Posts Tagged ‘Ritz-Carlton’

“IF I WERE…MICHAEL RAPINO

December 1, 2008

You can call me a sucker.  I bought Live Nation stock when it was at $20.  Friday it was trading at $4.89.  So why when Live Nation CEO, Michael Rapino had just announced that the company’s third quarter numbers were up significantly over 2007 would the stock price actually slip?  If you were to take out the sale of Live Nation’s motor sports division to Feld Entertainment, they were still up.  So why did the stock fall, and what can our friend Michael do to restore confidence on Wall Street?

In talking to friends who have also looked at the numbers, Wall Street just doesn’t seem to believe in Live Nation’s business model as it currently stands.  Their margins are just too small for analysts, investors, and if you own your own business, probably you too.  When Michael Rapino first took over as CEO of Live Nation, he spoke in public about the consumer’s “value proposition”.  Michael told us at conferences about his plans to make the “amphitheater experience” better.  He talked about food selection, price, the potential of taking out ARAMARK, etc.  Then what happened?  The realities of running a public company, quarterly numbers, and the like must have set-in.   That customer experience stuff was not heard about again.  Instead Live Nation’s message shifted to branding (Live Nation, Artist Nation, Fan Nation, House of Blues, Fillmore, etc), an international platform for brands to reach consumers (e.g. the Citi deal), and deals with Madonna, U2, and of course Carrot Top (just seeing if you were paying attention).  Brands, bands, and fans you might say.  Problem is the fans are last in this equation.  Now you add the Ticketmaster Entertainment scenario in there just for shits and giggles and it really becomes a migraine for Michael.

We will stay away from the Ticketmaster in this letter and just focus on Live Nation and Michael.  Starting with Jack Welch?  Well, Jack may be a business leader from the past, but his brave steps to form GE Capital and move General Electric away from less profitable businesses the company was known for such as small appliances (toasters, can openers, etc) make for a good example of what Michael and company need to do.  Live Nation needs to show Wall Street a plan and a leader that will get the company to the goal line.  So without further B.S., here are some of the things I would do…”If I were Michael Rapino”

·     HIRE SOMEONE FROM DISNEY PARKS TO RUN VENUE OPS – There needs to be a complete overhaul of everything (employee training, venue maintenance, F&B, VIP programs, ticketing, parking, security, transportation, etc).

·     BRING IN A CMO FROM A FORTUNE 500 COMPANY – Certainly Live Nation has its share of marketing pros to count on (Jim’s from the East, Brad in the West, Lulu in Texas, etc), but what our business needs is are marketers that are used to dealing with big ad agencies, big brands, big budgets, and have worked for publicly traded companies.

·     HIRE A CUSTOMER SERVICE CZAR – Disney, Ritz Carlton, Nordstrom, and other customer service culture oriented companies are great places to look.  Live Nation should stand for customer service.

·     TICKETING, OK I’M BREAKING MY PROMISE – Live Nation’s new ticketing system should bring them greater revenues from ticketing… in theory.  But with Ticketmaster Entertainment now owning a management company that supplies so much talent to Live Nation venues, Live Nation’s ticketing is looking much more complicated.  As stated in earlier LiveWorks Newsletters, Irving Azoff is an artist manager first and foremost.  So as an example, both Irving and his partner Howard Kaufman know that their client Jimmy Buffett is probably better suited to play outdoors.  The company Irving now runs makes out better (at first look anyway) if Buffett plays indoors.  Will Buffett play the amphitheaters next summer?  If he does, where do you think all the extra ticketing money Live Nation might be making on their new deal will be going???  Do you think ticket surcharges are going to go down?  Is it too late to talk to Irving about getting Barry Diller to buy LN out of their ticketing commitment???  Just asking.

·     MARKET THE EXPERIENCE – Maybe I sound like a broken record, but in this case LN has something special.  I believe strongly in the amphitheater experience… at least the old one.  Yes, for acts that carry huge productions, they may not be the best places to play.  But for the fan experience, when done right, there is noting like seeing a concert outdoors.  Just ask a Buffett, Dave Matthews, Grateful Dead, Tom Petty, James Taylor, Warped Tour, or any other artists’ fan that has frequented the “sheds” over the years.  Same can be said for many Live Nation clubs.  Have your newly hired CMO come up with some kick-ass marketing that reminds fans how much fun it is to be at a concert with your friends, family, etc.  It brings people together.  Gives them something to share.  That’s why fans buy the event shirt.  So they can show all their friends they were there.

·     FORBID PAPERING – Papering a show (giving away free tickets for gig that doesn’t sell) or selling-off lawn tickets for $10 after the show goes on-sale should not be allowed at any Live Nation show.  As Gene Simmons put it in his Keynote at the Billboard Touring Conference, “it is like letting the fox into the hen house” (can’t believe I just quoted Gene).   Fans find out about these things real fast, and the ones that paid full-price this time will wait for the free tickets or the fire sale the next time the act is through.

·     HIRE A CHIEF TECH OFFICER – This isn’t an IT guy.  This is someone like Joe Rospars.  Joe ran the tech side of Obama’s campaign, while the company he founded with his partners, Blue State Digital was responsible for the online fundraising.  Live Nation needs someone that can speak to music fans and figure out a way get those fans to help make new ones.  Fact is, in 2003 when Ann Marie Wilkins called me to contribute to Obama’s Senate run in Illinois, I had never heard of him.  He is now President Elect of the United States.  In early 2007, most Americans still hadn’t heard of our new President.  Guys like Joe can do a lot for our business.

·     BUY METROPOLITAN AND JAM – I know they certainly don’t want to sell to you and you may not want to buy them, but John, Jerry and Arny are all legends in our business with great relationships your people don’t necessarily have.  Do you really need one more competitor in markets that has seen nothing but turbulence?  Imagine the artists you could potentially promote in NY and Chicago with those guys on your side.  This seems like a no brainer to me…other than getting them to do it.

