use any buzzwords.
If I say, "Digital transformation," it's going
to sound a little bit like a buzzword.
You can call it that, but I'm not going to
call it that.
All right.
What will you call it?
For sure, sports and entertainment is going
through a disruption.
Part of that disruption is digital, and so,
yes, sports and entertainment is fundamentally
transforming, but it's not just digital.
There is a cultural transformation, et cetera.
It's going from putting on games to, as I
said, engaging with fans on an hourly, minute
basis.
To say digital, yes, that's part of it.
I'll give you a simple example.
Last year, you know bobbleheads, right?
I'm shaking my head like a bobble.
We do some of the best bobbleheads in sports.
I think last season we did 12 or 14 of them.
We win some awards from those.
Last year, we ran an experiment, which was
cool.
We actually created the first augmented reality
bobblehead.
On the bobblehead itself, there was a QR code.
It turns out Logan Couture, one of the best
forwards in hockey on our team, and that QR
code, you could actually use our digital app
to get some background information.
Essentially, a day in the life of Logan, which
would explain some of the features of the
bobblehead and go sort of beyond.
Therefore, you could self-identify a little
bit more with professional athlete.
That augmented reality is now something that
we want to use on lots of different situations.
I mentioned digital ticketing.
We actually are seeing, in Silicon Valley,
a phenomenon, and I think some other teams
are seeing it as well, of late-arriving fan.
What that means is it's getting harder and
harder to get to the venue because of, frankly,
traffic.
Where it used to be that 70% or even 80% of
fans would be here by puck drop, the opening
ML, on some nights it's as little as 60%.
They show up, but they show up during the
first period.
Well, we want to give them incentives to come
in earlier, maybe eat in the building rather
than go home to eat or go to restaurants downtown.
Again, we put beacons into the building.
We tried out, using our digital app, an incentive
that we push to them.
If you're in the building, let's say, 30 minutes
early before puck drop, you might get $10
off or 10% off food in a particular stand
or maybe merchandise anywhere in the building.
All these things are digital and, therefore,
might make you want to say, "Yes, the digital
transformation of sports is happening," but
it's not just digital.
It is the cultural transformation to program
around fan needs as opposed to program around
the operational needs.
I mean I guess, if you really, really wanted
to say it was going to be digital, then I
should be talking about robot servers and
maybe even robot athletes one day, but that
seems to be a little bit too farfetched.
Well, it seems the key point here is you're
using every means at your disposal to support
that mission which, in your case, is the building
of engagement participation and community.
Some of those are technology, and some of
those are how you run the business.
Well said.
In many cases, it's simple business processes
rather than technology.
What advice do you have for companies that
want to replicate this kind of sense of community?
Community is kind of like culture.
You can't just declare it to be so and hope
it happens.
Community is about authentically changing
what you do and living it every single day.
Most communities are anchored by people not
employed by the brand that want to create
the community.
For sure, as a brand, as an organization,
I can set up the community.
For sure, I can provide incentives to the
community.
But, the community has to self-police.
The community has to have its own evangelists.
The community has to be almost self-regulated.
It has to be something that you feel like
you don't control but you participate in.
One of the things I see and, again, by community
I don't necessarily just mean a message board
on steroids.
I mean literally a community.
Stuff is going to happen, and the community
members are going to say things that make
you uncomfortable.
How you react in those moments of uncomfortness
tells you a lot about whether you're community-minded
as well.
I remember a conversation I had with an executive
in a former life where I said, "Well, we should
scrape conversations off the social Web, not
just in our managed community but that happened,
and surface them on our website, our dot-com.
This other senior executive said to me, "Well,
what happens if they say something extraordinarily
negative about us?
Isn't that going to be bad?"
My answer, which I think is a different way
of thinking about it, is, "What happens if
people are saying something negative about
us and we don't know?"
Knowing is much more powerful because you
can interact, figure out what the root cause
is, et cetera.
