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Chapter 18Chapter 18

Relationship MarketingRelationship Marketing

in the Business of Sportsin the Business of Sports

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

McGraw-Hill/Irwin

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Two Broad Marketing ObjectivesTwo Broad Marketing Objectives

• Attracting New Customers

• Retaining Existing Customers

– Customer Acquisition Can Be Costly

– Customer Retention Deemed Superior

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Customer RetentionCustomer 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

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Relationship MarketingRelationship 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)

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Benefits for the Sports MarketerBenefits for the Sports Marketer

• Customer Loyalty

• Facilitates Resolution of Complaints

• Sense of Belonging – Not Just a Buyer

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Benefits for the MarketerBenefits for the Marketerof a Spectator Sports Productof a Spectator Sports Product

• Drop in Box 18.2 Here

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Six Components of Six Components of Relationship MarketingRelationship Marketing

• Mutually Beneficial – Win-Win Partnership; Buyer & Seller Benefit

• Trust– Feeling that the Other Party Will be Honest

• Empathy– Understand Each Other’s Situation

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Six Components of Six Components of Relationship MarketingRelationship Marketing

• Communications– Interactive and Responsive

• Bonding– Strong Unified Commitment Viewed by the

Participants as a Partnership

• Continuity– Seek to Maintain a Long-Term Association

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Fan Bonding as Measured by Fan Bonding as Measured by Relative Relationship StrengthRelative 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 Fan Bonding as Measured by Relative Relationship StrengthRelationship 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 Twelve Applications of Relationship Marketing in SportsMarketing in Sports

• Drop in Box 18.4 Here

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Clubs (1)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)

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Serial Marketing (2)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)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)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 ProgramsAffinity Marketing Programs

• Drop in Figure 18.3 Here

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Routine Periodic Communications Routine Periodic Communications (One-Way) (5)(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

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Callaway Golf – Communications with Callaway Golf – Communications with Known BuyersKnown Buyers

• Drop in Figure 18.4 Here

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Interactive Opportunities (6)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

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Gifts (7)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)Fan Appreciation Activities (8)

• Spectator Sport Based

– Player Clinics

– Autograph Sessions

– Celebrations of Team Achievements

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Contests (9)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

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Logo Merchandise (10)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.

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Direct Access/Direct Access/Personal Representative (11)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)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

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Example in Spectator Sports:Example in Spectator Sports:NASCARNASCAR

• 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

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Example in SASS:Example in SASS:ReebokReebok

• 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 Evaluating the Effectiveness of a Relationship Marketing ProgramRelationship Marketing Program

• Track Sales

• Monitor Complaints

• Customer Satisfaction Surveys

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Evaluating the Effectiveness of a Evaluating the Effectiveness of a Relationship Marketing ProgramRelationship 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)

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Recovery MarketingRecovery 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

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Five Steps for Recovery MarketingFive Steps for Recovery Marketing

Drop in Box 18.7 Here

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Recovery Marketing by the NHLRecovery Marketing by the NHL

• Lost 2004-05 Season Due to CBA Issues

• Drop in Table 18.1 Here

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Closing CapsuleClosing 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

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Closing CapsuleClosing 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