SBJ/November 22 - 28, 2004/SBJ In Depth
Banking on sports
Published November 22, 2004
Regulatory changes have greatly increased the types of business banks can conduct, and a wave of consolidation has changed the bank landscape. As a result, U.S. banks — and increasingly foreign banks that want a foothold here — are in a perpetual state of redefinition.
The trend benefits sports properties, as more sponsorship dollars pour in from banks looking for the best way to reintroduce themselves to consumers with new products, new territories and new company names.
As big as banks are getting, they all want to send the message that they’re still a hometown bank. That’s where sports comes into play.
“There’s a view that sponsorships for the banking community can get very community-based,” said Greg Simon, vice president of IMG Consulting. “You [the consumer] want to bank with the guy who’s around the corner from you, so in a confusing mass-media environment, sponsorship is a way to create something like banking used to feel in the community.”
|Key bank sponsorships in sports|
To strengthen the “new” bank’s link to the community, in the past three years RBC has signed a slew of deals, including a 20-year commitment to name the RBC Center in Raleigh and relationships as the official bank of the ACC, North Carolina State University basketball and Lowe’s Motor Speedway outside Charlotte.
RBC Centura identifies four areas that sponsorship is supposed to serve: brand awareness, customer attraction and expansion, community support and awareness, and employee engagement. That’s a lot of heavy lifting.
At least three of those objectives were met in a comprehensive “Biggest VIP At The ACC” sweepstakes last year, which drew nearly 99,000 qualified entries for a posh trip to the ACC basketball tournament. More than 80 percent of the participants were not RBC Centura customers. Sign-ups were largely online, at the bank’s site, acc.com and gopack.com. Via incentives, the sign-ups generated a 21 percent increase in the bank’s online bill-payment program.
Concurrent with the sweepstakes, the bank had a Web-based Tribute To Teachers program that encouraged nominations of elementary and middle-school teachers in the community. It gave away a total of $10,000 to 20 teachers.
Like RBC Centura, Wachovia began heavy branding after a 2001 milestone, when it merged with First Union, keeping the Wachovia name. It has had more banking-division mergers since, and last year its securities arm merged with Prudential Securities.
“We really are positioning ourselves as a financial services company rather than a quote-unquote bank, and the goal of our sponsorships is to support all these [segments] at their various stages of evolution,” said Dan Fleishman, senior vice president for sponsorships and alliances.
The company sponsors the PGA Tour’s Wachovia Championship in Charlotte, titles the Wachovia Complex facility in Philadelphia, and has deals with numerous pro sports teams and universities up and down the East Coast. Wachovia has a presence at nearly a dozen PGA Tour events.
“We don’t eliminate any property from consideration, but our approach has been to cut deals in regions where we have all of our lines of business,” Fleishman said.
Here again, sports deals are being made to do a lot of work. “As major banks consolidate into financial supermarkets, sports allows companies to reach all types of customers,” said Mike Reisman, a principal at Velocity Sports & Entertainment.
“Sports stuff is very versatile. With a single sponsorship you can speak very broadly to the type of people you want to drive into branches, as well as to a high-wealth individual you want to bring to a luxury suite,” Reisman said. “Also, when you work with properties, you’re talking about a big business with lots of banking needs [that the bank can handle].”
One of Wachovia’s most successful promotions has been “fantasy” events with many of its pro and university partners. With NFL teams, it has done “Any Given Monday” events, where high-wealth individuals are invited by the general manager to visit the stadium on a Monday evening and participate in a touch football game, wearing personalized jerseys. The lights are on, the PA makes announcements, there’s a commemorative DVD for each player and a dinner for them and their families, followed by watching “Monday Night Football.”
“We want to put our relationship bankers in the position of hero,” said Fleishman.
At the same time, Wachovia is taking a fresh look at its smaller deals, done locally, to ensure that they’re as rigorously executed as the regional and national deals.
Here to stay
Another key element of bank deals is permanence — or the appearance of it. Banks have led the way in the naming-rights revival of the past three years, because naming a sports venue achieves all the aims Reisman stated while also giving the impression the bank is a part of the community for the long term.
Examples are everywhere. Fifth Third Bank has put its name on three minor league ballparks — in Dayton and Toledo, Ohio, and Grand Rapids, Mich., since the late 1990s — and has the Fifth Third Arena at the University of Cincinnati, part of a $10 million commitment to the university that goes beyond sports.
“Now, sports doesn’t sell product itself as well as name recognition and brand, but we chose sports nevertheless,” said Wil Daly, senior vice president and chief marketing officer of Fifth Third Bank. “Why? Because what we chose is civic oriented, it gives back to the community and reinforces our affiliations in those communities.”
Fifth Third Bank has another long-term “name” deal that is relatively uncommon in the bank sector — a relationship with MLB hall of famer Johnny Bench that stretches back 30 years and reinforces Fifth Third’s image as a permanent community fixture.
“The liability with athletes is so great, if we didn’t have Johnny, we wouldn’t go looking for him,” Daly said. “But you cannot overestimate how impressed people are with him, and we use him fairly judiciously — he’s on the board of our Florida bank, he works particularly well with entrepreneurs and he’s at our golf outings — he’s just very good with people.”
If banks look for the impression of permanence and “ownership” in many of their deals, Chicago-based LaSalle Bank takes it literally. It owns and operates the La Salle Bank Chicago Marathon, the La Salle Bank Shamrock Shuffle 8K and the LaSalle Bank Open on golf’s Nationwide Tour. The marathon donated $5 million to charity last year, comparable to top PGA Tour events.
“We had sponsored all three events, and we wanted to be able to do all the things we wanted at these events,” said Scott Cassin, vice president of sports marketing for the bank. “Our White Sox and Cubs deals are phenomenal sponsorships, but do we have that kind of flexibility? Plus, when you own it, it’s giving back more to the community and the runners. It’s amazing how people identify us with the marathon, and you can’t simply sponsor that.”
The bank ran a promotion this year that refunded the $80 entry fee to runners who opened accounts with the bank. Other mechanisms have included mobile ATMs that roved the course, available to the 1.2 million spectators.
Banks are supposed to be experts at managing money, and Cassin said La Salle invested in these events partly to reinforce the public’s perception of its skill in this area.
Cutting sweeter deals
The evolution of banks into multipronged financial institutions puts additional pressure on the sponsorship relationship these days. RBC Centura is like most banks making large deals today: It bargains hard to get most or all of a property’s banking business — from a stadium loan to employee checking accounts — in the deal.
“We want as much of their financial and banking business as they can turn over,” said Molly Sapienza, manager of sponsorship for RBC Centura. She said this isn’t just for the business itself, but for credibility with other corporate sponsors, who are naturally targets for the bank’s business.
Another pressure point is category definition, as banks are constantly adding to their areas of business while properties seek to carve up categories as narrowly as they can.
“The tug-of-war is much greater than ever for the bank and the property to define categories. It was a much simpler discussion five or 10 years ago,” Velocity’s Reisman said.
Wachovia has walked away from deals because banking categories were chopped up too finely, Fleishman said. “We are not going to compromise our ability to fulfill our needs and the consumer’s by a property saying, ‘Your activation program is limited to banking.’”
Nevertheless, in many cases, retail banking is the prime activation point of sports deals, and much sponsorship activity represents banks taking pains to present themselves as a trusted member of the community.
“If we had had this conversation five years ago, I would have said nobody’s going to care about the retail banking business, it’s all about interactive banking,” Reisman said. “Yet there’s this incredible proliferation of banks going back to brick-and-mortar, retail checking and local relevance. That’s the name of the game right now.”