Chapter 18

Chapter 18

Relationship Marketing in the Business of Sports

McGraw-Hill/Irwin

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. 18-1

Two Broad Marketing Objectives • Attracting New Customers • Retaining Existing Customers – Customer Acquisition Can Be Costly – Customer Retention Deemed Superior

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Customer Retention • Basic Premise of Relationship Marketing • Seeking Long-Term Association • Cost of Customer Acquisition Estimated to be 6 Times that of the Cost of Taking the Steps Required to Keep an Existing Customer Satisfied 18-3

Relationship Marketing • An Integrated Effort to Identify, Maintain, and Build a Network with Individual Consumers and to Continuously Strengthen the Network for the Mutual Benefit of Both Parties through Interactive, Individualized and Value-Added Contracts Over a Long Period of Time • Focus on Lifetime Customer Value (LCV) 18-4

Benefits for the Sports Marketer • Customer Loyalty • Facilitates Resolution of Complaints • Sense of Belonging – Not Just a Buyer

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Benefits for the Marketer of a Spectator Sports Product • Drop in Box 18.2 Here

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Six Components of Relationship Marketing • Mutually Beneficial – Win-Win Partnership; Buyer & Seller Benefit

• Trust – Feeling that the Other Party Will be Honest

• Empathy – Understand Each Other’s Situation 18-7

Six Components of Relationship Marketing • Communications – Interactive and Responsive

• Bonding – Strong Unified Commitment Viewed by the Participants as a Partnership

• Continuity – Seek to Maintain a Long-Term Association 18-8

Fan Bonding as Measured by Relative Relationship Strength • The Core Relationship – Usage • Length of Relationship • Intensity of the Commitment • Frequency of Contact

– Fan Identification • Emotional Involvement • Personal Commitment • Loyalty

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Fan Bonding as Measured by Relative Relationship Strength • The Expanded Relationship – Responsiveness to Product Merchandising • Purchase of logo Merchandise

– Propensity to Engage in Word-of-Mouth Advertising • Talk About Recent Results • Talk About Future Competitions • Talk About Acquisition of New Players

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Twelve Applications of Relationship Marketing in Sports • Drop in Box 18.4 Here

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Clubs (1) • Spectator Sports – Fan Club – New Zealand Cricket Fraternity

• Participation Sports – Club for Players – PGA Tour Partners Club

• SASS – Club for Users of Particular Brand – Storm Chasers (Storm Bowling Balls) 18-12

Serial Marketing (2) • Spectator Sports – Giveaways – Require Regular Attendance for Complete Set

Drop in Figure 18.2 Here

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Frequency Incentives (3) • Spectator Sports – Frequent Attendance – English Rugby Football Union Smart Card

• Participation Sports – Frequent Play – 10-Pin Bowling: Play 6 Games; Get 1 Free

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Affinity Marketing Programs (4) • Spectator Sports – Credit Card That Benefits Both the Sports Property and the Fan – MBNA NASCAR RacePoints Visa Credit Card

• Participation Sports – Lifestyle-Based Credit Card – Ducks Unlimited MasterCard Credit Card

• SASS – Credit Card User Accrues “Points” – Bass Pro Shops Outdoor Rewards Visa Credit Card

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Affinity Marketing Programs • Drop in Figure 18.3 Here

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Routine Periodic Communications (One-Way) (5) • Traditional Print Media or E-Mail • Spectator Sports – Contacting Fans – Newsletter, Schedule, Promotions

• Participation Sports – Contacting Participants – e-mail Asking Marathon Runners to Register Online

• SASS – Magazines – Callaway Golf Magazine 18-17

Callaway Golf – Communications with Known Buyers • Drop in Figure 18.4 Here

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Interactive Opportunities (6) • Spectator Sports – Internet Chat Room – Dialog between Fans and Player

• Participation Sports – Real Time Results – Boston Marathon Participant Tracking

• SASS – Information and e-products – adidas.com downloads and store locator 18-19

Gifts (7) • Spectator Sports – Recognize Relationship – NFL Team’s Holiday Ornament for Season Ticket Buyers

• Participation Sports – Encourage Return – Golf Tournament that Provides Gift Pack for Players

• SASS – Reward for Past Use – Bowling Ball Company that Gives Special-Edition Ball to Recognize Perfect Game by Bowler Using Its Brand

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Fan Appreciation Activities (8) • Spectator Sport Based – Player Clinics – Autograph Sessions

– Celebrations of Team Achievements

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Contests (9) • Spectator Sports – Win Tickets – Future Game or Cross-Marketed Event

• Participation Sports – – Register On-Line; Chance to Waive Fees

• SASS – Win Products – Titleist.com: Win Year’s Supply of Golf Balls 18-22

Logo Merchandise (10) • Spectator Sports – Peripheral Product – Premiums that Incorporate Team Logo

• Participation Sports – Reward Performance – Bowler Receives Logo Jacket for 300 Game

• SASS – Support Core Product – Storm Bowling Balls Sell Shirts, Towels, etc. 18-23

Direct Access/ Personal Representative (11) • Spectator Sports – Ticket Representative – Assigned to Handle Season Ticket Accounts – Addresses Exchanges – Resolves Complaints – Addresses Renewal – Provides Constant Point of Contact Over Time

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Recognition (12) • Spectator Sports – PA Announcement – Birthday of a Season Ticket Holder

• Participation Sports – Acknowledgement – Tournament Web Site Identifies Bowlers Who Attain a Noteworthy Mark in Continuous Participation

• SASS – Identification on Website – Recognize Achievers Who Used the Marketer’s Product in a Noteworthy Performance 18-25

Example in Spectator Sports: NASCAR • • • • • • • •

Apartment Building by Lowe’s Speedway NASCAR Thunder Store NASCAR Café NASCAR Amusement Centers NASCAR Simulators Daytona USA Theme Park Pit Stop Challenge Simulate Role of Race Announcer 18-26

Example in SASS: Reebok • • • • • • •

Focus on Female Runner Target Market Focus on Smaller Retailers Emphasize Running Roots in Promotions Sponsor US Olympic Track & Field Team Grass Roots Sponsor of Running Events Newsletter Sent to Known Runners Seek Input from Retailers

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Evaluating the Effectiveness of a Relationship Marketing Program • Track Sales • Monitor Complaints • Customer Satisfaction Surveys

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Evaluating the Effectiveness of a Relationship Marketing Program • Monitor Internet Chat Rooms and Bulletin Boards (Buzz Manager) • Calculate Click-Through Rate (CTR) for Internet-Based Relationship Marketing Initiatives • Customer Relationship Management (CRM) Software (data mining) 18-29

Recovery Marketing • When Things Go Bad, How Do We Get the Customers to Come Back? • Formula 1 Racing in USA After 14 of the 20 Cars Entered Refused to Race because of Safety Concerns about Tires • NHL After a Cancelled Season 18-30

Five Steps for Recovery Marketing Drop in Box 18.7 Here

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Recovery Marketing by the NHL • Lost 2004-05 Season Due to CBA Issues • Drop in Table 18.1 Here

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Closing Capsule • Relationship Marketing Is All About Customer Retention • Key Issues Are Customer Satisfaction and Problem Resolution • Relationship Marketing Encompasses All Elements of a Marketing Strategy 18-33

Closing Capsule • Win-Win Environment • Focus Is on Lifetime Customer Value – In Other Words, a Long-Term Relationship • Despite Best Efforts, Things Go Wrong • Need to Understand Recovery Marketing 18-34