McGraw-Hill/Irwin

Chapter 18

Relationship Marketing in the Business of Sports

Two Broad Marketing Objectives

• Attracting New Customers • Retaining Existing Customers – Customer Acquisition Can Be Costly – Customer Retention Deemed Superior 18-2

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 18-5

Benefits for the Marketer of a Spectator Sports Product • Drop in Box 18.2 Here 18-6

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 18-9

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 18-10

Twelve Applications of Relationship Marketing in Sports • Drop in Box 18.4 Here 18-11

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 18-13

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 18-14

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 18-15

Affinity Marketing Programs

• Drop in Figure 18.3 Here 18-16

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 18-18

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 18-20

Fan Appreciation Activities (8)

• Spectator Sport Based – Player Clinics – Autograph Sessions – Celebrations of Team Achievements 18-21

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 18-24

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 18-27

Evaluating the Effectiveness of a Relationship Marketing Program • Track Sales • Monitor Complaints • Customer Satisfaction Surveys 18-28

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 18-31

Recovery Marketing by the NHL

• Lost 2004-05 Season Due to CBA Issues • Drop in Table 18.1 Here 18-32

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