Market Focus: Sports and Entertainment -- CRM Scores for Sports Franchises
When it comes to managing relationships with customers, many sports organizations are looking at third and long. Two out and nobody on. An overpowering Soviet-era gymnastics team and a biased East German judge. (You get the idea.)
Despite the size, scope, and revenue involved in both professional and amateur sports markets, franchises operate like midsized businesses, and they've traditionally made similar-sized investments -- and similar missteps -- in the management of customer relationships, says Paul Greenberg, president of The 56 Group. Also like their midmarket brethren, franchises have only just begun to learn the importance of extending their brands and experiences beyond the hollowed halls of America's oldest stadiums.
"The industry is worth billions of dollars," Greenberg says. "We're not just dealing with fans filling seats. There are products, TV contracts--and all of this is part of CRM initiatives."
Until recently, franchises have used CRM products mostly for basic outreach to keep fans informed of promotions, schedules, and team events (email distribution, ticketholder customer databases, and fan clubs and loyalty programs). But it's crucial that teams establish a two-way relationship with their fan bases to receive feedback and input.
"It's important that franchises pay attention to their fan base to uncover patterns such as purchasing habits," says Chris Forrest, customer service coordinator for the WNBA's L.A. Sparks. "With that sort of information, franchises can start offering their fans more relevant promotions, expanding their fan base at the same time."
These basic best practices are now being extended to franchises' third-party networks. The perfect example is Ticketmaster, a unit of IAC/InterActiveCorp. "By integrating their data with Ticketmaster, franchises are working with up-to-date, unified data that enables them to adjust their marketing messages faster than retooling a ticket drive on an annual basis," says Chris Charron, an analyst and vice president at Forrester Research. "They're receiving the data to create targeted messages based on their fans' history of interactions with their team instead of relying on a media outlet to send a generic message."
Yet CRM is about more than just selling tickets to the game. While teams are catching on to some areas of CRM, many haven't yet cleared all the hurdles. "There's a lot of stuff going on, but what [many teams] perceive as CRM is only fan loyalty and marketing programs," Greenberg says.
Some of the "other stuff" hardly seems sports-specific, such as the uproar over Janet Jackson's "wardrobe malfunction" at the Super Bowl halftime show in 2004 -- but Greenberg cites that moment as an example of the fact that fans aren't the only customers of a sports business, and a reminder of just how deeply sports pervades society.
Other important factors off the field are agents, memorabilia vendors, and, one of the biggest revenue sources of all, the media. In fact, the media plays an interesting role in sports that has no corollary in the business world, Greenberg says. Media entities are not only customers themselves, but customer-influencers, as well -- not only buying the product, but also helping to sell it.
The Philadelphia Eagles understood this value proposition and turned to San Diego-based e-commerce provider Epic Cycle Interactive for help. The 74-year-old football franchise had built relationships with fans and sponsors based on the team's long and colorful history, but its online presence was not able to make the most of its profit potential. Management wanted to introduce interactive efforts to deepen relationships with fans and vendors alike, so every connection between consumers and the brand would be representative of the team.
The Eagles implemented Epic Cycle's SportsProducer online marketing solution and saw immediate results: The team's redesigned Web site experienced a 100 percent increase in user satisfaction, traffic, and frequency after a revision of the site architecture.
When it comes to selecting a vendor, options range as far and as wide as the variety of catcalls Yankees fans have for Red Sox players. Vendors such as Epic Cycle or Nashville-based SmartDM can provide specific e-commerce or email marketing functionality, respectively, while some of the larger suite providers, such as Microsoft, Onyx Software, and, to a lesser extent, Oracle's Siebel Systems, have made progress, Greenberg says. For vendors, "sports in CRM is a very interesting opportunity," he adds. "Now more than ever, sports teams are looking to keep an eye on the ever-increasing number of fans that love America's pastimes."
Top 3 Vendors in Sports & Entertainment: Source: The 56 Group
- Consona's Onyx Software
- Oracle's Siebel Systems
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