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 The New Commercial Era at Anfield

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Shankly Gates
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PostSubject: The New Commercial Era at Anfield   Mon 19 Jul 2010 - 14:01

As a new season dawns at Anfield fans may notice the dawning of a new commercial era also taking hold at the club.

In regard to transfer policy we are being linked with a player such as Joe Cole who left Chelsea because they wouldn't meet his wage demands.

The question that immediately ask itself is how can a club such as Liverpool widely recognised as being up to it's eyes in debt be in position to meet
the pay demands Chelsea could not?

Fernando Torres and Steven Gerrard are reportedly being offered lucrative add ons to their exisiting contracts to persuade them to stay, how can we afford it?

Quite simply the club is being put on proper commercial basis.

We have long lagged behind a number of clubs in the Prem on this front and not all of them the largest. In fact we have steadily been overtaken on this front since the creation of the Prem. This has resulted in other smaller clubs being able to sign players we could not.

So you will see players being offered lucrative bonuses to their exisiting contracts that give them a larger share of the commercial rights that are attched to the players.
If the players and the club are successful then the players will earn more, if not then the club don't have to pay the add ons.

You will have noticed the rise in ticket prices, the extension of Hospitality tickets areas now extending to places outside of the stadium such as the Sandon and Stanley Park

The increased range of goods on offer from the club shops and a marked move upmarket in regard to the shoddy quality we all had to put up with fairly recently.

No doubt not everyone is going approve of these moves, I imagine the Spirit of Shankly group ( who advocate boycotting the clubs goods) will not like this at all.
Many fans will bemoan the increased ticket prices. Others will complain that more tickets are being channelled into the Hospitality and Thomas cook travel packages meaning
undisputedly that less will be available for fans to purchase direct. However the club has increased the number of tickets available direct to fans on a priority basis as long as
you pay the £29 fee to be able to apply for them.

This is where you really have to stand up and be counted.

There is absolutley no point in sticking your head in the sand and denying that progress is taking place at other clubs, but we are Liverpool and don't need to follow!

It is exactly this type of thinking that has lead us into our current financial predicament.

You just can't have it both ways.

You either accept that we have to compete not just on the field but in my opinion more importantly off of it on a commercial basis if you wish to have any hope of not only attracting but also keeping your best players and giving the club a fighting chance of competing on the field without one hand tied behind our backs.

This new commercial era is long overdue at Anfield and I for one welcome it with open arms as it represents our best chance of bringing the Prem title back to Anfield.
LFC scarf

We are going to have to be patient though as our club has been allowed to slip far behind our competitors and we have a lot of ground to make up.

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PostSubject: Re: The New Commercial Era at Anfield   Mon 19 Jul 2010 - 15:56

Last month, Reds Chairman Martin Broughton answered 22 questions submitted by supporters about his role at the club, investment and transfers and explained that while the club was up for sale, Steven Gerrard and Fernando Torres most certainly weren't.

Now, today, in the second in a new series of interviews where we give you the chance to quiz senior officials at Anfield, it's Commercial Director Ian Ayre's turn to answer fans questions posted on forums and sent in via email on the subject of the club's commercial activity.





1. Bill Shankly said there was a holy trinity at a football club - the manager, players and supporters - and that directors don't come into it. Why are you, as Commercial Director, giving an interview on LFCTV?

One of the things people said to me when I first arrived here was that communication wasn't Liverpool's strongest point. I think it's important we utilise our own media - our TV channel and our website - to answer fans questions, to communicate with the fan base and to make sure that people hear from the horses mouth from time to time, rather than in the newspapers and other conjecture around the internet.

2. Do you give preference to ticket applications from long-distance fans who are likely to spend more in the club shop than local fans?

Not at all. The one thing we always say is that we try to treat all of our fans the same. There's no preference based on where you're from, how much you earn, what your background is or anything like that. It's all about having transparency with tickets. We only sell tickets via three or four groups. We have season ticket holders, our members, supporters clubs and then a few tickets go on general sale.

