Monday, 3 November 2008
Understanding customers needs – The story of Viagogo
As we run into a brick wall of uncertainty in the world of entrepreneurship – I can remember the last time there was a kind of melt down. It had been caused by dangerous over-speculation on the web. I had been told – it’s not cash flow and customers – it’s about the number of clicks and eyeballs!
Well – 8 years later only a handful of companies have made money out of clicks – Google being a star examplar. In the end they too have to be measured by cash flows. What a relief for common sense.
So in the lecture by Eric Baker from Viagogo – a product of Harvard, Stanford, McKinsey, Bain Capital and Silicon Valley it was such a relief that there was so much common sense and a starting point that acknowledged “no customers = no business”.
Viagogo is an on-line ticket exchange business and charges 25% for its service. It holds no inventory of any kind and gets the cash upfront from the transactions. In other words the business makes a good margin and generates cash in providing affordable ways for people to exchange tickets.
So what is the marketing story.
1. Eric has a great personal background in terms of the education he has received. He also gained experience of this kind of business as an employee of Stubhub in USA.
2. He assembled a fabulous board of advisors. Not only is this a source of advice and route to money, but it provides excellent “brand association” by demonstrating the quality of the company he keeps. This helps to open doors, creates an illusion of size and provides huge levels of credibility.
3. Identifying the new trends. More and more people go online to buy tickets rather than queue in shops and at the venue itself. So the credibility of being able to exchange tickets online is established by the new market trends and behaviors.
4. There are an increasing number of other online exchange sites – such as eBay, so the format is easier to explain to consumers.
5. In addition to getting alongside well respected Board members, Eric did early deals with Soccer Clubs like Manchester United and Chelsea to be recognized as an efficient and “official” place for fans to exchange tickets, basically thereby undermining the touts who hang around outside stadia.
6. Eric was clear that his business solves a real problem for people who want to buy tickets. They want secure, reliable service where they know they can sell unwanted tickets and on the other side people want to be sure they are buying the genuine article and not being sold a counterfeit.
7. Below this level of strategic thinking about marketing Viagogo has all the internal disciplines and tactical marketing tools it uses to generate awareness about itself. This includes getting feedback from customers and making sure you stay close to their needs, adjust and adapt your services and products as you grow.
So the big question is why and how an American came to relocate to the UK to start and grow this business? Eric loves sport, learnt about the way this business operates and spotted the gap in Europe. He relocated to London and the rest is becoming history! He has chosen to be a Global entrepreneur and is chasing global dreams.