3 valuable fanshop revenue hacks you didn’t know about 🤫
Sports are not the same without live spectators. Without them you lose the beloved atmosphere for fans, but a lot of revenue as well. The total matchday revenue lost in the Big 5 football Leagues by having to play behind closed doors is estimated to be upwards to $718 million. Many sports leagues across the globe were suspended or even canceled. Analysis suggests that the sports industry will suffer losses of $61.6 billion due to lost revenue.
“Ticket sales are a key source of revenue for the clubs. In addition to that, sponsorship money and income from television rights are threatened because clubs are bound by contracts to play their games.”
Christoph Breuer, professor of sports business and management @Sports College Cologne
Losing revenue has been especially demanding for smaller clubs. Between 100 and 200 clubs in Europe in danger of going bankrupt. In the Bundesliga alone the 36 professional teams in the first and second divisions look at potential losses of €750 million.
“While all will be impacted, those clubs from smaller countries typically with a greater dependence on matchday revenues risk being hit the hardest.”
Dan Jones, Head of Sports Business Group @Deloitte
The same goes for other sports. Major League Baseball projects a $4 billion loss due to empty stadium games. The teams in the NFL stand to lose a combined $5.5 billion. Forbes magazine states the loss makes up for around 38% of total NFL revenue. The Dallas Cowboys, for instance, the biggest team in the League, could lose over $950 million in stadium revenue from tickets, food, and merchandise sales.
Fortunately, you can grow new revenue streams outside the in-stadium experience! Here’s all you should know:
The opportunity to maximize online merchandise sales in your fanshop
Why gamification drives revenue for E-commerce
How to use gamification in E-commerce?
Examples of gamification in E-commerce
Driving referrals with gamification in E-commerce
The secret power of a bidding system
Pushing next-level loyalty with E-commerce gamification
👕 The opportunity to maximize online merchandise in your fanshop
As stadiums are opening up again clubs are facing new challenges. Currently, clubs are allowed a third of their actual stadium capacity granted they follow all the security measures from their government. It might even take another year before they can run at full capacity again.
“Even Premier League clubs will not want capacities of 20% or less for too long. There’s the cost of signage, stewarding, temperature checks. Clubs will be asking if it is worth them opening.”
Peter Houghton, Director of Operation @Football Safety Officers Association
E-commerce is the fastest-growing revenue source in the sports industry. With an annual compound growth rate of 7%, some of the biggest Leagues in sports are even hitting the billion-dollar revenue mark. A study by ESPN showed that in the US alone the 4 main sports leagues reached a total of $22,5 billion.
Additionally, unlike the global economy, E-commerce has continued to expand, reaching record sales since the start of the pandemic.
🎮 Why gamification drives revenue for E-commerce
Gamification is the use of game principles and elements in a non-game context to stimulate positive customer behavior.
So what is gamification in E-commerce? It’s when you facilitate the buyer journey by setting clear goals and rewards to push the customer experience forward and which encourage behavior that supports your E-commerce goals.
For example; you can reward fans with points every time they make a purchase to increase their purchase frequency, and thus their customer lifetime value. Most of the time, gamification for E-commerce uses points to exchange for rewards such as free gifts, exclusive promotions, and product discounts.
🤔 How to use gamification in E-commerce?
Gamification in E-commerce only works when it’s done right. Here’s what a good experience looks like:
Put your customer behind the steering wheel
This is basic behavioral psychology. According to the self-determination theory people like to be autonomous. Don’t you like to make your own decisions independently? The ability to control your own journey and goals will make you more motivated to carry out the actions you set out to do.
People tend to evaluate the outcome of an action or process more positively if they are able to influence the action or process themselves. This is a behavioral bias particularly useful in E-commerce. It can be used to optimize the customer experience, encourage engagement, and ultimately increase conversion.
Boost shopping cart conversions by adding game-elements
A great gamified experience is simple and shows you exactly what you need to do. People like to know where they’re going and what they need to do. There needs to be a clear scenario and the buying journey should flow nicely.
Home Décor company Crate and Barrel for example uses a progress bar for their check-out process. It shows buyers at which point of the journey they’re at. Our human desire for accomplishment is what fuels us to complete the progress bar.