It doesn't matter where somebody comes from or how far they travel. People might think that somebody travelling a long way from overseas might spend more money in our club store and that's probably true, but that's usually because that person travels to a game once or twice a season whereas our UK based fans will come on a very regular basis and cumulatively they probably spend about the same, so there's no additional value to Liverpool Football Club in selling a ticket to a long distance fan versus anybody else. We definitely wouldn't want to create a preference for that. It's about treating everybody equally.

3. Why does it cost £50 more to purchase a season ticket when bought in person at the ground/via post or phone than online and why has the price increased by 7% in spite of a mediocre 09-10 season?

First of all the change to give a discount to our pricing online is really the club's business moving with the times. In all walks of life now, whether it's our banking or shopping, we see businesses doing something online. That's equally important to us. If somebody buys, renews or has a relationship with us online, it's much easier for us as a club to communicate with fans. We wanted to incentivise people to use that channel. It's been massively enhanced over the last few years and it's certainly the way we want to be in the future. I'm pleased to say that to date we have about 85% of people who have taken up their season ticket option online. We now have the opportunity to communicate with those season ticket holders on a much easier basis for both sides.

In terms of the rise, there are two elements. We don't base our ticket pricing on the performance of the team. We're Liverpool Football Club, this is a season ticket for next season and all of us as fans, and all of us who work at the club, believe we'll have a proper go next season, as we always do. That's what's important. It's a season ticket for our Premier League games.

In terms of pricing we tried to look at our season ticket holders separately from match day ticketing. As everybody knows, out of the club's control VAT returned to 17.5% so we had to have that increase. We sold season tickets the previous season at 15% VAT, so there was a 2.5% rise just because the government went back to 17.5%. In addition, the standard rate of inflation took it to where we got to.

The other thing I would say is that people have to understand that as a club we have to maintain a distance between ourselves and our competitors. Ticketing is a huge part of the revenue stream of any football club and as our competitors and other clubs have a different pricing level, we have to make sure we don't get too far away in terms of pricing. It generates so much more money for them and that being the case it gives them more money in the pot for players. It was about finding what was right, what was fair and that's where we ended up. If you look across the league you'll see we're about half way in the league table of ticket pricing. I think it was the best solution for this particular time.

4. Why do you continue with the blatantly unfair away tickets loyalty scheme which makes it impossible for fans to break into the closed shop?

That's a great question and also a very topical one. It's something we discussed with the Premier League recently, as everybody does. It's also something they flagged in a research project they did around ticketing. And it's something my team are heavily entrenched in at the moment in trying to find a solution.

One thing I would say is I don't have a solution right now. It's something we're working on and as we've learnt over the last few years, it's really important to get this sort of thing right. What we don't do is fly with the solution we kind of think is okay. We've been talking to people, we'll talk to more people, to fans, to different groups, because that's the best way to find the right solution for everybody. Some people will always feel like they're losers and some will feel they're winners in that kind of exercise, so it's vital we get it right. I can tell fans for sure it is top of our agenda.

5. As a pools agent of 15 years, do you think your decision to close the Development Association is selling out to the "prawn sandwich brigade" because I certainly do?

We're not selling out to the prawn sandwich brigade. The idea of closing the Development Association is one of those natural changes in the development of business ongoing. Those tickets won't be going to corporates, they are going into our Membership pot which now has almost 100,000 members. We really think that as we move forward and grow as a business and as a football club that making tickets available on a transparent basis, making them available to members who we can interact with and can have a regular communication with, seems a fairer system than what was a well run scheme by the Development Association. Good people ran it but it's just had its time. We did some research last season and in certain games only 40 per cent of tickets for the Development Association were being utilised. It wasn't really a proactive way to distribute tickets and as I said at the start, our aim is to always get to the most fair and balanced solution and we believe that's the right way forward.

