Most people see FIFA and the EAC as the “custodians of the game” and so get rightly outraged when these things happen. But nothing really changes. What seems to change things is when other people who also like making money would make less money if they let things continue.
Dramatic title, check. Now let’s see if I can back it up…
This summer has been too hot and too money grubbing.
If I was to name it in a personal sense, it’s the summer of not going outside. For the business world, it’s been the summer of “revenue”
Both the World Cup and now last week’s European Athletics Championships have both been hailed as great successes despite there being constant negative stories about the fact that the organisers of both put “revenue” over customer experience.
You’ll have noticed by now that I am putting the word revenue in quotes, that’s because both of the organisations in question, FIFA and the European Athletics Association, are technically not-for-profits, and so can’t possibly make a profit on an event. But what they can do is make a massive amount of money and then distribute it in a way the uppers of those organisations see fit, for their own, but seemingly no one else’s benefit.
How do non-profit’s make so much money?
In an actual sense, like this. The park and ride in Birmingham for the European Athletics Championships was £22. The Park and Walk (45 mins) was £17.50, the same price as a pork roll. For FIFA, they charged thousands for tickets, then thousands again on a resale market, taking a cut on both. Most people see FIFA and the EAC as the “custodians of the game” and so get rightly outraged when these things happen. But nothing really changes. What seems to change things is when other people who also like making money would make less money if they let things continue.
When FIFA president, and winner of the Thunderbirds Villain Lookalike Contest, Gianni Infantino said he was going to sell off 20% of the World Cup to investors, all of the other associations, who wouldn’t get a cut, and so fought back.
But, I hear you say, you’re a business consultant, surely money is the aim. Consistent growth at the expense of the consumer? Well, firstly, I am a Business and Charity Consultant, and the two organisations above are more akin to charities than businesses. They have a goals and missions and are non profits in their respective area. And one of my key tasks in a charity is to improve revenue, but not at the expense of reputation and social license – because they are what allows you in to places businesses can’t go.
Secondly, taking the maximum from the person in front of you is not the same thing as making money. It only looks identical for a while.
So here are three things worth keeping in your head when you’re making your own commercial decisions.
You’re holding something that isn’t yours
FIFA and the EAA get outrage rather than a shrug because people think of them as custodians. Nobody feels betrayed by the price of a Coke at the cinema, because nobody believes the cinema is holding anything in trust.
Most organisations have a bit of this, and it’s usually the bit they undervalue, because it has never once appeared on an invoice. The community centre that was there before you were born. The charity your customers’ parents donated to. The pub. You didn’t build any of that trust, you inherited it, and you can spend it in an afternoon at £22 a car.
You can charge it. The question is whether the person paying feels like a customer or a captive.
2. Contempt is a loan, and the repayment date isn’t on the schedule
The £22 adds to this year’s budget alone. What it costs gets spread over years. The family that doesn’t come back. The kid who never joins a club. The sponsor who doesn’t renew, because being attached to a rip off wasn’t what they thought they were buying.
Revenue is immediate and you can put a name on it. The damage is slow and anonymous. Any organisation will do the thing it can see a number .for. So if you’re about to trade goodwill for cash, fine, but do it knowingly. “We’re spending goodwill here” is a sentence that changes a meeting, and it costs nothing to say.
If you’re a non profit, your customer and your beneficiary are the same person
This is why FIFA are bad at their job.
FIFA exists to grow football. The person paying thousands for a ticket and then getting stiffed again on the resale is the person football is supposedly for. It’s a charity running a raffle for it’s own staff, and calling it fundraising.
Athletics and football needs children to see their thing in order to have anybody to put out there in twenty years. £22 to park can be seen as a participation decision, and was anyone from the “participation department” in the room when the decision was made?
So, do you ever ask what’s the point?
Ask “What’s the point of this?”, for the customer out loud at the next meeting where somebody’s presenting a revenue idea, and mean it as a question rather than an objection, because your organisation has an answer written down somewhere, and if it doesn’t, then you may have bigger problems. Just ask Gianni.
