What happens when a brand breaks the trust of its customers?
And what if the trust is broken after the brand is already in financial trouble of major league proportions?
The New York Mets were ranked by Forbes magazine as the 3rd most valuable franchise in Major League baseball in 2010, at $858 million. The team had a high value, and its fans had high expectations.
Expectations were high, because the Mets ownership, Fred Wilpon and Saul Katz signed several high-priced free agents in hopes of bringing a pennant to the fans. But at the end of the 2010 season, there was no pennant – only a high payroll, and high disappointment for the loyal fans for the second consecutive year.
When customer expectations are missed, customer loyalty declines. And so does revenue.
Ticket sales in 2010 were 600,000 fewer than 2009 after a two back-to-back disappointing finishes by the team. According to an article in Sunday’s New York Times, “advance ticket sales for the 2011 season were going so poorly that a sense of panic had begun to take hold in the team’s front office.”
Poor play on the field had caused declining fan loyalty, and declining revenue. But this is just the beginning of the customer loyalty problems for the Mets.
While Wilpon and Katz were investing in free agents, they were also investing in Bernie Madoff’s Ponzi scheme. A January article in the Times reported that the Mets ownership profited $300 million through Madoff. Worse, though, are the allegations that Wilpon and Katz ignored, or failed to heed “red flags” about the suspect nature of Madoff’s operation. I suppose it’s easy to ignore red flags, when that “ignorance” is earning $300 million.
When the Mets lose ballgames, it’s a matter of the product not living up to the customers’ expectations. But how will customers respond, when a more fundamental trust is broken? A trust above and beyond the core product, itself?
Even if the Mets can figure out how to win again, will the team ever be able to win back the loyalty of their fans, as long as Wilpon and Katz own the team?
What do you think?