SBJ/20091019/SBJ In-Depth

Value minded

Even the bobblehead is feeling the pinch of the economic recession.

Companies that provide teams with the products for giveaways have reported noticeable declines in orders. As teams look for ways to cut costs, they’re often trimming the number of freebies, especially since finding sponsors for the promotions has grown more difficult.

However, that doesn’t mean all fans are coming away empty-handed at the gate. Some teams have gone in the opposite direction, either boosting the number of giveaways or increasing their quality, viewing such efforts as a needed element to help build attendance and enhance the game experience.

The Pittsburgh Pirates gave out free caps
on opening day this season at PNC Park.

“The discretionary income for most people has really been hit hard,” said Chris Tyler, vice president of marketing for World Promotional Products, a company with many NBA clients in addition to teams in other leagues. “There has to be some incentive to spend that money on a movie, spend that money on some other entertainment event, or to go to a ballpark.”

Teams that are cutting back aren’t abandoning specific giveaways as much as doing fewer of them. For example, Jeff Collins, Match-Up Promotions vice president of sales, said teams will issue a series of two or three bobbleheads as opposed to five or more.

Collins, whose company’s clients include the Tampa Bay Rays, Washington Nationals, Florida Marlins and Cleveland Indians, has seen several teams looking at doing more high-end promotions, including less apparel and more player-related items.

All about the experience
Matthew Wszolek
Director of sales and promotions
Chicago Cubs
“Giveaways for us have always been a very important piece of what we do, not necessarily to drive ticket sales but more or less to enhance the Wrigley Field experience. … There’s other ways to skin the promotional cat when it comes to expenses and economic conditions in that you can do something like we did in September of this year where we had Bingo Night. Out of all the years I’ve done stuff here, this is my ninth year, it was the most incredibly well-received promotion we ever did. People received bingo cards when they came in to the game that had one of 51 different elements on it that could happen in a baseball game, not just Cubs-specific. If they covered the card, they won a bingo, which was autographed memorabilia or the chance to throw out a first pitch next year. Fans were interactively playing along the entire game. Instead of just giving them an item that they kept, they got to play along for three hours. People were ridiculously out of their minds, and I got 250 letters from season-ticket holders saying that was the most fun they’ve had at a ball game, especially given the fact that we weren’t playing very well at the time. It made the Wrigley Field experience better.”
— As told to William Cooper

In industry lingo, they’re called “high-perceived-value items.” For example, the Rays offered their fans a replica of their American League championship ring at the second game of the season.

Matthew Wszolek, director of sales and promotions for the Chicago Cubs, said the team seeks to provide branded items that fans cannot obtain elsewhere, such as a Cubs uniform for American Girl dolls, and a statue commemorating Carlos Zambrano’s no-hitter last season.

The Cleveland Indians also are continually trying to discover the next big thing in promotions that might connect with fans. Vic Gregovits, the team’s senior vice president of sales and marketing, said the team had a great deal of success this season with what he calls the “bobster,” a combination of a bobblehead and a figurine.

In the NHL, the St. Louis Blues go for impact, or as Blues Vice Chairman Michael McCarthy puts it, promotions “that people maybe take a memorable view of.”

“If we knocked out any kind of a niche for ourselves, we’re trying to be more large and impactful versus small and cutesy,” McCarthy said. Such efforts have included a bailout mortgage promotion in which the team picked one fan per game over 11 Saturday games last season and paid their mortgage or rent.

Getting more creative is also more crucial for teams as they face greater challenges finding sponsors to help cover the costs of such efforts. In fact, Collins projected that in Major League Baseball this season, revenue from giveaways fell 25 to 30 percent on average per team, primarily due to an inability to find sponsors to subsidize the promotions.

Ushers prepare to hand out calendar magnets
at the Los Angeles Angels home opener.

Sponsors that are staying in the game are taking on an increasingly active role in working with teams on planning the giveaways, as they seek to best achieve return on investment and to get consumers to use their products or services. McCarthy said, for example, that several of the Blues’ sponsors have shown interest in bounceback coupons in conjunction with giveaways to help lure consumers to their products.

Wszolek said sponsors are seeking high-perceived-value items that are specifically tailored to them. “I think all companies and all corporations, sponsors, are looking to integrate more into the experience and thus produce results on the back end with ROI,” he said.

Wszolek offered as examples a $20 gas gift card sponsored by a gas company or a cereal bowl sponsored by a breakfast food brand. “Instead of, ‘Here’s the item, I’m going to put my name on it somewhere and it’s going to sit on somebody’s shelf,’ it’s more getting involved within the items that can actually affect their bottom line, too.”

