Reza Mamodhoussen | 5 min. read
Diving into how football’s pricing strategy looks and how marketers are helping
Branding is quickly becoming the fastest way football teams are generating revenue. This article
The cost of a single ticket has long been a talking point within fan culture. Over the years, ticket pricing has increased substantially. Teams have higher pricing based no their value and how much merchandising and competition prize money they are receiving yearly. We are going to be exploring two main types of pricing strategies:
- Psychological pricing (Pay-Per-View Pricing)
- Premium Pricing with a focus on Manchester United Football Club
“The moment you make a mistake in pricing, you’re eating into your reputation or your profits”– Katherine Paine
Psychological Pricing (PPV)
Most fans in the United Kingdom were paying £14.95 to watch football matches, however, the premier league had decided to change that when the pandemic hit. The Mirror, a popular newspaper in the U.K. stated, “…the premier league decided to flaunt its greed.” Many of these fans pay for subscriptions, and therefore a £14.95 pay-per-view basis was the tipping point.
The premier league decided to follow a method called price anchoring. As Ed Heskins pointed out in his article, “price anchoring is the practice of establishing a price pint against which customers can refer when making a decision.” Therefore, when you set a higher price expectation in the minds of your customer base, the people selling you a good or service can increase their achieved prices and improve discounts and the value of lower-value products (Expensive wines in restaurants make the cheap ones feel affordable).
It can also go against you. As the premier league, in the United Kingdom, set for untelevised matches to be watched for free, they had set a precedent and increasing prices after that can be deemed controversial. There is a culture in the U.K. of watching games in pubs for ‘free’, therefore, for these fans, an extra charge will feel quite excessive.
Ed Heskins points out, “pricing for different customers according to the value they take form your product is another form of optimal pricing.” When it comes to sporting matches, the factors for segmentation are important. The premier league had different price points depending on: teams playing, seat in the stadium, view, and access to facilities. This is crucial for marketers, allowing them to target fans with different level of price sensitivity.
We also must include season ticket holders, however, a flat fixed fee for all matches is virtually impossible. When you are segmenting your prices, it improves customer access to the good and service you are providing them with and as far as customer retention goes, you can keep your customers happy.
Manchester United has long been known as a club that focuses more on its branding then actual results. Over the past decade, after the retirement of their longtime Manager, Sir Alex Ferguson, United decided that their branding strategy must be impeccable. This strategy of premium pricing has allowed United to be valued as one of the most expensive teams in the world. Their American owners, the Glazer Family, have made it their goal make United a brand, rather than a club. Most fans are not content with this, however, even though they have not won any major trophies for several years now, they maintain their status as the biggest club in England, due to marketing.
Manchester United understand that they have a loyal fan base, including me, therefore, premium pricing does not offset most fans. It is one of the most followed teams in the world, therefore, their premium products, are set at high value.
Pricing strategies are the backbone of revenue streams for teams. As a marketer, knowing when to implement these and promote them are crucial. Tune in next week for more exciting information!