Relationship Marketing:Current and Future Impact in Sports Business

By: Michael Coe

Phone: (209) 479-1578

Email: Michaelcoe10@gmail.com, Aerofuel@mail.fresnostate.edu

Agenda Inspiration for research Industry Statistics/Trends The spectator as the consumer

Fan motives Applying Kelman’s approach to attitude change to

the sport industry Relationship marketing/Creating long term fan

commitments Academic research and real life applications

Consumer is the Arbiter of Quality If brand is a tangible good,

Consumer evaluates brand on how well brand performs as expected/promised through MKTG communications

With service brands, Consumers must almost always rely primarily on

the service EXPERIENCE and how it was DELIVERED to decide on quality

(Little, 2009)

(Little, 2009)

Sports Industry Overview Major League Baseball (MLB) Revenue

$6.8 Billion National Football League (NFL) Revenue

$7.8 Billion Estimated Size of Sports Industry in U.S.

$414 Billion Annual Company Spending on Sports Advertising

$27.3 Billion

(Plunkett Reseaerch, Ltd., 2010)

Sports Marketing Domains Two dimensions within sports marketing

industry: Marketing of sports products Marketing through sports

Type of product sold & level of integration create four strategic domains for marketing Theme, alignment, product, & sports based

Focus on marketing sports product Author does not include relationship marketing as a

focus (Fullerton et al., 2008)

Industry Forecast From Leaders Emotional spend as important as financial

Highlights fact that relationships in sport are key Experience for fans at events of utmost importance

Preparation & commitment to fan leads to success during good and bad times

Effectively managed social media will aid in development of fan relationships Open communication to build fan trust Open to opinions and feedback

(Kadlecek, 2010)

Spectators as Consumers Traditional marketing approach criticized for

not including interaction and relationship aspect of marketing

Considering spectators as consumers has given new importance to relationship marketing theory Four P’s not applicable to all settings

Relationship marketing being called upon as new marketing paradigm Attracting, maintaining, & enhancing

(De Burca et al., 1995)

Fan Interaction & Relationship Formation Studies in sociology and psychology show ways

spectators interact/form relationships Identification with teams/heroes, expertise in stories/stats,

mock arguments/administration Nature of sport allows consumer to consume/interact

long after game is over Relationship marketing allows interaction dynamics

to be captured Sport spectators have strong desire for continuous service

Building relationships provides great dynamics for this

(De Burca et al., 1995)

Motivational Profiles of Sport Fans Research indicates that the motivation of fans

of aggressive sports are similar NHL, NFL, NBA, MLB, & Fights

Group affiliation scores are very high in this target Shows that Relationship Marketing can be

beneficial because relationships are wanted by these fans

(Wann et al., 2008)

Applying Kelman’s Functional Approach to Attitude Change Relationship marketing attempts to direct

attitudes Understanding the psychology behind

attitudes makes it easier to change them Consumers fall into one of three motivational

levels Compliance Identification Internalization

(Bee et al., 2006)

Compliance Most superficial level of social influence Consumers purchase/take part in activity in

order to gain or avoid social rewards May avoid wearing/supporting losing teams to

avoid embarrassment Fan loyalty programs designed to lure fans to

ballpark and counteract this Once external reward is removed, relationship

ends

(Bee et al., 2006)

Identification Tendency for sport spectators to bask in

reflected glory (BIRG) Self-esteem function

Perceived overlap of someone’s own self-image and the success of a team/player

At this stage, fan is more likely to maintain and create a successful relationship

(Bee et al., 2006)

Internalization When an individual’s behavior is influenced

through shared values Enduring & Long-term Fan relationships are result of strongly held

beliefs that are congruent with team/player Teams should try and match the values of

target consumers with those of organization Result = more intense fan behavior

(Bee et al., 2006)

Influencing Fan Loyalty Loyalty viewed as a

developmental process Research shows precursors to

becoming a loyal fan include: Involvement Fan attraction Psychological commitment

Organizations increasing effort to promote participation and education in sport

Anaheim Ducks The Rinks(Bee et al., 2010)

(Anaheim Ducks News, 2009)

Customers/Fans for Life CRM should not be used in sports the same way it is

used in other business sectors CRM first used to handle season ticket sales

Failed in making significant impact CRM in sports should include:

Web sites, e-commerce, online ticketing, player/team contact points, COMMUNICATION

All about the fan experience/personalization Regardless of results on playing surface

(Weinberger, 2004)

Post-Strike NHL’s Use of CRM All sport franchises should use

CRM to be proactive Communication with fans saved NHL

Two way relationship Provide as many customer touch

points as possible to receive fan feedback and info

Used CRM to customize email campaigns, special offers, & promos

(Beasty, 2005)

Role of Social Responsibility in Sport Industry Organizations have power to impact/influence

quality of life for: Employees Customers Shareholders Community members

CSR goes a long way in shaping perception Concept of social entrepreneurship important Growing in business and popularity sports

organizations are often seen and associated not just with the sport, but with the community

(Ratten et al., 2010)

Cause-Related Marketing in Sport Sports organizations attempt to associate themselves

with good causes Both charitable and valuable to business Strategic potential not yet thoroughly examined in a

sports scenario Can provide competitive advantages:

Improving consumer’s attitudes toward team Repurchase intent Team/organization reputation New customer acquisition

(Kim et al., 2010)

Cause-Related Marketing Impact Consumers pass through psychological stages

before reaching purchase decision Study showed that cause-related marketing

was not the sole cause of re-attendance Instead, a primary factor in creating a positive

attitude toward the organization No linkage was found in regards to fans

perception of altruistic or monetary motives Implies that this strategy has appeal to fans

(Kim et al., 2010)

Cause-Related Marketing Implementation Cause-related marketing gaining relevance as a

tool to switch behaviors of consumer segments Proper implementation & execution can lead

to: Increased consumption patterns Increased loyalty

Sport properties must be thorough in implementation Must know consumer interest and support of cause

(Irwin et al., 2010)

Fan Commitment Research Fan’s overall satisfaction and perceived

communication effectiveness = Trust & commitment with sport property

Level of commitment to sport organization can influence the effectiveness of cause-related marketing

Overall, building a trusting relationship with fans will make lucrative sponsorships more enticing for other companies

(Hong, 2005)

From CRM to FRM (Fan Relationship Management) CRM = mixture of transaction and relationship

marketing ‘Fan Relationship Management’ aims to learn from

both successes and failures of CRM In the sports context, special characteristics of the

sport/fans must be considered Can’t effectively implement CRM or relationship

strategies unless considered A simple ticket sales mindset to marketing sports

franchises comes at the cost of relationship building & long term success

(Adamson et al., 2006)

FRM Means Commitment to Fan Primary attributes of relationship marketing

Dialogue, trust, & mutual respect Shared ideals, mutual benefit, and a

commitment to continue the relationship Commitment to customers/fans needs to take

higher priority than short term profits CRM and RM should be strong held beliefs

that are held throughout the organization Service experience key for all fans

(Adamson et al., 2006)

The Role of Emotion and Camaraderie Move beyond selling focus, Move towards the

ethos of learning and growing together Sports clubs need to segment fan base

Fans differ in value to the organization Loyalty Psychological and physical needs from team

Casual fans and fanatics have different needs Casual fans could transition to greater

involvement(Adamson et al., 2006)

A Team & Fan Based Approach Don’t allow relationship management to be

stolen by a single department Technology not the sole solution A customer focus is

Concentrate on people issues Communicate with staff constantly Communicate changes with customers/fans

(Adamson et al., 2006)

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