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10 Things that drive the success of a loyalty program!

Sports Fans by their title are enthusiastic devotees of a particular Team or Club. The level of enthusiasm may vary from casual too fanatical but they maintain interest and loyalty even when dissatisfied with the Sport Product.


In the world of business Loyalty Marketing is generally perceived as a route to customer acquisition and retention. In Sports we use loyalty marketing as a route to customer optimisation. The point being that by in large Sports Fans do not jump from team to team. They align their allegiance with their Team and stick with them through good times and bad.


The question for Sports Teams is "how to optimize and maximise this relationship".


How do you get your fans to engage more with the Team? How do you get them to participate more and ultimately spend more?


The role of a loyalty program in Sports is to add value to the relationship between Fan and Team and in so doing reward the fan for their support along with incentivising the fan ("the nudge") to engage and participate more. Ultimately its a value exchange.


Delivering an effective loyalty program and creating a meaningful value exchange is achievable for all levels of Teams. However, you need to focus on the 10 key Golden Rules. Follow these rules and you will design loyalty and reward activities that promote a real value exchange and help support your brand value.


1. All fans are valuable - BUT not all equal

It's a mistake to think of your fan audience as some enormous / amorphous grouping of followers. It is a universe made up of different groupings based around location (here, near, far), demographics (ethnicity, cultural connections) and level of commitment (fanatics, casual, knowledgable, cursory). Each fan has value as an asset of the brand, but each segment of fans will be attracted by different value exchanges. Therefore the first rule is to not think of a single program to cover all, but to develop multiple concurrent programs designed to target the different segments.


Using the principle in your program:

Many teams, for instance, traditionally focus on Season Ticket Holders - but in reality this may not be most appropriate starting point. Why not start with fanatical fans & casual fans - but look to reward Season Ticket Holders as a subset of these.


2. Scale Matters

It's ok to start small - but think BIG. It is a simple equation. The more fans in the program the more opportunities you will have to build value for all. Loyalty marketing programs that are restricted to a small group of fans (i.e. Season Ticket Holders), may add value to that group, but are unlikely to generate significant ROI to the Team. Remember what you call a fan...others will call a prospective customer. They will pay for access to that consumer base - and the larger the base the more they will pay. Ergo..the larger your program the more commercial partners will pay to access that marketplace.


Using the principle in your program:

Design your program to maximise reach and make it super easy to on-board. Look to auto enroll fans at any and all points of contact - enrol at ticket purchase or on app download. Look to implement a freemium model (free to enrol, with premium upgrade options).


3. Instant Value Principle

People are motivated by an immediate reward, and this will make the program worthwhile in their eyes. Think about kickstarting the program by providing an instant win / benefit for the fact that fan has enrolled. Graduate the instant wins to promote a premium enrolment.


Using the principle in your program:

Design in an emotional win, something with emotional pull that provides instant justification for their time. i.e. become a legend - "name embedded in ice" "your name pixellated on each players shirt" "card with match worn shirt patch". This is not a reward but a win!


4. Focus on Frequency

Once your fans have enrolled, you need to keep their attention. Inactivity is a killer for loyalty programs. Your fans are bombarded every minute of every day by people and organisations that are demanding their attention. Your brand, however, holds a deep emotional place in their heart - so you start from a good place. Build on this - build in mechanisms that promote your members to access the program daily. Make it compulsive without being addictive. Rule of thumb: daily earn leading to monthly burn (reward).


Using the principle in your program:

Build an earn mechanism that rewards daily engagement. Yes reward for game day engagement -but this only happens occasionally (7, 10, 20 times depending on sport). Build daily engagement by linking in daily spend at merchants, digital content views, content creation etc...Ensure that all fans have the opportunity and reason to engage in the program on a daily basis.


5. Think "Balanced Value" economy

Many marketeers make the mistake of focusing purely on points and the points economy. This is too simple. You need to focus on the value economy. The distinction is fundamental. The purpose of the program is that each fan (or segment of fan base) feel that the program offers them meaningful value, and to access that value they are prepared to engage and participate in the ways set out in the program (attendance, spend, creation etc...). Points are purely a mechanism to unlock the desired value. They are also only one of multiple mechanisms - action cards, competitions, instant wins. Successful programs balance the perceived value of the reward with the capacity of each fan to earn access to that reward. Too easy and it does not drive long term behavioural upside. Too difficult and it is seen as unfair and demotivating. If something is perceived as unfair or unequal in regards to reward, people won’t want to take part in earning it. Do nothing to unbalance this value proposition.