If you want to engage authentically and build
real community, you've got to have a little
bit of tough skin.
You've got to be willing to be open-minded,
be willing to say, "I want to be the best
I can be and, to be the best I can be, I've
got to get negative feedback and positive
feedback."
It's not just about praise.
We have a question from Twitter, an interesting
question from Steve Massi going back to some
things we were talking about earlier.
How do you recognize the revenue that comes
from non-revenue driving fans even though
you believe non-revenue driving fans are valuable
to your brand?
Basically, how do you deal with these fans
who are not driving revenue?
It costs you money to support them.
There are two complementary answers to that.
The first answer is to resist the temptation
to immediately say, "How do we turn a fan
into revenue?"
If you resist that temptation, then lots of
other good things happen.
We've actually done some informal studies.
I will say the science behind this is not
as strong, which suggests the more fans that
you have, the higher the revenue you'll get
because second-order effects will happen,
even if they buy from somebody else, even
if they show their pride, you're more likely
to sell out a game.
The tickets on the secondary market increase
in price as opposed to a decrease in price.
You get more word of mouth, et cetera.
The second order effects happen, but you have
to believe in the value of fandom.
Yes, it's an investment, but investments are
typically long-term things and not every investment
in long-term can be done ROI.
As an overly simplistic answer with a fan
who lives locally, if you invest in fans,
then maybe someone will take up the sport
of ice-skating or curling or something else.
If they do that, they may want to try out,
and they may show up at one of our practices.
They may never buy a ticket to a game, but
we might actually still one day make money
off of them or maybe they'll tell somebody
else who then will go to a game because they'll
want to try out as well.
You have to believe in the power of word of
mouth, which we believe, fundamentally.
As I hear you talking, it comes across to
me or it comes to mind that you're really
talking about invest in the community and
the revenue will follow, either directly or
through those second-order effects that you
were just describing.
Well said.
I might borrow that from you, Michael.
Hey, my phrases are yours to own.
By the way, you have that on video, so I'm
going to borrow all your phrases.
[Laughter]
[Laughter] Okay.
We have another question from Twitter.
What about millennials?
Are they doing things differently?
How do you think about millennials?
No.
I don't know why millennial-bashing is a sport.
For sure, every generation, at least that
I've lived through, likes being somehow different
than the previous generation.
Maybe that question is, what has changed in
recent years?
I will say a couple things have changed, but
it's not just limited to millennials.
I think it's changed almost across the board.
First of all, by and large, sports is seeing
less and less fans signing up for what would
be full season tickets.
We're not just seeing it in the Sharks.
They're not just seeing it in hockey.
It's happening across sports, particularly
sports with long seasons.
We have 40-some home games, 82 games across
the entire season.
Basketball has about the same.
Baseball has even more.
Football, American football has a few best
games, of course.
Because of shorter attention spans, of course
as well get busier, distraction, the competition
for other entertainment, as I mentioned earlier,
it's harder and harder for a fan to go to
40 games.
Actually, I don't mind this trend because
it means that roughly half our building is
going to be season ticket holders.
But, that's turned into a rise of what I call
partial plans.
Half season plans, for example, have become
very popular in recent years.
I think it's the single highest growth part
of our business right now in terms of percentage.
We have something we call a Shark Hack, which
is a partial, 11-game plan as well, which
is essentially a quarter season, if you do
the math.
The movement from always doing season ticket
holders and then go all the way down to individual
games, is sort of settling in the middle,
which is partial plans.
That's a phenomenon that's happening as well.
Another phenomenon in is arrival of foodie-ism,
I guess, if that's a word.
I'll admit that on the fly.
If you go back a decade, most of the food
that you could buy in a ballpark or an arena
or outdoor stadium was limited to simple staples.
Obviously, the beer or the hotdog and the
hamburger.
Now, if you go to many stadiums, particularly
ours, there are all kinds of different foods
there.
We spent the summer revamping our menu again.
