Sports Marketing Chapter 8
Sports Marketing Chapter 8
Learning Outcomes
On completion of this chapter the reader should be able to:
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recall the key aspects of this book describe the current status of relationship marketing in sports explain the main issues professional sporting organisations have to consider in order to establish and maintain healthy relationships with their primary customers name some relationship marketing trends explain the challenges professional sporting organisations are likely to face in the future
OVERVIEW OF CHAPTER
In this nal chapter we will rst look back at the previous seven chapters and summarise their key aspects. We have also incorporated three brief Todo-lists with regard to fan relations, sponsor relations and media relations in order to emphasise the most important steps for professional sporting organisations again. Furthermore, this chapter brings together the individual relationship marketing approaches aimed at the various stakeholders of sporting organisations as presented in the preceding chapters and ultimately presents a holistic approach which already works in practice. With regard to the future perspectives of relationship marketing in sports we will look at general trends in relationship marketing rst. Then we will identify the main trends and challenges of relationship marketing in the context of sports and
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provide our vision of how relationship marketing in sports will develop over the next years. Finally we will have a look at Gary Smith again and see what the Marketing Director of our ctional football club has learned from this book and how he turned his newly gained knowledge into a strategic relationship marketing programme at Nowhere FC.
INTRODUCTION
In the previous seven chapters we have learned how relationship marketing can be applied to the eld of sports these days. We have presented various practical examples from the past and the present. Besides looking at the current status of relationship marketing in sports we also want to take this nal chapter as an opportunity to look ahead by addressing the main trends and challenges of relationship marketing in the context of sports. It would be great to have a crystal ball which tells us the future, but unfortunately we dont have one. Therefore we base our predictions on general trends in relationship marketing on the one hand and on our intuition as sports marketing academics and practitioners on the other hand. Although we will try to be as realistic as possible we will also try to be visionary because visions shape our future and the success of sports is partly based on the right vision. However, only history - and hopefully many future studies by fellow academics - will tell whether we had the right vision for relationship marketing in sports.
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In Chapter 2 we introduced the principles of relationship marketing and explained the basic concepts and theories of relationship marketing in general. We have also described the shift from a transactional marketing approach to relationship marketing and explained the key variables for relationship success. Furthermore, we proposed our own denition of relationship marketing in sports (i.e. the establishment and maintenance of positive, enduring and mutual benecial relations between professional sporting organisations and their stakeholders) and subsequently highlighted the benets that may be associated with the adoption and implementation of a relationship marketing approach within a professional sporting organisation. Finally, we have shown that the implementation of sophisticated marketing strategies is an absolute precondition for any sporting organisation in order to be able to compete not only with other sporting organisations but also with the large variety of leisure time activity offers. Chapter 3 rst introduced the business of sports as the context in which professional sporting organisations operate. We concluded that the sports business can be seen as an independent and very serious business, in terms of income and number of employees. We also emphasised the unique characteristics of the sports industry (e.g. the uncertainty of outcome, the attitude towards prots and the extraordinary public perception) and highlighted the need for marketing people to take these specic characteristics into consideration when dealing with sports. We then introduced the main stakeholders of the sports business and subsequently identied fans, sponsors and the media as primary customers of any professional sporting organisation on the one hand. On the other hand we dened other stakeholders such as suppliers, agencies and the sports entities employees as secondary customers of professional sporting organisations. The key message of this chapter was that sports clubs, associations and teams have to deal with many different customer groups and therefore with many different relationships. The professional application of relationship marketing therefore seems to be the logical consequence for any sporting organisation, in order to make and keep the primary and secondary customers happy. In Chapter 4 we have focused on the relationship between professional sporting organisations and their fans whom we dened as anyone who is emotionally attached to a specic sport, club or team. Therefore, the term fan involves not only supporters attending games but also people watching games on television or the internet. When dealing with fans professional sporting organisations face various challenges, bearing in mind that fans are a heterogeneous group of people with different backgrounds, motives and needs who need to be targeted and treated differently. In the course of the
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chapter we provided a number of examples as how sports entities can apply relationship marketing techniques to fans and how they can establish and maintain a good relationship with their supporters. To-do-list1 summarises the key points for professional sporting organisations with regard to fan relations.
