Critical Lessons From Baseball Cards
Most baseball fans can recall growing up with Topps baseball cards with free bubble gum in every pack.
For decades—70 years to be exact—Topps owned the baseball card market. The company had an exclusive contract with Major League Baseball and the Major League Baseball Players Association.
A few weeks ago, Topps was blindsided when MLB and MLBPA announced a new exclusive contract with the online sports merchandise retailer Fanatics Inc.
As the Wall Street Journal reported, Fanatics was in negotiations for several months with MLB and MLBPA. Topps had more than four years left to go on their current contract. They were blindsided when they received a letter from the MLBPA informing them of their decision and a phone call from MLB to the CEO of Topps.
Not only did Topps lose its 70-year relationship, it also lost its imminent public offering valuing the company at more than $1 billion.
There are two big lessons here:
Lesson 1: Relationships are everything. It is clear that somehow Topps lost its relationships with both MLB and MLBPA. Their relationship and value had diminished to the point that they only received a letter and a phone call terminating a 70-year relationship.
Lesson 2: Client diversification is critical. Clearly MLB and MLBPA represented a significant amount of Topps sales, because when it lost these two customers it lost its valuation and pending IPO.
Critical questions for you: Are you conducting ongoing timely client reviews and other relationship building activities? Is (are) there any one or two customers that if you lost them could significantly reduce the value of your business and substantially change your lifestyle?