C.R.M.

There's an interesting post over at The Lord of the Wing on Celtic's new methods of fan management. In short, Celtic has started data gathering on all sorts of fan behaviors, especially in terms of analyzing merchandise purchases, ticket purcheses, etc... LOTW's Kevin G. feels that while there's all sorts of happy talk about rewarding and respecting fans from management, it really is just a way of milking the customer:

I told the smart card was the start of all things evil. The start off oh you haven’t spent £100 in the last 3 months on Celtic merchandise that means nae away tickets for you. For me that paragraph sums up what the board think of us. The constant cash cow.

I bring this up since I think it reflects a trend you will see more of in all major league sports, and certainly in MLS. CRM, or Customer Relations Management, is a big business area affecting multiple companies. In MBA-speak (ie, a lot of buzz words embedded in Excel spreadhseets that use formulas like "VLOOKUP" and "PPMT"), it's a paradigm for organizing your business. Your organization, your software implementation, your sales strategy, all of it will be derived from a CRM perspective.

Part of the fundamental concept of CRM is the idea that a lot of your revenue comes from only a few of your customers. The common hypothetical example is that you'll get 80% of your orders from 20% of your customers. Given that fact, as a company, it makes sense to identify who those 20% are, what they think, how they'll react, and then keep them happy. It doesn't mean ignoring the other 80% of your market, but it may mean that you treat them differently. As such, CRM has demands that you gather lots of data about your customers.

This is part of the impetus for the custom credit cards or Celtic's smart cards as discussed over at LOTW. It makes it easier to track and understand your customers if they are buying merchandise with your credit card on your website. DC residents will no doubt remember Dan Snyder's attempts to impose this sort of ideology on Redskins fans last year.

Okay, I bring all of this up because just as Kevin was having one kind of experience with CRM and his soccer team, I was having another. MLS is, fundamentally, a business. An entertainment business, which survives, thrives, or dies not merely in terms of the product it presents, but also in terms of how well it treats it customers and fan base. Last week, DC United's Jim Hogan called me to check in on how I was enjoying the season so far. I was on vacation, so I never got back to him (but if he's reading: "Hey, I'm liking things so far. We want goals.") In the voicemail message he left me, he noted that I had not used one of the tickets in my Season plan (true - I was caught at work that Wednesday night) and offered to exchange the ticket for me. Now, there's no pure financial benefit to DCU if I exchange the ticket. In fact, one might argue there's a disincentive, since DCU already has my money, and if I exchange a ticket that's a ticket they might be able to sell somewhere else. But financially it makes sense to keep me happy. It also makes good business sense to keep your hardcore supporters happy. I have no doubt that Kevin Payne doesn't just let the Barra and Eagles have some perks because he's a nice guy, but because he knows that these people buy tickets and merchandise, and keeping them happy is a win-win. Yes, letting them stand (bounce) in the front of the stadium may block the views of some other patrons, but overall the benefit is a net financial positive. This is the kind of thing that perhaps the Real Salt Lake FO should learn.

Now, it's clear to me that DCU has some form of CRM system, given that Joe knows which games I have been at and which games I have missed. That doesn't really bother me. This is the good side of CRM. LOTW is experiencing the dark side, when CRM becomes not a way of keeping people happy, but making them jump through hoops for your product in order to increase your sales margins. That's only workable when you know your produce is so in demand you can get away with it. And in the long term I still don't think it is a viable strategy. It certainly won't work for any MLS team at this point. However, CRM should be used by most MLS teams, and it seems like, based on what we've seen, it is implemented with scatter-shot effectiveness. Don Garber talks about growing the base, but it seems to me like MLS is remarkably poor about sharing best practices that would help them do that. We hear all this talk about a single entity structure, but in terms of business implementation it really does seem like a bunch of tiny fiefdoms. I think that's ultimately a missed opportunity. The league needs to take not just competition rules, but business policies, and help standardize and share them. DC United, so far, has a great CRM system. But I've heard (and by heard, I mean "read on BigSoccer") too many horror stories at other teams. You may not be able to get complete parity in terms of talent on the pitch, but MLS should be able to get competent business organizations in all areas. It's not enough to have a conference once a year with a panel discussion on what teams do. They should be cross training across the league and sending representitves out to see how to take successful strategies and implement (and perhaps adapt) them to other markets. Or that's my take as an outsider, at least.