StubHub Beyond Shows Importance Of Creating The Right Loyalty Plan
BY ADAM GROSSMAN
StubHub announced a new customer loyalty program earlier this week called StubHub Beyond which offers its highest revenue customers several new benefits. These include a dedicated support team, access to VIP events, and the ability to secure refunds up to seven days before an event. StubHub Beyond will initially only be available to customers that spend over $10,000 per year with the company and only in the U.S. for now, with the company looking to expand globally in the near future.
There are several interesting insights that come from the launch of StubHub Beyond. The first is that the loyalty program “is a first within the ticketing industry” and the company is using this as a way to “stand out among its competitors in the secondary market.”
That may seem counterintuitive because we have discussed in past blog posts, for example our post from last week, that many companies use access to live events as a way to better engage with their customers and differentiate themselves from their competition. The apparent fact that the ticketing companies that provide access to these events have not had this type of loyalty program for their own customers is interesting.
This is all the more surprising in that this is not the first time that StubHub has had a loyalty program. From 2011-2016, StubHub Fan Rewards was a point-based program that was similar to credit card reward programs. More specifically, “members accrue rewards based on a percentage of eligible purchases, and for every $10 earned member receive a $10 FanCode (sic) to apply toward future StubHub purchases.”
There are several studies that show that loyalty programs “are effective in increasing consumer purchase behaviors over time, but their impact differs across consumer segments and markets.” StubHub realized that the impact on their consumer segment to receive discounts on future purchases did not generate the results it wanted. Instead, the company wanted to create a reward program starting with what was valuable to its most-valued customers.
The events that seem to be most valuable to StubHub customers are sports-related events. The first StubHub loyalty offerings will occur this Thursday with a private tour of Yankee Stadium including batting cage practice. A similar event is scheduled for September at Citi Field. While StubHub is a secondary marketplace for both sports and non-sporting events, the focus on sports for the launch of the loyalty program reveals that this is where its highest-value clients can or want to spend their money.
The fact that StubHub, a company built on analytics and data, is using these events specifically targeting high-revenue clients is a good indication that other sports organizations should follow suit. More specifically, tickets to unique sporting events (e.g., access to batting cages at Yankee Stadium) is something that high-revenue customers will value. This type of experience helps partners of sports teams to differentiate themselves in crowded competitive environments.
The ability to attract and retain these clients through unique events, particularly for companies operating in a business-to-business environment, using these types of non-media assets has been difficult for buyers and sellers of sports sponsorship to value in the past. Our Corporate Asset Valuation Model (CAV) can do this more accurately because it prioritizes fit which maximizes the probability of driving tangible business outcomes for each company.
Loyalty programs are similar to sponsorship activation in that the most successful programs consider audience fit. StubHub Beyond also shows the importance of providing access to sporting events as way to maximize audience engagement particularly for high-value demographics.