6. How pleased are you with the sales progress / launch of the new shirt? My very unscientific research indicates a much reduced sales compared to previous launches - could you please indicate whether this would be the case?

Quite the contrary, actually. We've had what was the fastest selling shirt we've ever had in the new home shirt and the largest amount of orders in the fastest time, so our retail business and particularly our shirt sales have never been so good. It's a great shirt. Adidas did some great work with us on that. It's got a new sponsor and I know on the day we launched we shipped 35,000 parcels to over 100 countries. That's a record for us on day one and sales have been fantastic since then. I think we've seen historically, and we continue to see, that our fans are very loyal and are keen to keep supporting us at retail and that's something we're all very grateful for. I think it's about getting the product right and our new home shirt - and subsequent shirts we will be releasing - will fit what they want.

7. Which player sells the most shirts?

Last season it won't come as any surprise that Fernando and Steven were the biggest sellers. They sold about 30,000 each which is great, but most people tend to go for their own personalised messages.

8. Did the club attempt to profit from Hillsborough by stocking shirts printed with Justice for the 96 on the back of them?

No and I'd say that in the last few months this has been the most disappointing part of our retail business. It was a very isolated incident. The reality was a lady from Canada ordered a shirt online and asked for 'Justice 96', which is something we do if people request it. We certainly don't sell that product in the stores. We sent it out and made a mistake in that it was shipped with a man's shirt and not a lady's size. It was our mistake so we allowed that lady to return the shirt and inadvertently a member of staff in one of the stores took it from stock, priced it and put it on a rail. It was pointed out by a fan and was taken off immediately. There were no other shirts and never have been.

What I found most disappointing was that instead of trying to get to the facts and get to how this happened, what we saw was a huge tirade of activity on the internet claiming that the club was trying to profit from Hillsborough. The club has not, will not and does not do that and I think the majority of our fans know that. A national newspaper ran a story on it and it's very unfortunate because this is always going to be a very emotive subject at Liverpool and the facts were easy to establish. My message to fans would be that if things like that happen, we're here to talk to people. There are plenty of communication routes. Lots of the different supporters groups know how to get in touch with me and that's the easiest way to resolve these things. That's the way forward for these kinds of things.

9. Do you see LFC opening any new stores in the next year and if so where and why there?

It's something we have been doing a lot of work on in the last 18 months. It's not as simple as people think. I spent a lot of time living in the Far East and people think we have millions of fans there, which we have, but it's a big place with a lot of big countries. As such it's very difficult to establish a store in somewhere like Hong Kong where we do have a lot of fans, but in order to have a store there we need enough fans who would come through the door on a daily basis rather than once a week or once a month and that's always the challenge.

At the forefront of trying to find a solution on that, we're looking very closely at the moment at Dublin and Belfast. We have spent a lot of time trying to find the right venue and the right store and we're probably most advanced on that today in Belfast. There will be more news on that as we get there but it's going to be about finding the right facilities and making it work. I have seen other clubs opening stores internationally and then closing them and we don't want to be about that. If we're going to do it then we'll do it for good and we'll do it properly. It's definitely an area we're focused on.

10. Clearly Asia is rightly the main focus for overseas development of the brand but are we overly focusing on Asia at the expense of other potentially lucrative overseas markets? Man United and Chelsea appear to be looking West as well as East.

I wouldn't say we're more focused on Asia but I would say that Asia has taken the lead and that comes down to a number of things. I joined the business three years ago and one of the things I was tasked with was growing our business internationally and growing our commercial business.

Growing our commercial business started with us cleaning up the house, being better commercially, improving the way we do things, improving our family of partners and sponsors and improving some of our systems. The international part is much bigger and much harder. We started by looking at our base of partners and if you look at our big sponsors now we have Standard Chartered, Carlsberg and Adidas, all of whom have a very big Far Eastern focus, so it makes natural sense for us to utilise the foothold they have in their respective markets to help us grow our business in that part of the world. We probably will be more focused on the Asian market initially, but that's not to say we're not doing anything in other markets.

