For the last few weeks, because I'm being asked SO frequently, what do you do to retain customers in a recession (or less ominously but no longer applicable, its cousin an economic downturn), I've been thinking a lot about it and in fact actually developed a presentation on "Retaining Customers in an Economic Downturn" - this was before the recession became "official", though what was called horse sense in the 19th and early 20th century but not "car sense" later, pretty much told anyone out there that we were in one. I gave this InsideCRM webinar to 315 people a couple of weeks ago. You'll note, if you look at the presentation below, that I emphasize that in a downturn price becomes more of a top of mind concern than during healthier times.
But what may not be as clear is that this doesn't mitigate the power of a great customer experience during the recession. It might be that the customer's experience with the company has a more powerful impact on the customer's relationship with the company. Think about it. Who hasn't been worried to some degree over their job, their ability to pay bills, their economic and financial immediate and even long term future? Who hasn't read the headlines and at some point just wanted to stop reading them? For example, yesterday I was looking at the financial headlines via my Bloomberg iPhone app (free one folks - highly recommended) and I took a gander at the News section and read the following (for those of you with squeamish stomachs, "THE FOLLOWING CONTAINS SCENES OF GRAPHIC ECONOMIC NEWS"):
"U.S. In Danger of Worst Recession Since World War II as Job Losses Deepen"
"Cisco, Dell Risk Losing Sales As Bankruptcies Flood Technology Gray Market"
"New York Commuters Use Bikes As Economy Sags...."
"Murders Rise in Obama's Backyard as Recession Crimps Chicago Police Hiring"
....
I could go on because this is only a small, a tiny fraction of the (bad) news items out there. I didn't even touch on the news outside of the U.S. because I don't want to chase my pals overseas away from this entry. I don't even bother to open the monthly statements we get from our financial advisor. I'm one who firmly believes that since the human species is still here, this isn't the end of civilization nor is it even the worst thing ever - just a really bad patch we have to ride out until prosperity begins to peek around the corner and our portfolios recover their value over an arbitrarily chosen five year period.
The interesting thing here is how you would feel - and I mean "feel" if you saw one piece of really good news in the pile? You'd probably say "whew" or "oh that is GREAT!" or "thank god" or something that indicates a sense of relief or a little bit of hope that you feel or something akin to a happy moment. Now the likelihood of that piece of news affecting the timetable for getting out of the recession isn't that big but it still "feels" good to see something positive in a sea of negative. It feels better than if it were isolated and just presented out of the context of the recession. In the case of the isolated piece of news, your feeling might well be "oh, okay." and you'd forget about it in about a minute or less. You'd probably note it and move on.
But the "goodness" of the experience of that piece of good news is heightened in the context of the "badness" of the recession - and the onrushing, seemingly never ending tide of the bad news.
Hold that thought.
Sports, Fan Experience & Recession
The traditional wisdom in tight times is that "luxuries go" and the first thing that families cut back is entertainment dollars. That may well be true. I'm not an economist, nor do I pretend to be, nor would I want to be one right now - or ever for that matter. Sports, as much as we all (I) love them, are entertainment and professional sports in particular are incredibly costly. The proverbial day at the ballpark for two people can cost between $150 and $400 routinely and you can go WAY beyond that frankly. To go to Yankee Stadium for a September game this year, between StubHub bought tickets and the day at the ballpark alone it cost use $510 - though the seats were AMAZING. But that's an incredible amount. In the meantime, I see CC Sabathia sitting on an offer of $140 million for 7 years by the Yankees - who as you know I love dearly - and I think that that is entertainment expenditure. Insane. etc. I'm a well off fan who I think judging from how things are looking so far (fingers crossed) will still be able to afford a game next year, but what must someone who's job is in jeopardy who loves a team thinking? Here it is in a stream of consciousness:
"I can't go to the ballpark because I can't afford a ticket to watch this guy pitch or anyone else for that matter, and someone is offering this guy who is supposedly there to entertain me, that kind of money? No WAY am I going this year. I can't afford it and these guys, like CEOs of auto companies, are grossly overpaid.anyway. But....I love (fill in the sport). I'll miss that wonderful feeling I get at the ballpark/arena. Just being at the event and the ambiance, and the crowd noise and cheers, and eating something in my seat while everyone is screaming at players and umpires and my kids love it and it feels great to be there and have something like the (team) I can have some civic or nostalgic or other reason for emotional pride in. I could really use that now in particular - but I can't afford it - but it would feel so good - and I need some good feeling in the midst of the nerves and edginess I feel right now. But I just don't have the extra money"
Note something about this dialogue. The idea is that the sports are potentially an increasingly important diversion even though they are becoming more and more difficult to afford and are the cuts made first in budgets when cuts have to. That good feeling a.k.a. fan experience a.k.a. customer experience in the midst of gloom, edginess and fear. The temptation to "get away" and have a great "customer experience" meaning feel good for a day, is powerful but the cuts just have to be made.
Well, apparently, according to Business Week, varying sports are actually dealing with this issue - acutely aware of the recession and the need for those affected by it to have that marvelous customer "feeling' for at least one day or even more. Some of the franchises are doing something about it. The ones that BusinessWeek talks about:
- The National Hockey League's St. Louis Blues are doing 11 "Fannie and Freddie Mortgage Saturdays" - a fan drawing at each of 11 Saturday games with the winners getting up to $1000 a month for 4 months toward each of their mortgage payments. A great promotion
- The NBA's New Jersey Nets give out free tickets to fans who are out of work and post their resumes to the Nets website - and the resumes go to the team's sponsors. I think this one is particularly brilliant because not only do the fans get the free ticket but some hope for jobs - and the sponsors get qualified candidates.
- The MLB's Arizona Diamondbacks have fans nominating needy families for free season tickets. That's a WOW given the price of season's tickets.
Don't get me wrong. I don't think that these sports teams or professional sports leagues are doing this for the "feel good" part of it - though I don't think that there's none of that. But the stakes are incredibly high. Baseball earned $6 billion this last year. The NHL revenues jumped 9 percent last year. According to the Pittsburgh Tribune-Review:
"In 2007, the four major pro leagues pulled in $2.07 billion in sponsorship revenue, a 15 percent increase over the previous year. The NFL got $785 million from sponsorships, MLB got $505 million, the NBA $490 million and the NHL $290 million."
Those sponsorships come from companies who might be very willing to cut them as an unnecessary expenditure in 2009 with recession at their door. Automotive and financial services are among the biggest of the sponsors and we know what state they're in now don't we?
So providing that "fan experience" in some way is all the more life-sustenance critical for professional sports - and they have to do it in a world of bad - with their dollars probably easiest to cut.
I have to admit, I find their solutions pretty creative to say the least and I have to also say, just to remind anyone who would rather forget, that this is CRM without anyone's software notably involved. Just creative customer strategies and tactics.
Noted?
Oh, one last thing. I still think, recession notwithstanding, the Yankees will win it all this year. Just check out my forecasts on ZDNET for further proof.