Remember "value" is not always empirical. Think SAPS - "Status, Access, Power & Stuff" when building your value proposition. "Status" - recognition as an elite member of the fan community (the reason why pilots visit high status flyers" or why black cards exist). "Access" - to the team in ways that others cannot achieve - briefings, meetings, content, priority tickets, club lounges, toilets. "Power" - the ability to influence the decisions of the Club - "vote on GM""player of the match""choose the rewards". "Stuff" - the least influential is the basic rewards - the merchandise, discounts. bobbleheads,


Using the principle in your program:

Make sure you have calculated your value metrics correctly. As mentioned (rule 1) it is good practice to segment members (season ticket holders, general members, international members, kids) so that they are being awarded loyalty value fairly and it is ok to encourage people to strive for more. It is also important to price a full range of SAPS benefits. Sometimes you may need to ring fence certain behavioural objectives - for instance, if you want to promote attendance - then do not reward with general points - use a challenge / stamp card which unlocks a specific reward "attend 5 times and win". Above all ensure you are clear about the campaigns your member segments are in and why, how they earn value and how they redeem.


6. Make it Personal

Anchoring the program around the individual helps to promote acceptance and engagement. Fromcommunication to rewards the perceived value of the program and the value will increase if the fan thinks its about them. Use data and technology to personalize communications, history, recommendations. Use training to personalise the game day experience.


Using the principle in your program:

Have a look at how you can make the program feel personal. Use data to target the fans on notable occasions - birthdays, anniversary. Not to sell but to engage. Encourage communication between members and program Team. Fans want to be part of the story - so show them getting the rewards, attending special events. Encourage each fan to advocate for the program.


7. Accessible

Make sure your fans can find your program and can easily access. Good user experience is as important as the content. If the signposting, messaging and layout isn’t right then the user may never understand the value of your programme.


Using the principle in your program:

Sounds obvious I know... but the number of Teams that have buried membership / loyalty programs deep in their digital environment never to be found, and then they wonder why fans are not engaging. Program need to be front and centre of your communication strategy - online, in-stadium and across social. Fans may want to interact in stadium , online via mobile, desktop, table, via an app or in person. Make sure that the choices that are presented to them are accurate and that the journey they take is simple, clear and engaging.


8. FOMO is a powerful motivator

Embedded with your program communication strategy should be your story telling. This moves away from the "do this / get this" approach. It focuses on the memorable experiences and outcomes of the programs. The joy of meeting a player or the delight of a child meeting the mascot. The gathering of the brethren in a foreign bar to youth sports sponsored by program members. All these stories build a sense of community and deliver one very strong message: "if you are not in the program you are not part of the story and are missing out" (and it's free to be a member).


Using the principle in your program:

Empower all your departments - marketing, social media, community, retail, sponsorship etc... to find and generate these stories. Above all....


9. Be creative with the rewards

Anything and everything associated with Team has value if it is seen as "authentic" - from call sheets, to locker names, from curated video content to background interviews. The cost of the reward item is not always a fair reflection of the "value" of that reward to the Fan.


Using the principle in your program:

Build a value ranking of rewards with limited experiences at the top and moving down through authentic items down to curated digital content (mass). Supplement these with 3rd party rewards from your sponsors and commercial partners. Model your program to ensure that each fan can find meaningful value in the program.


10. Measure + Interate = CPV

Measure the performance of each aspect of the program. Harness the power of real time data on each customer and each variable in the program. Understand what works (and of equal importance what does not). Actively plan the reward and communication cycle on a monthly basis and set realistic key targets. Ultimately this is about optimizing the potential value (CPV) generated for the team by each relationship with the fan.


Using the principle in your program:

Understand that success needs to be planned and managed. From top down your organisation has to internalise and prioritise this initiative. Fortress can help with the know how, technology and data analytics.


Author:

Richard PInnick

Fortress - SVP Global Business Development

richard@fortressgb.com

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