Ticketek.com Fit for E-Commerce in 2003?

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Ticketek was the lucky first mover to establish the in the ticketing industry tremendously important contracts with venues and event promoters. As a cons equence Ticketek has been able to keep competitors well at arm’s length. Customers comfort and habit contributed to a market with monopolistic character, too. In 2003, however, where people have more leisure time and more money in their pockets than ever before, the next ticket agency is not located at the other end of the town but exactly one mouse click away! And if the customer experie nces more fun and an equal level of payment security and reliability at ticket company X’s Web page, he will ditch Ticketek.

In 2008, when there are no paper tickets but only digital tickets around, Ticketek can close down its 200 points of sale in New Zealand (About Ticketek) which will have become more of a handicap than a competitive advantage.

1.1 Objective

The objective of this report is to analyze Ticketek’s current eCommerce strategy and to give recommendations for improvements such as how to shift more customers form conventional channels to the online channel.

But it will also show that cost reduction and a better range to reach customers can’t be the only reasons for selling ticket’s online. This report’s second main goal is to make sensitive to the enormous possibilities the Internet offers to support customer relationship management, because market leaders of the future do customize each interaction with each customer. (Newell, 2000, p.262)

1.2 Outline

Before in the main chapter (5) the customer and business activities supported by the Internet are analysed in detail, a brief company profile is given (2), the current strategy and business goals (3), and the business model as well as processes are examined (4). Chapter six presents on overview over strength and weaknesses and closes with a critical success factor matrix. After a brief look at the eCommerce infrastructure in chapter seven, a conclusion is given in chapter eight.

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Ticketek sell tickets for a wide range of events including sports, concerts, musical and theatre. Ticketek is Australasia’s leading sports and entertainment ticketing service company. In New Zealand alone, yearly more than two million tickets have been sold. (About Ticketek) Ticketek was founded in 1979 and in May 1999 acquired and since then wholly owned by ecorp Ltd. Ticketek. (About Ticketek) Ticketek’s subsidiary Softix “develops, installs and supports entertainment ticketing software worldwide” (Softix).

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3.1 Business strategy

A concrete reason for existence or vision is not stated in the publicly available in-formation. However, Ticketek’s main focus is to consolidate its operations as Australia’s and New Zealand's leading ticketing company and to invest in deve loping its online capability to make the most of its eCommerce opportunities. (ecorp Ticketek) This simply means Ticketek strives to widen the customer base in order to i ncrease revenues and to diminish costs which finally results in maximized profits. The Internet presence is both part and main supporter of this strategy. First of all, it widens the potential customer base because it expands the market place from the physical agencies to every single person with access to the Internet. And secondly, it decreases costs because the physical selling points with its sales agents as well as call centres can be reduced to a great extent. (Turban, King, Lee, Warkentin & Chung, 2002, pp.25-27) The following figure gives an overview of the sales channels used to sell tickets to consumers.

Taking the cost efficiency aspect into account it is obvious that Ticketek wants to shift as much ticket sales transactions as possible to the Internet. Hence, fund amental to Ticketek’s success is their website’s ability to attract and convince customers to buy tickets online instead of doing it with cost intensive agencies or call centres. That is to say, Ticketek’s website must offer distinctive added values, conventional methods just cannot.

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3.2 Current goals and associated processes

The parent company ecorp specifies the following goals and methods for Ticketek.

Table 3-1 : Goals and methods, cited from (ecorp Ticketek more)

The three in Table 3-1 listed business processes and goals are all highly dependent on and intertwined with eCommerce. This is evidence that Ticketek, at least in theory, prove consistency between its business strategy, goals and business processes and that they recognize very well the importance of eCommerce for their development.

However, investigations disclosed that firstly, there are shortcomings in the practical implementation of eCommerce functionalities in the respective processes. The stated goals are not reached to a satisfying degree. And secondly, one recognizes that some fundamental goals are either missing or not stated. These una ccounted goals are among others: a) ‘deliver a superb service’ and b) ‘improve the customer relationship ’.

It is very likely that these missing goals are the cause for the eCommerce strategy coming a bit off the track. As a matter of fact, Ticketek is currently not able to use “innovative online marketing and sales techniques on a real time basis” (ecorp Ticketek more) as they might have had in mind because they are just not close enough to the ir customers. Referring to the goals stated by Ticketek, ‘consumers’ are only named in connection with cost reduction.

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In order to get an idea about what Ticketek is exactly doing, this chapter elaborates on the business model and gives an overview of the business processes from an eCommerce point of view.

4.1 Business model

According to their main activity, Ticketek’s business model incorporates three revenue streams.

Figure 4-1 : revenue streams, own figure (based on: ecorp Ticketek more)

As shown, beneath Ticketek there are at least three other parties to deal with. Ticketek is conducting business on a B2B (with venues and event promoters) and a B2C (with consumers) basis.

Key to Ticketek’s business success is finally based on two aspects. Firstly, the amount of consumers they can attract to buy tickets with them and how often each customer comes back. This affects also their bargaining power for making contracts with venues and event promoters. And secondly, their internal cost structure. Technology can be used as a very effective tool in order to improve both. The revenue model finally proved to be successful in 2002 when Ticketek reached the break even point (ecorp annual r eport 2002, p.9). Nevertheless, Ticketek should look out for further revenue streams to solidify its position. The future will bring far-reaching changes to the ticketing industry like e.g. digital tickets. Digital tickets, however, will dry up the revenues derived from the mailing and dispatching of tickets (revenue source no. 2).

Technology and eCommerce offer more opportunities than currently explored. Appendix chapter 9.7 offers some ideas for further revenue opportunities.

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4.2 Business process overview and eCommerce implementation

Table 4-1 lists Ticketek’s core business processes. Those discussed in chapter 3.2 are included or part of these listed here. It is also evaluated in brief to what extent each process is currently supported by eCommerce.

Table 4-1: business processes and eCommerce support

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It is recommended, that service and support of all kinds is given to the customer throughout his entire contact process with the company (Turban et al, 2002, pp.125-136). In an online environment this is especially important, because the merchant and the customer do not meet face to face (Turban et al, 2002, p.135). The lack of personal contact is one of the main barriers for Ticketek’s customers preventing them from buying tickets online.

In the following, we analyse the purchasing decision making process in combination with the product life cycle according to Turban et al (2002, pp.125-136). Improvement s are suggested with focus on B2C activities that do create a value in customer’s eyes and which make the end customer want to go online, stay online and buy a ticket. Online shopping needs to be fun!

Lots of the suggested improvements coming next rely on the assumption that Ticketek knows its customers and has build up customer profiles, which is the field of customer relationship management. Ticketek is very weak in CRM, though. Therefore, appendix chapter 9.1 elaborates on CRM itself and on how Ticketek can conduct CRM.

5.1 Need recognition and identification (stimulation)

Visiting a concert or a musical usually is for people not a matter of survival rather than pure entertainment which enriches their lives. Therefore consumers tend not to look actively for next events. Moreover tickets belong to a specific product / service category which usually do not create a feeling of loyalty in customers (see appendix 9.5). Consequently Ticketek should take on the active part and stimulate the consumers’ lust for entertainment.

If the customer is off-line this can be done by use of a push strategy. This comprises that Ticketek actively informs the customer via email or SMS about events he is really keen on (Turban et al, 2002, p.187). If it is not cost efficient to send e.g. SMS to all registered members, it is an easy thing for Ticketek to search their customer profiles for those who create most revenue.

If the customer is on-line , the webpage should be personalized to his preferences. American Airlines demonstrate that it is possible to generate personalized pages

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