Parken is the home court of the Copenhagen football club, FCK, and the largest stadium in Denmark with a capacity of more than 38.000 seats. At one end are the most loyal supporters – the C stands and right in the middle of the C stands is “section 12”, where the most committed supporters belong. These stands are not difficult to fill at derby matches against Brøndby, but when playing against the smaller Danish teams, the tension is lower and there are unused seats. To fill the C-stands FCK has shown a sublime way of offering customer value through subscription-based selling while simultaneously increasing revenue and customer value.
Season tickets has a long tradition, but these are rarely bought by the younger generation as it is a larger pay out and proposed as a premium product. As an alternative FCK has introduced a subscription model which is assumed to appeal to younger generations. At first glance it seems strange that FCK is willing to sell a subscription giving access to home matches (national leagues) at a monthly price of 13 euros when a one match ticket prices is 18 euros, knowing that FCK typically plays 2 home matches a month. To watch all home matches the ticket price would be more than 180 euros for six months. Supporters sign up for the minimum of six months paying 80 euros, which means a saving of more than 55%.
Conceptualizing this offering FCK has taken traditional SaaS metrics methodology in use. Knowing the Customer Value of the “section 12 supporters” is crucial to this calculation, and the missing key is knowing how many games a supporter watches on average. FCK may know that their supporters only watches half of the games on average. This means that the full value of a supporter is not 180 euros every six months, but only half, i.e. 90 euros.
When FCK sells the section 12 subscriptions at 80 euro, compared to the Customer Value of 90 euro, the discount is now only 10% and not 55%. In addition, FCK may know that each customer typically spends 10 euros per match on beverages and merchandise, and if you add this to the customer value, the subscription model becomes very attractive if it generates new supporters.
In this season, FCK has successfully expanded the section 12 area to include the upper part of the C-stands, and now section 12 is the largest dedicated grandstand for supporters in Scandinavia with 8.600 seats. If the subscription model can drive more than 4.000 extra seats at 13 euros per month, this is a move that can be registered on the bottom line of stock listed FCK (Parken Entertainment). If 4.000 section 12 subscriptions can be sold, the income potential is well over 0,6 mio. euro per year, and if each supporter spends 10 euro per show up, then additionally Euro 0,5 mio. is added yearly in beverage and merchandise turnover.
But the financial calculation is not the only positive benefit. Too often, subscription models are sold aggressively to tie in customers without offering real value. This is not the case here as the value proposition and the target group is clear. A large part of FCK’s potential fanbase are students or young people who live in the city with high rents and lower disposable income. This subscription model hacks right into what this group needs. To see a lot of prime league football at affordable prices. For sure many section-12 fans watch most of the games and offering those fans a discount could be a loss. But contrary to this argument, these most loyal fans get a huge value proposition that creates loyalty and increases Lifetime Value. And they will experience no conflict in offering new customers an attractive model. Overall, the supporters have an incentive to watch more games, which comes at no extra cost, and the noise level in the stadium will be higher which can be felt on the pitch.
Subscription-based sales should certainly be a model that can be used not only for other sports clubs but also for cinemas, theaters, and other players in the event and ticket industry, but to get it right you must know exactly your Revenue per Customer and thus your Customer Value.
(Disclaimer – this is an outside-in analysis of FCK’s subscription model. Ticket and subscription prices as well as capacity information is publicly available information. Information on customer value and behaviour as well as the underlying thoughts on the model are assumptions)
