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Predicting which season ticket holders will renew and which will not

journal contribution
posted on 2014-08-15, 00:00 authored by H McDonald, Adam Karg, C Leckie
Research question: A major barrier to retaining existing customers is the difficulty in knowing who is most at risk of leaving (or ‘churning’). Given the strategic and financial importance of season ticket holders (STH) to professional sport teams, this paper examines the effectiveness of a range of variables in identifying the STH who are most likely to churn.
Research methods: A longitudinal field study was undertaken to reflect actual conditions. Survey data of a professional sport team STH were collected prior to the conclusion of the season. Actual renewal data were then tracked from team records the following season. This work was replicated across five professional sport teams from the Australian Football League, with renewal predictions made and tracked for over 10,000 STH.
Results and findings: The results suggest that the ‘Juster’ Scale – a simple, one-item purchase probability measure – is an effective identifier of those most at risk of churning, more than 3 months in advance. When combined with ticket utilization and tenure measures, predictive accuracy improves markedly, to the point where these three measures can be used to provide an effective early warning system for managers.
Implications: Whilst there is a tendency to view STH as highly loyal, these data reinforce the importance of actively managing all customers to reduce churn. Despite their commitment, STH do churn, but those most likely to can be predicted by examining their patterns of behaviour in the current season. Efforts to retain STH need to shift their focus from transactional value assessments.

History

Journal

European sport management quarterly

Volume

14

Issue

5

Pagination

503 - 520

Publisher

Routledge

Location

London, Eng.

ISSN

1618-4742

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2014, Taylor & Francis