Fan Loyalty & Secondary Markets
This research project combined classic customer relationship management with sports fandom. Fans are an especially passionate type of consumer so we can get a pretty good understanding of the sports business by analyzing fan behaviors.
From my perspective, studying fans is more interesting because the intense passion for their teams, entertainers or politicians, leads to some unique behaviors. The project started with the question of how does a secondary market like StubHub influence the behaviors of fans?
A simple question that required a complicated analysis.The basic structure is simple. The advent of a secondary might reduce demand for season and single game tickets because there is less of a need for the fans to pre-commit.
Alternatively, the creation of a secondary market might increase demand because consumers can unbundle ticket packages and sell unneeded tickets.But the analysis is complex. We start with an economic model that captures the structure of consumer utility and costs related to the options to purchase season ticket, single game and secondary market tickets.
It gets especially complicated because we build in expectations of team quality based on payrolls and current winning rates. It’s a math heavy read but at its core, it is a very through analysis of fan behavior.