Sport Regenerating Through Data – Harry Palmer

July 31, 2013

The fact is that sport never used to have to compete for attention or for a share of the leisure market. However, times have changed and customers have more options, higher expectations and less discretionary spend than ever before. It’s a potent cocktail.

This is often referred to as sport’s CRM or ‘customer relationship management’ challenge. A common mistake is to think of it as a ’systems and sales’ challenge. Really it’s about looking hard at every part of the way organisations engage with their customers. The key to this is data. Data which not only exists in spades but through modern developments and techniques is now much more readily available.  Data is not a medium. It’s not a social, digital, user-generated or any other type of media. It’s more important than that, because it is the building block through which any communication tool can get personal. And getting personal is exactly what sport needs to do.

Sport is changing and there are two major reasons why. Firstly, the landscape is changing. Every time someone gets a tailored and bespoke piece of communication from the corporate sector, or even a theatre or music venue, the quality threshold increases.

Secondly, many sporting markets aren’t actually growing and grabbing market share is tough. West Ham can’t pinch fans from Arsenal, at least not domestically. So they need to work harder with the ones they’ve already got.

The future will be driven by the sports who serve up the right experience to the right person at the right time. Sports will either thrive or not survive as a result of this. There will be room for blockbusters (for example the Premier League) which still drive conversation, plus niche properties which know their audience, own the data behind it and can sell it effectively

Sporting organisations are all at very different stages of their journey in getting to grips with this:

1st Generation organisations are just starting out. They often view it as a process – they ‘do CRM’. The strategy has rarely been well thought through or bought into by the board. Whilst 1st Generation organisations might be collecting email addresses, tweeting and sending out a monthly newsletter, none of the communication will be segmented. Data will usually be spread across the organisation, with no thought of building a single customer view to treat customers as individuals.

Nearly always a 1st generation organisation will focus on systems, as they are impeding joining up the dots. They will rarely think about the process changes or people buy-in progress would require. Typically at this point, CRM is a marketing initiative with elusive ROI. The Chief Exec wonders if it is worth the hassle and it is an uphill battle.

2nd Generation organisations have normally gone through the pain of 1st Generation and learnt some lessons (often the hard way). They’ve probably been mis-sold at least one system but at least they have made a start.

By now, customer data is normally held in one smart(ish) application through which activity can be pre-planned based on individual customer behaviour. Marketing team members spend more time planning and reviewing, and far less ‘getting campaigns out the door.’ Results feed back into the system in a ‘closed loop’. It is easy to calculate ROI, learning from successes and failures.

While CRM remains a marketing responsibility, this ROI based approach has the respect of the Chief Exec. CRM planning forms a part of their overall business strategy.

3rd Generation organisations remain relatively rare in sport – perhaps a small handful of rights holders and governing bodies operate in this space.

By this stage, systems are fit for purpose. This saves time, cost and enables attention to switch to automising manual processes, driving people productivity, new product development and genuinely listening to customers. Customer communications will not only be tailored, but two-way – giving the customer what they want, when they want, however they want it. The organisation is structured around customer need, rather than customers having to work around the organisation structure to find what they are looking for.

Immediate return on spend will have been between 200% and 400% over 3 years. More importantly, the improved customer experience will have created fans (or participants) for life. CRM is not just part of the CEO business strategy – in many ways, it is the business strategy!

There are some fine sports organisations which have not made 1st generation yet. It’s also common to find 2nd generation organisations struggling with the business case and sheer upheaval required to move to stage 3. It is possible to jump up the ladder quickly by learning from the mistakes and great decisions others have made.

It might be a few years late, but sport has recently woken up to the fact that it too has customers. Data might not be the sexiest currency, but it is the fundamental building block which is enabling sport to regenerate.

Harry Palmer is a Consultant at Two Circles. A business graduate of Edinburgh University, Harry has been involved in major business change projects within British sport for clients including British Tennis (LTA), the RFU and the Youth Sport Trust.

He has helped CEOs and executive teams to define their long-term strategies and business plans clearly as well as leading on innovative approaches to both internal and external communications.

Two Circles is a data driven sports agency specialising in enabling sports rights holders and governing bodies to maximise their income and develop new revenue streams. It also helps sponsors of many sports bodies to generate significantly better benefits from their sponsorship programmes.

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