SBJ/20090921/Opinion

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  • Let science of marketing drive creative solutions

    Greg Economou’s article (SportsBusiness Journal, Aug. 31-Sept. 6) about the art and science of selling was spot on, and I believe that this philosophy could and should be applied to marketing in sports as well.

    Sports marketing is many times inextricably defined by big events, captivating advertising, eye-catching design of signage and collateral, and sometimes simply slapping a logo on a product. Of course, these artful elements of the marketing mix are imperative to success, but the science of marketing should be applied to drive decisions regarding these creative components.

    The first scientific element of marketing is market and consumer insight (or more boringly named “market research”). To start, properties, agencies, and brands must have a detailed, thorough understanding of their fan base, including demographic characteristics and psychographic/behavioral traits, in addition to analysis of the competition and the overall economy. Additionally, companies must use research to understand what their fans think about the positioning of the brand in order to properly develop effective advertising, engaging design, and exciting events. For example, Red Bull understands that their core audience is typically young and involved in high-energy activities; thus they allocate their sports marketing funds to extreme sports such as surfing, motorbiking and flying and highlight these activities in their advertising to really connect with their consumers and differentiate from their competition. I highly doubt you’ll see the Red Bull logo on the Pro Bowlers Association sponsor roster any time soon nor will you see Red Bull’s primary competition leapfrog them in market performance.

    Second is testing and measurement to drive decision-making about the use of marketing assets. This can be broken down into two types of measurement: testing of key performance indicators (KPI) and measuring financial performance, or return on investment (ROI). 

    Regarding testing KPIs — let’s say you’ve just designed a few handsome e-mail templates to send out to your fan base. Everyone in your organization looked at a few of your designs, threw in their 2 cents, and chose design No. 1 to launch. Art had great influence in the decision, but where’s the science? Instead of using just a few insiders’ eyes to choose, you can use your fans’ eyes to select the best design. Most e-mail programs have A/B testing capability, where you can send multiple designs to different segments of customers, see which designs resonate more by comparing open rates, click-throughs, etc., and select the best template based on these KPIs. Testing has been historically applied in direct marketing, but isn’t used enough in the digital sports world, where it is much easier and cost-effective. This can be applied to Web sites, landing pages, microsites and most other digital assets. 

    In today’s economy, ROI is a hot topic, and why not? Who wouldn’t want to know how much money you’ll make from sponsoring a property or holding an event and compare that to the cost of your initiative? Bank of America stated that for every sponsorship dollar they spend, they obtain $10 in revenue and $3 in earnings. With their huge stable of sponsorships, they’ve obviously put a lot of work into measurement, and rightfully so (after all, those TARP funds didn’t grow on trees). Though measuring ROI isn’t easy, any kind of financial measurement will help sell initiatives to upper management. 

    I’m not downplaying the art of marketing, as it’s clearly very important; all I’m saying is that the science of marketing should be the driver of a lot of creative decisions. A thorough understanding of research, testing and measurement will help sports marketers become more effective in executing creative ideas.

    Mike Chan
    Washington, D.C.

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  • Let science of marketing drive creative solutions

    Greg Economou’s article (SportsBusiness Journal, Aug. 31-Sept. 6) about the art and science of selling was spot on, and I believe that this philosophy could and should be applied to marketing in sports as well.

    Sports marketing is many times inextricably defined by big events, captivating advertising, eye-catching design of signage and collateral, and sometimes simply slapping a logo on a product. Of course, these artful elements of the marketing mix are imperative to success, but the science of marketing should be applied to drive decisions regarding these creative components.

    The first scientific element of marketing is market and consumer insight (or more boringly named “market research”). To start, properties, agencies, and brands must have a detailed, thorough understanding of their fan base, including demographic characteristics and psychographic/behavioral traits, in addition to analysis of the competition and the overall economy. Additionally, companies must use research to understand what their fans think about the positioning of the brand in order to properly develop effective advertising, engaging design, and exciting events. For example, Red Bull understands that their core audience is typically young and involved in high-energy activities; thus they allocate their sports marketing funds to extreme sports such as surfing, motorbiking and flying and highlight these activities in their advertising to really connect with their consumers and differentiate from their competition. I highly doubt you’ll see the Red Bull logo on the Pro Bowlers Association sponsor roster any time soon nor will you see Red Bull’s primary competition leapfrog them in market performance.

    Second is testing and measurement to drive decision-making about the use of marketing assets. This can be broken down into two types of measurement: testing of key performance indicators (KPI) and measuring financial performance, or return on investment (ROI). 