The fan reaction has been phenomenal in the
preseason games and some of the concerts we
put on.
We invited a lot of local specialty foods,
for example, Nick the Greek, Konjoe Burger,
Scott's Seafood.
I don't want to give too much shout outs to
all of them.
We invested heavily in our own food as well.
One of the things that's selling phenomenally
is we have our own brand of cookie dough called
Jane Dough, which is a nice little pun on
that as well.
There are a lot of specialty brews now, so
it's not just the national brewers but the
microbrewers that are in the building as well.
Food, as a destination, is again a big part.
Then, finally, music.
Actually, one of the amusing things that happen
to me often is, if you're a loyal fan, I love
you.
You've been in our building for 25 years.
By and large, you like more traditional rock
and roll.
If you're a younger fan and you're in our
building, you want a little more hip-hop and
sort of modern.
No matter which I play, somebody else complains,
so you can't win.
Jonathan, as we finish up, we have just a
couple of minutes left, we have a really interesting
comment from Shelly Lucas on Twitter who says,
"Rather than focusing customers into buckets
based on who we are, we," meaning you-this
is your comment--"look at who our customers
are first."
I'll just ask you for advice as we finish
up for companies, whether sports or non-sports,
how to look at customers that way rather than
just as dollar signs.
Yeah.
Hi, Shelly.
For those of you who know me, you know I'm
a long-time marketer and was a CMO.
Part of the issue is the language we use.
I don't think I realized for a long period
of time, phrases like "target the customer"
just give us a mental model of, we've got
some payload; we've got some things that we're
just trying to find who it is out there that
wants what we have to offer, and switching
the mental model of the outside in that I've
mentioned a couple of times of starting from
who is out there that might want to engage
with us and what do they need, and can we
service their needs?
That mental model, which is what I think software
as a service was intended for us to think
more about, is a huge mental shift that helps
marketers a lot.
Sometimes what they need isn't a commercial
transaction.
Sometimes what they need is better education.
Sometimes what they need is a connection to
somebody else that has a similar problem that's
willing to hear them out.
Sometimes what they need is just a repeating
of something you've done before.
That listening, you know the old proverb "two
ears, one mouth" kind of stuff.
Now, a lot of people have started down this
direction with customer journeys, et cetera.
My worry when I did this in the past and with
a lot of my colleagues in the past, is the
customer journey always had the outcome of,
"How do we sell them something?"
And so, if I give you very tactical advice,
it's building customer journeys that don't
always have the outcome of having them buy
something.
You're sort of stabbing at the heart of how
many marketers think here, Jonathan.
I know.
I know.
I've always been a contrarian.
Sorry about that.
There are marketers around the country right
now, around the world, who are just kind of
dying inside.
No, they're not.
I think we all know this.
By the way, another lesson I've sort of relearned
as a marketer is, we've been talking about
it for almost a decade that B2B and B2C are
coming together.
Look, my last job was clearly as a B2B marketer
that was trying to use B2C techniques.
Now I'm in a B2C business realizing that I
need to use B2B techniques because more and
more of what's happening is companies are
buying blocks of tickets for their employees
or ways to host their employers, et cetera.
It's not just the season ticket holder.
It's not just the individual.
It's corporate stuff as well.
All of the classic yarns of breaking down
that, they're all coming true.
I'm living them in my own life, which is one
of the reasons I love the job.
Okay.
Well, it's an interesting job and, unfortunately,
we are out of time.
I want to say a huge thank you to Jonathan
Becher, who is the president of Sharks Sports
and Entertainment, which is the parent organization
of the San Jose Sharks, as well as the SAP
Arena and other organizations and venues in
the San Jose area.
Jonathan, thank you so much for taking the
time to be here today.
Everybody, thanks so much for watching.
Don't forget to subscribe on YouTube.
Go to CXOTalk.com, and you can check out lots
and lots of other great videos.
Have a great day, everybody.
Bye-bye.