We do a lot of things that people in Europe don't see. For example, we have a very exciting project going on in India, we've established a university project where we have our own faculty with some partners. We're giving education to kids in India in football related disciplines such as sports science, nutrition and technology. That's been going on for about a year now but it's not something we feel we need to shout about in the UK. It's something for India and the Indian community and is something that's been very successful.

Also, quite recently, we have finished a TV series in Vietnam which was a 'search for a star' type of programme. Again it was very successful where we worked with a lot of commercial partners. It's a Vietnamese programme for Vietnam with a winner who is now a superstar. It's all good stuff and all helps grow our business and our presence in that part of the world.

In the US we've done literally hundreds of soccer camps and training schools and we will definitely focus on that. Asia is the focus for now but certainly not at the detriment of other markets.

11. Follow on Question - One fan asks, Shouldn't we sign a high profile Asian star to help increase our profile in the lucrative Far East market?

That'd be great, wouldn't it? Unfortunately, or fortunately, whichever way you want to look at it, I don't get to choose who we buy. There's a myth around simply signing an Asian star and saying it would transform our business commercially. It can definitely have an impact but it's all about the quality of the player.

I think Manchester United have the best example in Ji-Sung Park and I know that has transformed their business in Korea, but the key there is the quality of the player. He plays for them regularly in the league and the Champions League, he's an international player, so it's about finding the right player. That falls into the playing side of the business. I don't think anyone at Liverpool Football Club wants to see us sign a player for any token reason. If we find that kind of opportunity it would be something we'd be interested in, but it'd always fall to the playing side.

12. Are you planning to introduce vuvuzelas to games at Anfield?

[Laughs] I don't think so but I guess it will come down to demand. A lot of people will have a view on it but I think the jury is still out on vuvuzelas. Joking aside, with every product that we sell it's all about demand. If we feel there's enough demand then within reason we'd offer up whatever people want.

13. How do you decide what products the club stocks?

There's a big team at retail. People might be surprised to know that we have over 150 people working in our retail business alone, the shops, the warehouse, the buying and the design. We have real experts who look at everything from what's trendy and fashionable in markets, what other brands are doing well outside of football. If you go into any of our stores, I think something that is very unique to Liverpool FC is we operate as a high street retailer rather than football retailer. We don't just have kit. A lot of clubs have kit and a few polo shirts and they change them once a season. We change our ranges very quickly and we choose our products through a very scientific and communicative process. We look to understand what we can sell, whether we can get the right price and the right margin so we can deliver value to the customer and generate value for the club. It's an extensive exercise and very well thought through.

14. Do you think that success on the pitch has a parallel effect on success in the commercial department?

Yes, clearly. Success on the pitch will always make us do better commercially but over the last few years we've changed lots of things and I think we've proved to be very successful. Liverpool is a very special club with very special fans and a very special history and legacy around it. We are always attractive to people, we are always supported and stood by and I think that's what makes us unique. As the Commercial Director that's a fantastic asset to work with. The biggest example is our recent new sponsorship with Standard Chartered. They recognised all of those values and recognised it's not about this year, last year or next year. It's about Liverpool Football Club and what it represents, what it has represented for many years and what it will represent.

The playing side definitely has an impact but we have such a sustainable hard-core base of value and support that day to day I think we'll always be successful.

15. Are you a Liverpool fan?

I am a Liverpool fan. I was born in L4 and grew up minding cars on match day around Anfield! I went to all the home games and most of the aways until I was about 16 when I joined the navy and then lived overseas a lot. I've been to many, many finals and lots of games and I think what is unique and interesting doing this job is that as well as growing up a Liverpool fan and knowing what it's like to be at the centre of it all, I have also lived in Hong Kong, Malaysia and China. I know what it's like to live 6,000-7,000 miles away and watch the team on TV, read news on the internet and in the papers, to buy kit online. I have experienced all of that and I think that sets me up well to know how different fans think and what different fans want. That's really important.