    Regarding testing KPIs — let’s say you’ve just designed a few handsome e-mail templates to send out to your fan base. Everyone in your organization looked at a few of your designs, threw in their 2 cents, and chose design No. 1 to launch. Art had great influence in the decision, but where’s the science? Instead of using just a few insiders’ eyes to choose, you can use your fans’ eyes to select the best design. Most e-mail programs have A/B testing capability, where you can send multiple designs to different segments of customers, see which designs resonate more by comparing open rates, click-throughs, etc., and select the best template based on these KPIs. Testing has been historically applied in direct marketing, but isn’t used enough in the digital sports world, where it is much easier and cost-effective. This can be applied to Web sites, landing pages, microsites and most other digital assets. 

    In today’s economy, ROI is a hot topic, and why not? Who wouldn’t want to know how much money you’ll make from sponsoring a property or holding an event and compare that to the cost of your initiative? Bank of America stated that for every sponsorship dollar they spend, they obtain $10 in revenue and $3 in earnings. With their huge stable of sponsorships, they’ve obviously put a lot of work into measurement, and rightfully so (after all, those TARP funds didn’t grow on trees). Though measuring ROI isn’t easy, any kind of financial measurement will help sell initiatives to upper management. 

    I’m not downplaying the art of marketing, as it’s clearly very important; all I’m saying is that the science of marketing should be the driver of a lot of creative decisions. A thorough understanding of research, testing and measurement will help sports marketers become more effective in executing creative ideas.

    Mike Chan
    Washington, D.C.

    Print | Tags: Opinion
  • Opportunities in sports business begin with communication

    In the late 1970s, as a rookie seller in the relatively new sports division of the Katz Radio Group, I was challenged to identify new corporate prospects, track them down and then pitch them sponsorship packages. Working with alacrity, distilled by the blissfulness of inexperience and the fear of failure, I wasted no time reaching out to my first 15 targets.

    Unable to immediately get through to any of the 15 advertisers, I left each of them polite and enthusiastic messages. I assumed that the imperative of common courtesy would produce returned calls a day or two later.

    Three days went by and no one called back. It was a deflating baptism into sales.

    Slowly, the cold-calling process hardened me and built character. I learned to get organized. Vinny Daraio, a veteran seller at the time, showed me that he logged every phone call in a notebook. I did the same and have 30 years of telephone diaries to show for it.

    All a seller really wants is to communicate, to be heard. As such, the heap of unreturned calls and the mass of unanswered e-mails punish mercilessly. I often wish that executives would feel this pain; the despair of being abandoned and the agony of being ignored. Passion drives good sellers and salespeople take it hard. Like athletes not bothered by losing, sellers generally fail if the pain doesn’t eat them through and through.

    Sadly, there’s little code of consideration among marketers about returning calls. Often, sports executives, too, don’t get back to their industry colleagues.

    One might think that the explosion of technology in recent years would make communication easier. Today, there are so many ways and places to connect: landlines, cell phones, e-mails and texting. (And for those impervious to recent trends, the old-fashioned letter is still functional and cogent.)

    But for sellers, technology also has its downfall. A simple shield, like caller ID, has become the sword. Marketers, executives and even assistants now choose the calls they answer.

    Unreturned calls have gotten so bad that a Dick’s Sporting Goods executive recently told me there’s often a shocking pause of disbelief on the other end of the phone when one of the company’s marketing people returns a seller’s call. So kudos to companies like Dick’s, Enterprise Car Rental, Dell and others that generally get back to salespeople, if not immediately, certainly within a couple days.

    Sellers should remember that Nextel’s title sponsorship
    with NASCAR began with a cold call.

    Why is it so hard to respond, particularly by a brief e-mail? It only takes a few seconds. During this complicated time while we as an industry battle the scourge of the Great Recession and when the sports sponsorship landscape faces an irrepressible economic headwind, communication is something in which we can all engage freely.

    Think of sellers as problem-solvers, not nuisances. Salespeople generate helpful marketing ideas every day. Years ago, a client surprised me by insisting on picking up the tab at lunch. He proceeded to tell me that his investment pays dividends because salespeople provide invaluable information of all sorts.

    Sellers, too, shouldn’t give up. If it takes five calls to get a target on the phone, many of them quit after four. Persist pleasantly and creatively.

    When I was running the sports division at Westwood One, I was in Greensboro, N.C., one morning for a presentation to Jefferson Pilot (now Lincoln Financial). After an unproductive meeting, I drove dejectedly to the airport and noticed a salient marquee atop a downtown building. It read “Wrangler.” I kicked myself. How can I not know that Wrangler is headquartered in Greensboro? Had I known, I would have tried to set up an appointment.

