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strategy and business
 / Autumn 2012 / Issue 68(originally published by Booz & Company)


Lessons from the E-Commerce Wars

For example, early in our business, we started sending out an e-mail to buyers after the event they purchased tickets for had happened, to see how it went. We were the first company I know of to do this. We wanted to make sure that people were having a good experience, and if there were problems, we wanted to get that feedback. It was a very simple innovation, but it was new and it helped us add value for the customer.

We have more complicated innovations, like our “Sit with Friends” feature. One of the issues people encounter when they want to go to an event with friends is that one person needs to buy all the tickets so the group can sit together. Otherwise there are no guarantees. We built “Sit with Friends” to solve that problem. If you buy a ticket from us, we provide a link at the end of the process that you can then send to friends. When those people buy tickets through that link, your seats are automatically grouped together. That was an innovation that came out of talking to our customers about their frustrations. For us, innovation is a constant process of saying, What are we doing to help improve the member experience?

S+B: You serve a diverse customer base. How do you get to know your members?
User reviews are one of the most important things that people do on our site. We did a study a couple of years back that basically asked, Would you trust user reviews on a website that you like, or the most well-known critic in the biggest newspaper in your city? And which source would you trust if they had a difference of opinion about a show? The result was something like 30 to 1 valued the reviews on a website they liked over the critic. Because you need to buy a ticket to write a review, users shouldn’t have to wonder, “Who’s writing this review? What’s their agenda?” We’re poring over the data on a daily basis, asking ourselves, What’s working, what’s not working, what are people experiencing that we can address? Every now and then I’ll go work in our customer service queue to connect with our customers directly.

We know that people like to go to live entertainment more than they actually go to live entertainment. The “science” behind what we do is figuring out why, and then trying to break down those barriers. One of the mistakes that many of our potential competitors make is thinking that price is the single barrier, when in reality it’s one of several (and not the most important). We use algorithmic solutions to take into account what events our members have looked at, what they’ve attended, and what they have said about these events. We analyze how they respond to e-mail, what kinds of offers work for them, what kind of information they are searching for. Their behavior begins to tell us more about them, and hopefully we’re adjusting with each new insight. People don’t always know what they like until they see it. There are some things they know they want, but there are other things they’re open to the discovery of. That’s what we try to find out.

There’s a meeting I have with every new employee that we call Goldstar 101. One of the things that I do is show them a picture of a Sony Xperia — a really sleek smartphone. And then I show them a Sony transistor radio from 1957, which looks crude and old-timey. The point I make is that Sony had a goal back then, which was to improve people’s lives through technology. And even though these devices are really different, they’re both still designed to achieve that same exact goal. If Sony tried to achieve that goal in 2012 with a transistor radio, it would be impossible. Being consistent with a strategy over a long period of time means the tactics have to constantly change to match where the world is.

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