16. Do you have a favourite memory following Liverpool?

I always think it's difficult when people ask that question to single one out. I was at the game in Istanbul but for me I think my biggest memory was the St Etienne game in 1977 when David Fairclough scored the winner and we went on to beat Zurich in the semi-final and then the final in Rome. I had watched Liverpool since about 1967 and to get ten years on, having seen the great sides I'd seen, to get to the pinnacle and to see us go on and win the European Cup was amazing. We've all heard the stories about the journeys to the game and to be involved in all of that is something people can't take away and it's just an amazing thing.

I guess the other biggest thing for me was getting this job. I'm a local boy who has travelled around the world and for me and my family it is both an honour and a pleasure to do this job. It means a lot to do it and to be successful at it.

17. Who do you report to on a daily basis, do you feel your time at the club has been successful and have you achieved what you hoped when you first took the role?

I report to Christian Purslow on a day to day basis and we have a great working relationship. We have a very good structure now at the football club and a good structure of how things get done day to day. We have a very experienced executive team and that works well.

When I arrived I think it would be fair to say we weren't in the best shape commercially. It was much worse than I thought it would be. That was a great challenge and it has been a challenge, but it's also been a success. Overall people can see, and it has been widely reported, that we have had massive success in generating new revenue. I think it was recently reported that we have achieved 85% growth in commercial revenues over that period.

We have some great assets now that just didn't exist before. We have a great family of partners, we have four stores in the city, we have one of the most visited websites and a TV channel going to 100 million people. Those things are important because they all reach out commercially and support our partners who pay a lot of money to the club. They also support our fans and the important thing about my job is finding that balance between generating revenue which puts players on the pitch, but also supporting fans and making sure fans are treated right and get what they want from a commercial sense. I feel we have completed step one. I am very focused now on international which is step two.

18. LFC supporters obviously consider themselves as more than just customers. What efforts do you believe are being made to balance the view that supporters will attend games and buy merchandise regardless of how they are treated by the club?

What I would say is that we certainly don't take our customers for granted. I probably believe that Liverpool fans do a lot despite everything, despite success, despite the way they might be treated, but that's certainly not how we look at them. What is important is the customer. We have an ethos within our commercial team based around the customer being centre of everything. I made two appointments when I took over at Liverpool, one was a Head of Customer Relationship Management who looks at how we interact and how we talk with our customers and we have a Head of Customer Experience who pulls together ticketing, customer services and membership. So we have two people whose job is focused on making the experience of our fans, wherever they are and whoever they are, better. That has manifested itself over that time in things like having the largest team store in Europe where we now have the ability to serve more people more quickly so they don't have to be in long queues. We've improved our telephone sales and services and reduced waiting time by half and the waiting time to buy tickets was reduced by 50 per cent last season.

When I lived in Hong Kong and Malaysia you really only got 90 minutes of football on digital TV on a Saturday evening but you didn't get a TV channel which reaches out to 100 million viewers. We're the only club to have made their TV channel free on SKY. Other clubs haven't done that but it's a really important tool for us to be able to communicate.

In terms of the match day experience we have a new food village on Anfield Road to better serve fans outside the ground, we have hawkers and vending machines, we've put draught beers on the concourses. You feel these things are small and should be there anyway but actually in the round, all of those things are focused on making the experience for the fans better. We'd never take our fans for granted and anyone who thinks we do is very much mistaken. Our commercial team - and it is a big team - are all focused on improvement. We've probably completed step one, there's a long way to go and we won't always get everything right, but it's about communication and continual improvement. It's a successful part of our business and hopefully it will continue to be so.

Author: Paul Eaton



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