    I thought, “What the heck. Let me walk in on Wrangler cold.” But I didn’t have any of the marketing executives’ names and had no idea at all for whom to ask.

    When I arrived at Wrangler the receptionist greeted me with a maddening look after I made a beseeching request of her to see the “head of marketing.” Nonetheless, she dutifully tried Mark Clift whose secretary said he wouldn’t see me without an appointment. I pleaded with the receptionist to try again. She grudgingly did and I was told that Clift would be down in a while.

    Twenty minutes later, Clift strolled into the lobby and cordially explained that he doesn’t see anyone without an appointment but that he’ll give me 10 minutes on the front terrace of the building while he took a cigarette break. So there I was, on a rainy, bone-chilling day, giving Clift an abbreviated sales pitch on network radio play-by-play. He told me that Wrangler didn’t use radio but that he would review the opportunity with the people in his department and at the agency. Wrangler wound up buying a package and through the years it became one of the bedrock sponsors in the Westwood One stable.

    When sellers I manage or train are dejected, I often remind them that two of the greatest naming-rights sales in the history of sports started with cold calls, Barclays’ commitment to the Nets’ new home in Brooklyn and the Nextel Cup with NASCAR.

    America is still a land of opportunity but opportunity begins with communication. Let’s not make communication more difficult.

    David J. Halberstam (halby@halbygroup.com) is principal of Halby Group Inc., consultants to the marketing, media and sports community, and author of “Sports on New York Radio: A Play-by-Play History” (McGraw-Hill, 1999).

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  • This Week's Cartoon

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  • Time to start spending on sports again

    I knew 2009 was going to be an uphill battle for my business when President Obama stated at a town hall meeting last October in Indiana, “You can’t get corporate jets. You can’t take a trip to Las Vegas or go down to the Super Bowl on the taxpayers’ dime.” 

    See, my niche segment of the sports marketplace specializes in corporate incentives wrapped around major sporting events such as the Super Bowl. Many of the prize packages we create for incentive contest winners include private airfare, hotel accommodations and event tickets. The contests we develop, mainly for Fortune 500 sales teams, aim to drive revenue and raise earnings before interest, taxes, depreciation and amortization, increasing a business’ bottom line production.

    The program costs a company incurs on these incentive trips help to keep thousands of hospitality industry personnel employed. There is powerful trickle-down effect on each piece of business that flows through hundreds of hands all the way through to the guy making a $5 tip for handling your bag at the airport.

    Unfortunately, this business and others in the sports industry slowed earlier this year after the credit crisis virtually shut the faucet on corporate spending. It was obvious that many companies directly and indirectly affected by the recession needed to work to get their balance sheets back into shape. This meant reducing operating costs, which included trimming marketing budgets and laying off employees.

    The good news is many businesses made quick rebounds in just a couple of quarters to show profit gains. The bad news is in many cases this was caused by extreme cost-cutting measures having nothing to do with revenue-generating business growth. The next earnings report is where it is going to get very tricky for companies to look good as they need to start producing revenue again. Incentive contests, promotions and sports sponsorship programs are needed now more then ever to get the engine going.

    Interestingly enough, many companies no longer face the dilemma of not having actual dollars to spend on these meaningful initiatives. You would think the solution would be quite simple then. But these companies are so fearful of being singled out by politicians for what they term frivolous spending that they are shutting down some of these needed practices. Fortunately, our overall business as well as many others’ in sports have picked up some in the last couple of months. But we are still having to prod some clients who act like a deer frozen in the headlights when it comes to spending on sports. They want to get back in the game, but they are terrified of being perceived in a negative light. This trepidation will have a devastating effect on a company’s ability to grow its business.

    Why is sports being targeted? When a company throws $10 million into a campaign for one of their products to tie into a Hollywood film, no one bats an eye or asks questions. Tying in with Tiger Woods or the Super Bowl? That’s another story.

    A short while after hearing President Obama’s words on going to the Super Bowl, I happened to catch him on ESPN sitting front row at a Wizards-Bulls game. Last month Nancy Pelosi and our House of Representatives approved a bill for $550 million to purchase private aircraft, including a Gulfstream plane so our leaders can fly to places like Costa Rica and Panama for “government educational trips.” Smells of hypocrisy.

    Moving forward, it’s imperative that we in the sports industry not be hesitant in promoting our business. We shouldn’t be embarrassed for using the word “luxury” when selling suites at a game. We all know sports is a huge business around the world nowadays. Sponsorship, promotion, media and hospitality are all legitimate must-have business practices that help companies grow and succeed. There is nothing wrong with that.

    Robert Tuchman (rtuchman@pcevents.com) is president of Premiere Corporate Events, which plans corporate hospitality around sporting events.

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