·     GO ON A ROAD SHOW – All of the above cost money and in the short term, earnings will suffer.  This could be hard for investors and analysts alike to swallow but you must remain strong.  Put a plan into place and then go out on the road and sell it to your entire staff, local “town hall meetings” and finally, Wall Street.  But don’t just go to NY.  Speak with analysts, traders, and business leaders in every community you do business in.  Let consumers see a face to Live Nation.

·     PRICES – We all know that on top of tickets, the prices for concessions, parking and merchandise are just too high.  With that said, it is funny that an act will make a comment on stage about the price of a beer, popcorn, or parking at a Live Nation venue but won’t say a word about those same prices (or even higher) in the arena.  Why is this?  In many cases, the fans feel ripped-off, and the bands feel they are being ripped-off.  This is a huge perception problem.  The answer is probably going to have to be a combination of dropping your prices to increase volume and positive PR in the short term.  Long range, we need to work on the “value proposition” because for whatever reason, our fans seem to have a problem with the $8 parking at your venue while football fans pay at least twice that and don’t seem to complain.

We have probably covered enough.  Again, my disclaimer is that I’m a Monday morning quarterback.  I don’t have to sit in Michael’s shoes everyday.  But I do feel that Jack Welch’s example is a good one here.  If you are really in this for the long term Michael, some of what is written above just might make sense to you.  To bring the live business back to health we need to think less about gross and more about number of tickets sold.  In the long run, getting more fans through the doors to experience live entertainment is the only way to win.  The concept of fewer bodies at a higher ticket price can only work for some acts and for so long.

Talk with you soon…

Jim

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Customer Service Please…

November 4, 2008

Have you been to one of your events as a consumer, guest, fan, or whatever you call your customers lately?  Or someone else’s event?  No parking pass, no connections, no backstage catering.  If you haven’t, please do it today.  You will see that we can all do a lot better on “Customer Service”. 

With the plethora of entertainment options the “live” business competes with in consumer’s homes alone, we better be doing everything possible to retain the customers we have and build on that.  It starts and ends with the customer experience and now more than ever, every touch point counts.  Here are some suggestions (in no particular order) to help with your customer service. 

1) Look at the whole of your business.  Is customer service built into your culture?  Good place to start.

2) Have a great website to direct your customers and employees.  Update information on your site often.

3) Work with customers you already have and speak directly to them.  Ask for feedback and then act on it.

4) Be “authentic” in everything you do.  Go the extra step…and then another one.

5) Mimic what others do.  Look at those who you believe have stellar customer service and try and follow their best practices (e.g. Disney, Nordstrom, etc).  See if you can get a hold of their Customer Service or Employee manuals.  You can also try outside training.  Here’s one I can recommend.  http://www.disneyinstitute.com/custom.cfm

6) Speaking of manuals, have a manual for doing everything…even answering the phone.  OK maybe not a whole manual on answering the phone, but it should be in a manual somewhere.

7) And speaking of answering the phones, be “Welcoming”.  Look at every place your customer touches your brand and vice-versa and make sure there is a smile attached.  This welcome could be your entrance, website, phone operators, parking lot attendants (talk about front-lines…you really need to go talk to your parking people as they need training), box office, even the ticket to the event itself, which can now be paperless. 

8) Be hands-on.  You can’t learn anything sitting in an office reading reports.  Get out there and talk with your customers.  Any of you in the concert business that were around when Bill Graham was a promoter always saw him wandering around, talking with the audience.  Getting feedback.  Sometimes throwing people out of shows and sometimes sneaking them in without a ticket.  Bill actually built a community and made “Bill Graham Presents” mean something to fans. 

9) Let guests know about any problems or changes right away.  The customer likes to be in control as we all do.  Think about that time you were sitting in that 767 on the tar mac for hours and the pilots weren’t telling you what was going on.  The real stress was not knowing.  Let them know. 

10) CAN WE PLEASE CHANGE OUR MERCHANDISE SELLING EXPERIENCE AT OUR SHOWS AND EVENTS???  Please go to an Apple or Lego store.  Take in the whole experience.  Note the word experience, not t-shirts and colored lights on a board with handwritten prices attached.  All part of customer service. 

11) Security and customer service should go hand-in-hand.  Visit a new airport terminal and see how they are being built.  Take that into consideration when planing your next venue or show environment.  Don’t use the TSA training manual, of course. 

12) Keep it really simple if possible.  Fans of In-N-Out Burger out here in the west go there because it is such a simple menu and promise (burgers, fries, and shakes, all fresh).  You should be able to make your customer service that simple.

13) Pick the right people and train them properly.  You might want to think about picking the right customers too.  For instance, when you tour the amphitheaters and ask the staff what shows they hate working the most, they usually say “Jimmy Buffett, because everybody thinks they are a somebody…and they are really drunk.”  Sometimes you may want that customer, sometimes not.

14) Empower your front-line employees.  Ritz-Carlton gives desk clerks, attendants, bell staff, etc, up to $2000 to fix a customer complaint (not sure where I heard that but need to give credit to someone).  What happens at your venue when a customer isn’t happy with their hot dog?  Have you spoken with the staff at your concession stands lately?

15) Re-think everything.  There is no reason “entrance ques” need to look the same in every venue.  Why not put more shows on-sale on Tuesdays (plane fares are cheaper on Tuesdays and Thursdays which means fewer people are traveling…there has to be something to that)?  Do you have a customer service director at your talent agency (might be a good idea to take care of the “bottom 1/3 of your roster)? 

As always, would love your feedback.

Talk to you soon…

Jim