To-Do-List 8.1
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Segment your fan base into useful segments (e.g. kids, die-hard supporters, regular spectators, once-a-season ticker buyer) using demographic, sociocultural and psychographic factors. Find out about the needs and wishes of your fans base through consumer and market research (e.g. fan satisfaction surveys). Be creative in what you offer your fan base. Supporters have a good sense when it comes to differentiating original ideas from bad copies. Provide value-added offers tailored to the specic customer segments, but do not exploit your fan base. Always keep in mind that fans might be loyal but that their loyalty is not a blind one. Solve problems with fans by consulting them personally, but drive a zero-tolerance policy when it comes to troublemakers such as hooligans. Establish loyalty programmes such as member schemes or kids clubs to reward and encourage the loyalty of your fan base.
Chapter 5 dealt with the relationship between professional sporting organisations and their sponsors. First we introduced the nature of sports sponsorship before we explained the importance of sponsors for sport clubs, associations and teams. The relationship itself was examined from both the sponsors and the sponsees perspectives and potential areas of conict, where identied. We also incorporated recent research on the concept of relationship quality in the sponsorship dyad and thus identied a number of variables which are likely to make the relationship a success (e.g. trust, mutual understanding, long-term perspective, communication, and cooperation). Finally we provided numerous examples and suggestions for sporting organisations to establish and maintain healthy relationships with their sponsors. In To-do-list2 we have summarised the main steps which help professional sporting organisations to build and maintain a healthy relationship with their sponsors.
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Find out as much as you can from potential sponsors and the businesses they operate in. Your insight knowledge might not only impress the sponsor in question but also shows that you try to understand the other side. Find out what the sponsor tries to achieve with the sponsorship of your sporting organisation and try to nd ways in order to help the sponsor achieving those objectives. Be committed to the sponsorship and do not risk a long-term partnership just because a competitor of the sponsor leads you in temptation with a better offer. However, if there is an offer you cannot possibly deny, talk to your long-term sponsor in an open and frank way about it. Conduct negotiations openly and sincerely. Do not make any promises you cannot possibly keep. Be realistic about what you can offer or not. Try everything to keep to the promises you made. Do more than what is expected from you or what is stated in the contract. Implement and establish regular get-togethers with your sponsors, e.g. workshops with representatives of your sponsorship partners in order to improve the sponsorships together. Remember that a leisure programme should always be a part of such workshops in order to give your sponsors the opportunity for bonding and networking in a more relaxing atmosphere.
Chapter 6 looked at the relationship between professional sporting organisations and the media, which is mainly characterised by interdependence. The simple rule in this relationship is: sports needs the media and the media needs sport. Therefore both parties are well-advised to aim for a healthy relationship. In this respect, relationship marketing offers a number of concepts and techniques which should be applied by sports clubs and associations. In To-dolist 3 the key points with regard to media relations are summarised for professional sporting organisations.
In order to deal with the media in a professional manner you should have a dedicated team of people taking care of media relations. Always provide the best possible working conditions for the media at your events. The provision of a specic media section with state-of-the-art
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technology at the venue is a clear must for any professional sporting organisation.
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Response to media enquiries immediately and ensure an effective ow of information. However, if a media request cannot be met explain your reasons for it. Design and establish a media relation policy involving rules and regulations for a better and more effective cooperation between your organisation and the media. It might be a good idea to involve media representatives in designing such a policy. Point out the importance of healthy media relations to your staff, especially the players and managers of your team. Being available for the media nowadays is part of their job. Whenever needed organise media trainings for them. Establish regular meetings with the media in different settings and for different purposes (e.g. press conferences before and after games, background information meetings in a private setting with selected journalists). Try to establish a private but also professional relationship with journalists and engage them in unique events (e.g. a game between the sports entitys managerial staff and the representatives of the media at the respective sporting venue). However, the implementation of relationship marketing techniques comes with a warning note because some journalist or editors could perceive well-intentioned approaches (such as invitations to away games) as some kind of bribery. Indeed, journalists need to remain objective in their coverage and therefore should not be inuenced strongly by sporting organisations.