Reward the behaviors that grow your E-commerce store
Rewards don’t necessarily have to be monetary or physical. Children’s retailer Step2 for instance introduced a loyalty program called ‘Buzzboard’ built around the social experience. It rewards their customers for the amount of buzz you create for their brand.
Customers are awarded points for reviews, sharing posts, and creating user-generated content. In return, members were upgraded through status upgrades by earning badges and ranking higher on the leaderboard. Step2 clocked a 135% rise in referred traffic from Facebook supported by a 600% increase in user-generated content like images and videos.
🤑 Examples of gamification in E-commerce
The truth is, most E-commerce stores are already using some form of gamification. We’ve all seen the progress bar in the check-out process and giveaway competitions on social media are becoming mainstream for retailers.
However, some go beyond the basics and add loyalty and referral systems such as points and rewards to keep users hyper-engaged. In gamification for E-commerce there are lots of opportunities in point systems to trigger, encourage, and reward certain behaviors that increase revenue.
🚀 Driving referrals with gamification in E-commerce
Online flower shop Teleflora for example offers points when customers give reviews, share their content on Facebook, or answer other customer’s questions in the Q&A section. In return, they earn badges and gain a higher ranking in the community. After implementing these gamification elements, they gained a 105% increase in Facebook referrals and got a 92% higher conversion rate.
🎰 The secret power of a bidding system
What sets eBay apart from other sites is how they use gamification in their E-commerce experience. Think about it. You don’t just buy a product of eBay, you WIN it. Not only does it play with a human’s innate sense of competition, but it also triggers the fear of loss. Their bidding system works so well its customers don’t even mind spending 10% more than they intended to.
As a leading gamification software provider, StriveCloud applied the same method in creating a lottery system to raise charity funds for the Belgian football club KAA Gent. Fans of the club could bid lottery tickets on certain prizes. The more tickets they bet, the higher their chances of winning.
By adding gamification elements like surprise and uncertainty to the experience, StriveCloud helped KAA Gent hit 170% of its fundraising target.
🤝 Pushing next-level loyalty with E-commerce gamification
Shein is one of the largest online retail companies in the world. They garnish over 4 million unique monthly visitors and rank as the third most visited site in the UK. In 2019, they were estimated to have $2,9 billion in revenue.
“The company’s traction with generation Z has been particularly pronounced. Today’s under-25s don’t respond to the same pull and push factors like their parents’ or older siblings’ generations. Shein has been smart in targeting this group in several ways, and we can draw a number of lessons from their success”
Mairi Fairley, Senior Leadership @OC&C Strategy Consultants
Shein uses tons of E-commerce gamification techniques to keep their younger audience engaged, active, and buying. It all starts with their points system. You can easily collect coins by completing certain actions such as verifying your email or posting a review on a product. 100 points equal $1 which can be used to buy more items in the online shop, thus keeping the customer shopping.
Additionally, Shein is a pro at using discounts to their advantage. They regularly give promotions or have flash sales in which they push a limited amount of products at large discounts. This way they leverage scarcity and fear of losing out to drive sales.
Furthermore, Shein makes use of personalized feeds and adds social media aspects to their E-commerce app to create a community around their brand and encourage interaction among users. They also add elements of surprise to the experience by adding regular giveaways with variable rewards.
All coming together
Now that clubs are forced to play matches behind closed doors, they need to find new revenue sources. One method that has shown stability and even growth during this pandemic is E-commerce. So how do you get the most out of it? By gamifying your E-commerce experience!
Why? Well, here is what gamifying your fanshop might mean for you:
👉 Improve conversion rates with 50% and more
Global cart abandonment rates hit almost 74% last year. 20% of people said their main reason for leaving is a long and confusing checkout process. Thus, simple game elements like a progress bar could instantly improve conversions by showing the customer exactly where they’re at in the journey.
👉 Grow your fanshop through referrals
Referral based discounts are among the most common gamification methods in E-commerce. Since the rise of social media referral campaigns has gained a lot of attention. It’s essentially the new word-of-mouth. It is seen that brands who offer points or rewards for reviews and Facebook shares get insane results with referrals surging up to 135%.
👉 Loyal customers, worth up to 5X your average buyer
81% of consumers say loyalty programs make them more likely to continue doing business with brands. If you’re wondering why that matters, a mere 5% increase in retention can increase profit by 25% to 95%. Highly engaged customers not only spend more, but they are also four times more likely to refer business.