The Effect of Online Secondary Markets on Season Ticket Sales

Dec 04 2015
  • Under review at Journal of Marketing Research
  • Co-authored with Yanwen Wang and Michael Lewis

Abstract

Sports organizations businesses and other performing arts organizations often derive significant portions of their revenues from customers that purchase season tickets. Given the importance of these customer relationships, it becomes critical for sports organizations to understand and model the drivers of season ticket decisions. Season ticket holders are unique among customers as they pre-purchase, at price discounts, all (or a subset of) events for a season. This pre-purchasing is a unique behavior because it implies that these customers purchase prior to the quality of a team being revealed through on-field performance. A relatively recent development that may have significant consequences for customer relationship management efforts is the growth of a robust and convenient secondary market for tickets. These markets such as StubHub make it increasingly possible for fans to recoup expenses by selling some subset of the season ticket package. This research investigates the role of ticket resale markets on CRM metrics such as renewal rates and customer lifetime value via a panel of season ticket customers over a five-year period. We build an econometric model and estimate it with Bayesian methods. Our results allow us to assess how the existence and policies of a secondary market alters buyer behavior.

Keywords: Sports Marketing, Season Ticket Sales, CRM

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