To spend or not to spend?
Chris Tyler
Vice president of marketing
World Promotional Products
“There’s basically teams that feel promotional giveaways will help drive ticket sales. And then there’s teams that basically don’t believe that and look at the promotional giveaways as an expense. We’re seeing teams that were spending quite a bit of money over the last couple of years cut drastically back. And then we’re seeing other teams that weren’t spending much money start spending money to help ticket sales. … You can’t convert a D game into an A game, if you’re playing a poor opponent. But what you can do is you can drive ticket sales and make that D game into a C+ game or B- with the right promotional item. We’ve been very fortunate and successful with doing a lot of replica jerseys. The jerseys are a very expensive item. When you’re giving away a value of about a $29 to $35 item and ask them to spend $10 to $15 on a ticket, it goes back to the perceived high value. So that’s really been helping drive ticket sales for a lot of teams. But we’ve seen a lot of teams change their decisions. … (And) sponsors don’t feel like putting any more money in when there’s nothing out there to track return on investment.”
— As told to William Cooper

Giveaway makers and teams have seen the benefit these high-value items can have at the gate. Two replica jerseys that World Promotional Products developed for the Kansas City Royals helped produce two sellouts for a team that had only eight sellouts all season. Promotional products supplier BDA worked with the Seattle Mariners on a Ken Griffey Jr. bobblehead night in August that drew a crowd 17,000 greater than the team’s average attendance for the season.

“(Teams are) really having to take care of their fans, so they’re trying to do great things for the fans to make it a destination for them,” said Jay Deutsch, co-founder of BDA. “They’re competing for dollars out there from the consumer’s wallet like everybody else. If you do something that’s a great experience for the fans, they’re going to come back.”

However, interest in giveaways and other promotions isn’t completely about filling seats. The Cubs played to 96 percent capacity this past season, yet Wszolek reports that the team maintained its number of giveaways, and will do so again next season.

“Giveaways for us have always been a very important piece of what we do, not necessarily to drive ticket sales, but more or less to enhance the Wrigley Field experience,” he said.

Making an impact
Michael McCarthy
Vice chairman
St. Louis Blues
“In most cases, what the Blues have tried to inject in every one of our promotions is some sense of impact. What (owner) Dave Checketts probably first got a lot of attention for coming up with in St. Louis was the free food promotion, where everybody was literally coming in and eating on us. The idea was to get them in and let them see this product. And they’ll either come back because it’s compelling or they’ll take their hamburger and go. We were pretty confident that all we had to do was put them in front of this young, energetic team and they would come back. On the (team’s bailout mortgage promotion), I think that was an expression of the sensitivity we had about the economy and what our fans were faced with.
We thought it would be compelling, rather than change everybody’s life in such a small incremental way by handing them each a bobblehead, to change one person’s life or a family’s life pretty significantly if we went so far as to pick up their mortgage or rent. We did that and … they ended up selling an incremental 25,000 seats; the revenue was a significant spike for us. But I think more importantly, if you look at the Web site and the stories of the folks who won, these were almost all really impactful tales of changing people’s lives who were struck in some way or another by the economic troubles.”
— As told to William Cooper

MLB teams also are not experiencing much trouble moving tickets for the ongoing postseason, yet Deutsch said more teams are doing promotions in the playoffs this season than they did last year. “They’re not trying to sell a ticket, but what they’re doing is they’re giving fans an experience, and that’s how valuable the sports teams are looking at their customers today,” he said. “If you talk to all the teams, what they want to do is provide the ultimate customer experience, and the good teams get it.”

The same situation applies in the NFL, where the limited number of games and its standing in the sports world means that selling tickets generally is not a chief concern of promotions. It’s all about improving the game-day experience.

That can mean something on the extreme, such as the New York Jets offering a fan the chance to join the team in the locker room and lead them out onto the field for a game. Or it can mean smaller, yet still impactful, promotions such as scarfs that have been a hit with Chicago Bears fans, or the recyclable grocery bags handed out by the Atlanta Falcons.

All of this is not to suggest that the giveaway and promotion market is the picture of health heading into the future. Tyler for one does not expect a big turnaround in giveaways until at least 2011 or 2012. Yet he’s hopeful that an increased focus on giving away quality products will prove beneficial to teams as they continue to deal with the downturn.

Said Tyler: “If you’re not taking care of your fans, and you’re not giving your fans something of value, and you’re not giving your sponsors the return on investment, you’re really missing out.”

William Cooper writes for sister publication SportsBusiness Daily.

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