Slam Dunk
The National Basketball Association's New York Knicks are better than ever. Better at communicating with their fans, that is. Thanks to a recently launched turnkey CRM solution, Knicks management now knows which season ticket holders like which players, what kind of merchandise they buy, and where they buy it. It knows if the fans also like the New York Liberty--or the Los Angeles Lakers. Management is finally able to send out fully integrated email campaigns that don't overlap with other marketing efforts. And here's the really cool part for the Knicks: The NBA did all the work.
More specifically, Atique Shah, the former director of CRM/ERM for the NBA, and his team did the work. In September 2000 Shah was hired by the NBA to create a CRM architecture that would help the league build deeper, longer-lasting relationships with its fan base--and that could be used by any or all of the league's 29 teams. Although that task might have proved to be more daunting than sinking a three-pointer at the buzzer to win a game, Shah was up for the challenge.
"Our biggest challenge was to build a solution that could be used by the league, as well as the teams, respective of all aspects of legal, privacy, and data-sharing guidelines," Shah says. The need to input and respect data from different channels led Shah and his team to chose the E.piphany suite of applications for email marketing, list generation, and offer development. The multidimensional database gave the NBA the capability to respect different barriers while giving the teams the ability to log on, look at data, and generate lists for marketing. "We had to build something that could create multiple views of the customer, and determine how data is shared across multiple teams," Shah says. "We built a solution that could understand these complexities."
Getting buy-in--from both his bosses at the NBA and the individual teams--was another challenge. Prior to Shah's arrival there was no CRM strategy at the NBA, and elements of database marketing like direct mail campaigns were all outsourced. Through meetings and presentations to the NBA's executive management team, including Commissioner David Stern, Shah was able to show his bosses the value that a strategy like CRM could bring to the league.
One of the first things he did was build a loyalty index, presented in charts, to show NBA brass. "We're in an environment where fans are dying to touch the NBA, and if we take one step toward them, they'll take ten steps toward us," he says. "You have to be aggressive and present ideas and concepts, and show how something like this can effectively change the business processes and make them better. We had all this data that fans themselves had given us over a period of years, through online preferences, arena surveys...fans were telling us what kind of offers they were interested in. All we had to do was put the tools in place to leverage the information that fans had given us." The reaction from NBA executives? Shah laughs. "They said, 'OK. Let's do it.'"
Illustrating the Benefits to Build Buy-in
Getting the individual teams on board was a tougher sell. "Some people embraced it right off the bat, some already had CRM, and some didn't understand how it would work for them," Shah says. "My challenge was working with the team operations group within the NBA to bring all the teams on the same page, to understand that the days of sending out Dear Season-Ticket-Holder letters are gone--that they had to commit to one-to-one marketing." To get the teams onboard Shah again created presentations that demonstrated the ease of use of the tool, and what it could accomplish. Initially, just one team was interested in piggybacking on the NBA's CRM solution, but after six months and going live and proving the product was functional, 18 NBA and 14 WNBA teams signed had on. By this past May, when Shah left the NBA, that number was steadily growing.
"When we were making the decision [to join the NBA's CRM solution], it was based on the fact that it was the right thing for the Knicks to do," says Edward Soliman, director of database marketing for Madison Square Garden, the home of the Knicks. "But Atique has created a true CRM solution at the NBA that's very turnkey and advanced for the sports and entertainment community, where there's really a need to make efficient use of marketing campaigns, because sports and entertainment is discretionary spending. To be able to effectively campaign to [fans] in a way that you'll have a higher return is huge."
Back in the boom 1990s, when stadiums were full and discretionary income flowed freely, teams like the Knicks didn't need to worry so much about things like CRM. Fans flocked to games regardless of whether they received multiple, thus possibly annoying, mailings. But times have obviously changed, and target marketing has become a priority.
"When you contact your customers you have to be able to cater to their needs. And the value in a CRM solution is being able to cater to your customers' needs and not target them with offers that they have zero interest in," Soliman says. "The league will be able to tap into the wealth of data that the NBA can provide, while not overlapping their own efforts. They can target people who have shown interest in Knicks tickets and merchandise, then follow up and do more targeted marketing. It'll all be encompassed in one solution. It's uncharted territory, and the potential is limitless."
If Soliman sounds reverential about the NBA's CRM solution, he's equally devoted to Shah, describing him as both passionate and intuitive when it comes to CRM. "He knows what he's doing, and he sees the big picture," Soliman says. "Sometimes he gets so emotional and passionate that you almost have to take a step back."
Scoring for a New Team
Shah ultimately took his own step, but not back, and not from CRM. In May 2002 he left the NBA and moved to King of Prussia, PA--based GSI Commerce Inc. as vice president of CRM/marketing technology. At the 2002 NBA All-Star Game earlier this year, Shah had met Mark Reese, executive vice president and COO of GSI, a company that develops and operates online retailing and direct-response marketing businesses for retailers, manufacturers, media companies, and professional sports organizations. Atique was presented to Reese as a customer reference for E.piphany at a business lunch for the game. The two talked about similar interests, CRM concepts, techniques, and the strengths of a customer-driven strategy. Shah's office location at the NBA had changed seven months earlier, increasing his daily commute to two hours. After the lunch meeting Shah decided the time was right for a change. As he explains it, "One thing led to another."
Two years ago GSI was called Global Sports, and its customers were primarily sports companies. Today it counts corporations like Kmart, Palm, and Nickelodeon as clients, in addition to sporting concerns like the Atlanta Falcons and the LPGA. For Shah, joining GSI was a logical move that would give him an opportunity to extend his track record of building a common CRM infrastructure that could serve various entities. At GSI the CRM solution it offered to its partners and customers had to be able to work for every one of them, regardless of industry, and had to take into account each company's differing needs. At the NBA Shah's solution had to work for 29 entities; when Shah joined GSI, its number was 45--now it's up to 54.
GSI had already purchased the complete E.phipany E.6 suite of applications when Shah arrived, and was halfway through its implementation, but Shah quickly made his talents known. "In two days he found holes we'd missed and opportunities we hadn't thought about," Reese says. "He added immense value to the analytical thinking around how to implement CRM."
Such behavior is exactly what Reese expected when he recruited Shah. "I was looking for someone who could grasp the vision of what a CRM model could do," Reese says. "And when you're trying to create and build something from scratch, a certain amount of passion is required. My impression of Atique was, he is so passionate about the topic and genuinely loves being in the business right now. You don't always find the capability and the passion in one body."
Today, using the E.piphany suite's components as part of a phased implementation strategy, GSI is able to offer its clients first-rate customer service that uses data transferring in real time from various systems, both online and offline, and effective email communications with appropriate offers and valuable promotions.
Although GSI just went live with E.phipany just this past September, the return on investment is already evident. Using E.phipany Real Time on the Web site for Fogdog Sports, which GSI owns, GSI has been able to increase the conversion rate of visitors to registered users from one tenth of a percent to 2.2 percent. And some recent segmented email campaigns for another one of the company's Web sites, Ashford.com, have generated additional monthly revenues of 18 percent to 22 percent.
Shah's glee at this early success is almost childlike, and is ample evidence of the both the passion and skill that his colleagues rave about. "We're not in the millions--yet. But this is no magic, and there's no Gandalf here," he says. "Our core strength lies in using and understanding these tools, knowing what to challenge in our data sets, and having the ability to actually execute on key findings. Watch out CRM--here we come."
Erika Rasmusson is a New York--based freelance journalist.