Customers and Fans

A marketer for a sports team spoke about the difference between fans and customers, which is critical to avoid misspending his budget.   A sports team has many fans, particularly when it is having a winning season, but fans are simply enthusiasts for a team who do not contribute significant revenue to the team.   Certainly, purchases of logo merchandise are a secondary stream of revenue, and watching games on television increases the advertising revenue, but his main concern is ticket sales – and in that regard, fans are not customers.   It struck me that this applies to many brands.

The most obvious example is luxury brands: there are many teenaged boys who are obsessive about sports cars, who study the brand and its products to the point that they are as knowledgeable as salesmen and who are otherwise highly obsessive about the brand – but who cannot purchase the car (though a very few may have that ability much later in life).   There’ a little revenue to be made from them through purchases of cheap logo merchandise, but little else.

I expect a more widespread problem is that of the fan who is the occasional customer – the enthusiast who roots for the team and buys a ticket once in a while.   But very often what prevents that fan from being a more frequent customer is something that marketing cannot fix: there is a functional barrier.   In his example, the functional barrier is that many games are held on weekdays, and it takes a die-hard fan to take time off of work on a regular basis to attend games.  The franchise could schedule more weekend games, at which ticket sales are higher, but this requires the cooperation of the league: the visiting teams want to benefit from weekend sales as well, so at best he could schedule half the weekend games at the home stadium.

Broadening the context, there are likely reasons that “fans” of consumer products who have functional barriers to purchasing it more often.  For example, if a product is not available in a convenient location, the die-hard fan will travel to obtain it, but the average fan will not: he will purchase it when it is convenient to do so, and may occasionally go out of his way to obtain it, but generally will not do so if it is significantly inconvenient.   The brand can open more retail locations or seek to place its product with general retailers, but there may be obstacles to doing so.

It’s also worth noting that entertainment is a luxury good for which there is no limitation on demand except the ability to devote time to leisure pursuits.   That is, it is possible for a fan to consume as much product as the entertainment venue can produce by attending every event.  When it comes to most consumer goods, there are more strict consumption limits: however enthusiastic a person is about a brand of gasoline, they will only purchase as much as they need, and it would be unreasonable to suggest that a fan would spend more time driving for the sake of being able to purchase more gasoline.

The ideal situation for any product is to have a large group of people who are both diehard fans and frequent customers – but the marketing department has little ability to create them.   In the sports example, it is the operations staff (coaches) who are able to improve the team’s performance and have winning seasons, which creates more fans.    In consumer goods, it is likewise departments such as manufacturing and design that make products better, hence deserving of fanaticism.   The marketer can advise operations on ways to improve the product, but in the short run is limited to the number of fans and customers that exist, and must seek them out.