20-1

Chapter 20Chapter 20

Relationship MarketingRelationship Marketing

In the Business of SportsIn the Business of Sports

McGraw-Hill/Irwin ©2007 The McGraw-Hill Companies, All Rights Reserved

20-2

Two Broad Marketing ObjectivesTwo Broad Marketing Objectives

• Attracting New Customers

• Retaining Existing Customers

– Customer Acquisition Can Be Costly

– Customer Retention Deemed Superior

20-3

Customer RetentionCustomer Retention

• Basic Premise of Relationship Marketing

• Seeking Long-Term Association

• Cost of Customer Acquisition Estimated to be 6 Times the Cost of Taking the Steps Required to Keep an Existing Customer Satisfied

20-4

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)

20-5

Benefits for the Sports MarketerBenefits for the Sports Marketer

• Customer Loyalty

• Facilitates Resolution of Fans’ Complaints

• Sense of Belonging– BIRGing – We Won– CORFing – We Lost, But We Were Robbed

20-6

Benefits for the Sports MarketerBenefits for the Sports Marketer

20-7

Components of 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

20-8

Components of Components of Relationship MarketingRelationship Marketing

• Communications– Interactive and Responsive

• Bonding– Strong Unified Commitment Viewed by the

Participants as a Partnership

• Continuity– Seek a Long-Term Association

20-9

A Look at Fan BondingA Look at Fan Bonding

• The Core Relationship– Usage

• Length of Relationship• Intensity of the Commitment• Frequency of Contact

– Fan Identification• Emotional Involvement• Personal Commitment• Loyalty

20-10

A Look at Fan BondingA Look at Fan Bonding

• 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

20-11

Applications of Relationship Applications of Relationship Marketing in SportsMarketing in Sports

20-12

ClubsClubs

• 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)

20-13

Serial MarketingSerial Marketing

• Spectator Sports – Giveaways– Require Regular

Attendance for Complete Set

20-14

Frequency IncentivesFrequency Incentives

• Spectator Sports – Frequent Attendance– English Rugby Football Union Smart Card

• Participation Sports – Frequent Play– 10-Pin Bowling: Play 6 Games; Get 1 Free

20-15

Affinity Marketing ProgramsAffinity Marketing Programs

• 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 Use Accrues “Points”– Bass Pro Shops Outdoor Rewards Visa Credit Card

20-16

Affinity Marketing ProgramsAffinity Marketing Programs

20-17

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

• Traditional Print Media or E-Mail

• Spectator Sports – Contacting Fans– Newsletter, Schedule, Promotions

• Participation Sports – Contacting Participants– E-Mail Seeking Runners for Upcoming Marathon

• SASS – Magazines– Callaway Golf Magazine

20-18

Interactive OpportunitiesInteractive Opportunities

• 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

20-19

GiftsGifts

• Spectator Sports – Recognize Relationship– NFL Team’s Christmas Ornament for Season Ticket

Buyers

• Participation Sports – Encourage Return– Golf Tournament that Provides Gift Pack for Players

• SASS – Reward for Past Use– Bowling Ball Co. that Gives Special-Edition Ball to

Recognize Perfect Game by Bowler Using Its Brand

20-20

Fan Appreciation ActivitiesFan Appreciation Activities

• Spectator Sport Based

– Player Clinics

– Autograph Sessions

– Celebrations of Team Achievements

20-21

ContestsContests

• Spectator Sports – Win Tickets– Future Game or Cross-Marketed Event

• Participation Sports - – Register On-Line; Chance to Waive Fees

• SASS – Win Product– Titleist.com: Win Year’s Supply of Golf Balls

20-22

Logo MerchandiseLogo Merchandise

• 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.

20-23

Direct Access/Direct Access/Personal RepresentativePersonal Representative

• Spectator Sports – Ticket Representative– Assigned to Handle Season Ticket Accounts– Addresses Exchanges– Resolves Complaints– Addresses Renewal– Provides Constant Point of Contact Over Time

20-24

RecognitionRecognition

• 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

20-25

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

20-26

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• Grass Roots Sponsorship of Running

Events• Newsletter to Known Runners• Seek Input from Retailers

20-27

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

• Track Sales

• Monitor Complaints

• Customer Satisfaction Surveys

20-28

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

• Monitor Internet Chat Rooms and Bulletin Boards

• Calculate Click-Through Rate for Internet-Based Relationship Marketing Initiatives

• Customer Relationship Marketing Software

20-29

Recovery MarketingRecovery Marketing

• When Things Go Bad, How Do We Get the Customers to Come Back?

• NHL After Cancelled 2004-05 Season

• Formula 1 Racing in USA After 14 of the 20 Cars Entered Refused to Race because of Safety Concerns about Tires

20-30

Five Steps for Recovery MarketingFive Steps for Recovery Marketing

20-31

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

20-32

Closing CapsuleClosing Capsule

• Win-Win Environment

• Focus Is on Lifetime Customer Value – In Other Words, a Long Term Relationship

• Despite Best Efforts, Things Go Awry

• Need to Understand Recovery Marketing