On the field, the Dolphins play a zone defense. In the consumer market, they play a zone offense. Your business should too.
Vince Lombardi, arguably the greatest football coach of all time, talked a lot about pricing.
“A man can be as great as he wants to be,” Lombardi used to say, “Once he establishes the price he is willing to pay for the things that are worthwhile.”
And price certainly is important in the NFL these days. Our own Miami Dolphins have turned pricing into an art form – executed with a level of discipline that would make Lombardi proud.
I’m talking, of course, about ticket prices and the way in which the Dolphins’ pricing squad has crafted a system that allows each of us to find the “price we are willing to pay” to attend a game at Sun Life Stadium.
And just as there’s a playbook for running the game on the field, the pricing team is running plays from the Pricing and Revenue Optimization (PRO) playbook, which is bulging with strategies and tactics that will improve the profitability of nearly any businesses.
By playing a zone offense, the Dolphins divide the field by their fans’ ability and willingness to pay. The pricing squad attacks each of these zones with a targeted product version, each with a pricing message as precise as a pass from ex-Dolphins’ quarterback Dan Marino to Mark Clayton.
The Dolphin’s offensive weapons take the form of product versions that include: single-game tickets, season tickets, club level tickets, the 3 Game Plan, group tickets, and special rates for military and first responders – each aimed at distinct customer zone.
And that’s not all. Later in the season, in order to guard against leaving any money on the table, the Zone Offense is likely to run two upgrade plays. The first is the Action Pack, which let’s people watch the game from the field, with food and nonalcoholic beverages thrown in. Or, for only a few dollars more, fans will be allowed to move between the field and the club level.
It truly is a blanket offense, covering every zone of the fans’ willingness to pay.
But successful teams don’t win by offense alone. Winning takes defense and the Dolphin’s pricing and revenue optimization squad has erected some fences that defensive coordinator Kevin Coyle could only envy.
The first fence is stadium security. You can’t pay for a 400-level seat and sit in a 100-level seat. You’ll get tossed out, which is embarrassing, especially if they catch it on the Jumbotron.
The next fence is “certain restrictions apply.” Yes, you can buy a seat for as little as $33. But (fence one) you’ve got to buy three games at a time. And (fence two), that price is limited to seats in the upper corners and the end zone. Fence three is that your tickets can only include one game against the very best visiting teams.
The lines of defense are everywhere, working to insure that all fans spend at their maximum willingness to pay and that the team reaches its goal of optimizing revenues.
It's a well-orchestrated effort, rooted in careful study of marketplace mathematics.
Very few of us own a sports team or operate a 75,000-seat stadium. But the PRO playbook has lessons for every business owner: Version your products. Put multiple prices in the market place to attract people with different willingness to pay and erect fences to keep people who would otherwise pay a high price from paying a lower price.
That’s how the Dolphins win the revenue game. And remember the words of Coach Lombardi: “Football is a great deal like life.”
Adam Snitzer is principal of Peak Revenue Performance, Inc., a Miami Pricing and Revenue Optimization (PRO) consulting firm, at www.peakrevenueperformance.com.