20-1 Chapter 20 Relationship Marketing In the Business of Sports McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved

20-2 Two Broad Marketing Objectives Attracting New Customers Retaining Existing Customers –Customer Acquisition Can Be Costly –Customer Retention Deemed Superior

20-3 Customer 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 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 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 Marketer

20-7 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

20-8 Components of Relationship 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 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 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 Marketing in Sports

20-12Clubs 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 Marketing Spectator Sports – Giveaways –Require Regular Attendance for Complete Set

20-14 Frequency 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 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 Programs

20-17 Routine Periodic Communications (One-Way) Traditional Print Media or Spectator Sports – Contacting Fans –Newsletter, Schedule, Promotions Participation Sports – Contacting Participants – Seeking Runners for Upcoming Marathon SASS – Magazines –Callaway Golf Magazine

20-18 Interactive 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

20-19Gifts 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 Activities Spectator Sport Based –Player Clinics –Autograph Sessions –Celebrations of Team Achievements

20-21Contests 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 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/ Personal Representative Spectator Sports – Ticket Representative –Assigned to Handle Season Ticket Accounts –Addresses Exchanges –Resolves Complaints –Addresses Renewal –Provides Constant Point of Contact Over Time

20-24Recognition 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: 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

20-26 Example in SASS: Reebok Focus on Female Runner Target Market Focus on Smaller Retailers Emphasize Running Roots in Promotions Sponsor US Olympic Track & Field Grass Roots Sponsorship of Running Events Newsletter to Known Runners Seek Input from Retailers

20-27 Evaluating the Effectiveness of a Relationship Marketing Program Track Sales Monitor Complaints Customer Satisfaction Surveys

20-28 Evaluating the Effectiveness of a Relationship 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 Marketing When Things Go Bad, How Do We Get the Customers to Come Back? NHL After Cancelled 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 Marketing

20-31 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

20-32 Closing 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