I received a lot of feedback on my last blog post, “Derby Boycott: Choose your Customers!” on various channels. In the post I discussed the decision fans of German soccer team Borussia Dortmund took to boycott the match of their team away at their biggest rivals, F.C. Schalke 04, to protest against rising ticket prices in the league.
Obviously, the topic is very emotional for the fans involved. But I wondered what that involvement means – also from en economical perspective.
There are many studies on the phenomenon of soccer fans (and fans in other sports, too). Most of them analyze the topic from a sociological point of view. They often focus on the social effects of being member of a more or less homogeneous group (self-confidence derived from being accepted from others, social links based on the fact that the group has the same enemies, etc.), the meaning of rituals (also often analyzed in comparison to religious activities), highly emotional behavior, fanaticism or violence.
However there is very little research on the relationship of fans with a brand. It wasn’t until a few years ago that the topic started to become recognized. When Douglas Atkin wrote a book entitled “The Culting of Brands” in 2004, brands like Apple and Starbucks successfully created a strong followership and reached the status of “cult brands” for parts of their customers.
I like Atkin’s definition of a “Cult Brand”:
“A brand for which a group of customers exhibit a great devotion or dedication. Its ideology is distinctive and it has a well-defined and committed community. It enjoys exclusive devotion (that is, not shared with another brand in the same category), and its members often become voluntary advocates.”
This definition is also right on the money for the brands soccer clubs represent.
The two biggest recommendation Atkin gives to brand owners are: a) Do not to dictate things. Members (customers) feel ownership of the community, they feel like they are the brand managers. So if you want to change something, ask them for permission. b) Create a sense of community and stickiness. His “simple” recommendation here: The more people are part of the group, the stickier the group. That’s why a brand owner should encourage more and more interaction among the group members.
Here’s where things become very interesting. When I read Atkin’s ideas, I instantly started to think about the many discussions on the success factors of social networks or web 2.0 offerings in general. When Facebook for example changed the privacy settings without asking the members for permission, they were confronted with a hurricane of complaints. Also, the ideas of Critical Mass and “Metcalfe’s Law” (more on the topic in my post “There is a free lunch, but Cleveland doesn’t (fully) get it“) that have been extensively used to explain social networks are perfectly in line with trying to make a community stickier.
The special thing about these networks is that they have no value per se, the value is in the users. So basically, the customers are the product – or at least a huge part of the product.
But what if you’re not Mark Zuckerberg and your product or service is not a fancy social network? Well, I believe that it may be less obvious, but that still your customers are part of your product or service.
Seth Godin brilliantly put it like this: “Your customers define what you make, how you make it, where you sell it, what you charge, who you hire and even how you fund your business”. If there is something that could be easily examined in the marketplace during the last couple of years, it is that not an objectively superior product will dominate the market, but a product with a high value perceived by the customers. I’m sure that Nokia phones have a way more elaborated technique than the iPhone, yet they lost important parts of their market to Apple, because many customers perceive a higher value from the iPhone, to give just one example.
A value proposition and the target customers have to be aligned. When Michael Treacy and Fred Wiersema speak about “value dimensions” in their book “The Discipline of Market Leaders“, it is no coincidence that the subheading of the book includes the term “Choose Your Customers”, which is the same I used for my last blog post.
Just building a great product and hoping that they will come and buy it does not work anymore. If my message in my last post was to wisely select the right target group, in this post it is to connect with your customers.
This will change your offering and many are afraid of this. It may feel like losing control. But there is no choice. Either you have full control of a product that won’t be successful or you give some control to your customers and get a successful product in turn.
This brings us back to Schalke vs. Dortmund and the match boycott. The whole idea of boycotting a match is not based on the fact that the teams may lose a few thousand bucks from ticket sales. It is based on the idea that fans are part of the product. If spectators are silently sitting in the stadium, the match will be a lot harder to sell than the same match in front of a heated up, colorful, creative and loud crowd.
Some soccer teams understand the logic. A good example can be found in the same league we just talked about, the German Bundesliga. Teams like F.C. St. Pauli and – guess what – Borussia Dortmund allow away fans to bring all kinds of fan utensils to their stadiums without prior negotiations on what is acceptable. By implementing this policy a few years ago they revoked rules that gave them more control but lead to less atmosphere and thus a less attractive product.
While this was relatively easy to accomplish (the main issue of security was tackled by communicating the rule that any away fan group that uses this freedom to provoke dangerous situation, e.g. by bringing in fireworks, etc., will be disallowed to bring any utensils in the years after), pricing is a much more delicate topic. It will be interesting to see how the teams will react to this challenge. Will they accept to lose some control of their pricing strategy or will they choose different customers instead, accepting that this will also have an impact on their product?
Some may call it a dilemma. I would call it the reality of markets today.