In Chapter 7 we explained how the marketing mix might be used in a relationship marketing approach and in the context of sports marketing. We strongly believe that the extended marketing mix (i.e. the 7Ps) should be used as a tool to stimulate relationship marketing thinking in a professional sporting organisation. We thereby concluded that a well blended mix of the three service elements in addition to the general four marketing mix instruments is essential to achieve the goals of relationship marketing. However, we also emphasised the challenge for sports marketers to picture a consistent view of all elements on the one hand and to determine where to invest the limited resources to create the best outcome on the other hand. In the course of the chapter we also provided a range of examples as how sports entities can apply the various marketing instruments in combination with a relationship marketing approach and thus make and keep their customers happy. All the previous chapters have more or less focused on specic elements of relationship marketing in sports. In this nal chapter we are now
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presenting a holistic approach which considers all relevant customer groups and brings together individual elements.
C A S E S T U D Y 8 . 1 . Ta i l o r m a d e C R M S o l u t i o n s f o r P r o f e s s i o n a l Sporting Organisations
ller and Hartmut Voss Martin Lochmu
Sports clubs need more than sporting success to be successful in the long run. The professional handling with sponsors, members, fans and the media is becoming more important. Therefore professional sporting organisations need a minimum of human resources who are not only interested in sports, but who also have a good business understanding. They should consider sponsors, fans, members and the media as real customers and need to use new technologies and media for the clubs success. On the other side, sports entities need systems which can represent every process in a sports club. They should be easily understood, easy to handle and should offer the best communication possibilities for different groups of customers. Normally, most clubs have persons who meet the demands mentioned above. In the periphery of nearly each club there are many persons who are extremely interested in working for their preferred club. In addition, many graduates from degree programs like sports marketing, sports economy and sports management are looking for these types of jobs. They have a qualied education and are highly skilled. The administrative managements rst task is to engage such high potentials. The second aspect is more difcult to fulll. In spite of intensive research during the last 3 years, the authors could not nd a system which allows for the various demands of sports clubs. Indeed there are a lot of rst class CRM systems, but these systems generally neither know memberships, fan clubs, sponsors, ticketing systems, catering areas
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nor VIP lounges. But these aspects are relevant for professional sporting organisations.
Combining a state-of-the-art CRM tool with soccer club specic needs VMC Sports
The most important point of efcient customer service is a central database. Normally sports clubs use a minglemangle of different systems of databases which dont match and cannot communicate with each other. In addition, various persons apply and maintain them or members of staff have to keep up with customer information in different Excel sheets. In fan shops it is seldom known if a buyer is member of the club. Season tickets are maintained in other databases than day tickets, and newsletter subscribers are known only as an e-mail-address but not as individuals. Another problem is that many addresses exist twice or even more often. Furthermore, information about staff members from sponsors or the media exists rudimentarily or not at all. Overlapping contents between the involved target groups are hidden. The data situation of most sports entities is shown schematically in the following diagram.
The solution to the above mentioned problems is presented by Voss Management Consulting which extended a repeatedly prizewinning CRM-software for medium-sized enterprises with functions allowing to represent each target group in a database and which masters the specic requirements of these segments in the sports business. Technically, data management is based on a Microsoft SQL or Oracle database system. A central data archive allows access for every authorized user from each workstation. Further important features are, to a large extent, free customising to individual requests as well as the possibility to exchange data via interfaces between other systems like inventory management, ticketing or accounting. Integrated ofce applications and e-mail clients facilitate not only standard letters, but also offer individualised serial-emails. Due to CTI (Computer Telephony Integration) every phone call can be recorded. This guarantees a complete verication of all customer contacts (members, fans, sponsors, media, etc.). The unique aspect about VMC Sports is that in comparison to other CRM systems VMC Sports is fairly priced, easy to learn and to handle and can be customised
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as well as sponsors and media representatives can be performed individually and always traceable. At the same time all members of staff have easy access to updated information and personalised addresses are prepared quickly and economically. In addition, cross- and up-selling-potentials can be realized easily. The rst German football champion 1. FC Lokomotive Leipzig has been convinced by all these arguments and has established VMC Sports in their organisation. Lokomotive Leipzig as one of the most traditional clubs in German football has about 1.600 members and ranks among the top 100 clubs in Germany concerning attendance. Because of some nancial problems in the past, the club has decided to develop an efcient administration infrastructure in order to utilize the enormous potential of fans and sponsors in a better way. Lok Leipzig intended to achieve the following primary aims by the installation of VMC Sports:
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Traceability of all contacts with members using the customer le CTI-support and scan-to-PDF system in order to scan applications for membership and link them with the address using the document port Access to members for all ofce staff members and all trainers Prevention of data duplication Review of all information concerning sponsors contracts More efciency in administration of season tickets
Increase efciency in the administration of members by automated booking of membership fees (signicant economy of time)
Katrin Pahlhorn, treasurer of Lok Leipzig, stated: For a long time we have been in search for a system which could help us to improve activities in ofce and, at the same time, serve all fans, members and sponsors in a more efcient way. Now we gather all club information in one central data base and all authorized members of staff can access. Hereby we are enabled to help fans and fan clubs faster, to inform members in a better and more updated way and to advise our sponsors more competently. The system also facilitates the teamwork
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with media enormously and different, otherwise time-killing jobs (e.g. messages for associations) can be done automatically thus the members of staff have more time left to serve fans, members and sponsors much better. Step by step Lokomotive Leipzig intended to link the merchandise management system of the fan shop in order to achieve better information of all former buying decisions and to increase sales using target-group specic activities. Furthermore, the club thinks about introducing a bonus system in order to increase the number of members and, closely connected, also membership fees and incomes of provisions. The example of Lok Leipzig shows the opportunities linked to the implementation of a professional customer
management in a midsize sports club even with limited nancial resources. Clubs which are prepared to create professional structures in administration and to develop individualised and target-group specic activities for serving fans, members, sponsors and the media will be more competitive in the future. Dr. Hartmut Voss is the founder and owner of Voss Management Consulting (a German based consultancy with special focus on strategic marketing, international ller marketing and relationship marketing), Martin Lochmu works as a CRM Consultant for VMC.
Now that we have looked at the previous chapters and summarised the status quo of relationship marketing in sports we can focus on the future. What are the general trends and challenges and where are the main opportunities and threats for sports marketers in the future? On the following pages we will aim for some answers.
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towards relationship-oriented marketing still goes on, marketing develops further and new marketing trends are emerging. As a consequence, companies in general and professional sporting organisations specically have to face new challenges in the near future. In the following we will name and describe ve trends we think will be crucial both in general marketing as well as in sports marketing.
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the partnership a success, sporting organisations need to do more than just bringing their brands together. They need to design and offer creative and useful products for their fans. Furthermore, they need to generate business for each other (e.g. by introducing potential sponsors or investors).
Conclusions
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cultural differences in the rst place. However, they should also be able to apply different marketing approaches to different cultural markets.
CONCLUSIONS
Relationship marketing in sports is not only a very interesting topic but also an area which develops further and further. Professional sporting organisations need to keep up-to-date with developments in order to be able to successfully adapt general relationship marketing trends to their specic context and needs. We are strongly convinced that the successful management of relationships as well as the useful application of relationship marketing techniques will contribute to the overall success of any sporting organisation. In contrast, sports properties which neglect the importance of
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healthy relationships and/or are not able to implement a systematic relationship management programme will nd it more difcult to stay competitive in the business of sports. We therefore hope that this book has provided professional sporting organisations with the necessary basic concepts of relationship marketing on the one hand and that it has generated a lot of new ideas on the other hand. We are looking forward to the further development of relationship marketing in general as well as in the context of sports. And we will keep our eyes open for new and innovative ideas in the eld of sports marketing as long as it remains our passion and profession.
DISCUSSION QUESTIONS
(1) How would you describe the status quo of relationship marketing in sports? (2) How can professional sporting organisations establish and maintain healthy relationships with their fans, sponsors and the media? (3) Explain the main aspects of a holistic CRM programme such as the one by Voss Management Consulting. (4) Which of the ve general relationship marketing trends presented in this chapter is the most important one from your point of view? (5) What are the main challenges professional sporting organisations have to face in the future? (6) How will relationship marketing develop in the context of sports? (7) What exactly have you learned from this book?
GUIDED READING
For further reading we would like to recommend an empirical paper called The Past, Present and Future of Relationship Marketing by Michael John Harkern and John Egan. The paper, which has been published in the Journal of Marketing Management in 2006, concludes that relationship marketing is here to stay, whether or not it is recognised as the dominant logic/paradigm of marketing.
WEBSITES
Voss Management Consulting http://www.voss-mc.de
Websites
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