Elite Sports Teams are swiftly moving towards a media and entertainment company model converting their organizations into truly national and international brands. For these Teams, commercial revenues (as distinct from broadcast and match day revenues) increasingly represent the largest and most scalable revenue segment.
As the “Home Team” seeks to globalize, the challenge for senior sport executives is to find ways to identify new ways capitalize on this global audience of loyal fans, and to do so across the multitude of physical, digital, and commercial channels that make up the modern eco-system of sports.
The sponsor looks at the Sports Team as a brand amplifier but also a database of potential customers. The challenge for most Teams is that they really don’t have access to the data on their fans. They can give all sorts of information of tendency of fans in and around the stadium, but beyond that most sports teams control very little direct 2 consumer (D2C) engagement with their wider fan base.
It is not an easy task to build a D2C strategy and own a fan relationship. This Master Series has identified a number of actionable strategies for developing a Loyalty Marketing Program. This edition focuses on how your can plug in 3rd parties (sponsors and commercial partners) and give them access to your fan base and in so doing significantly enhance your brand value.
1. Sponsored Assets
It tried and trusted way of integrating sponsors is simply to let them badge the different components of your loyalty marketing program. Your program offers many different brand-able assets - from program name (X rewards sponsored by..) to individual elements of the program (attendance booster sponsored by...), down to the specific rewards and benefits (be in the team photo, sponsored by....). These brand-able assets can be offered as part of an overall sponsorship package (thereby enhancing the value of your sponsor deal) or sold off as specific promotions to different partners.
Using the principle in your program:
When looking to incorporate brand-able assets in your program.
selling elements of the program is more profitable than selling a sponsorship for the full program.
limit access to program sponsorship to existing team sponsors in the beginning.
access to Rewards Portfolio should be sold as a package with the sponsorship of an element of the program.
add-on email sponsor promo campaigns with the sponsorship of an element of the program.
contests, Sweepstakes & Giveaways. Sell Program Points in blocks (see later) for these promo initiatives.
2. Targeted Ad Revenues
A well designed and implemented program will keep your membership base engaged and energized. Adding 3rd parties into this mix adds daily touchpoints that will give the member a valued reason to access the program on a frequent basis (to check offers, balance, rewards, content). Ultimately, the daily theatre of the program will drive logins and engagement.
A program that delivers both frequency plus scale (size of the member base) opens up the opportunity of using the program space as a digital billboard. Fortress works with several ad agencies that deliver targeted ad-campaigns into such digital channels and can attach these services to the program portal. The revenue is based on the traditional digital advertising model of CPM (cost per mille / thousand). A marketing term used to denote the price of 1,000 advertisement impressions on one web page. The fact that we can surface buyer information and target the fan directly through the platform makes this digital platform particularly attractive to advertisers. As such the $ CPM skews towards the upper end.
Using the principle in your program:
Design your program to maximise reach and frequency. Ensure that your targeted ad strategy aligns directly with your membership data and your brand ethos. This is a supplemental revenue, not the prime revenue source.
3. D2C - E-Comm Featured Offers
Plug in online affiliate partners (direct to brand or through affiliate networks). Utilising click through technology, we can deliver your members a range of curated targeted offers and incentives direct from online e-commerce partners and merchants. Fans can simply click through from their member portal and transact on the merchants own e-comm platform. As a click through they will get the benefits of the specific promotion (traditionally discounts) for their spend at the merchant. Since you are the channel of introduction then the merchant will pay a commission on that transaction to your program. Typical commission rates range from 3%-10% depending on nature of the transaction.
Using the principle in your program:
The Fortress platform is already integrated with a number of affiliate networks - this enables you to switch on offers from over 100's of different merchants in multiple territories. We will work with you to design the merchant strategy that best fits your member base. Ensuring that the offers presented are of value to your member base and fit your brand.
4. Digital Vouchers
For merchants that want a more direct interaction with the fan base, and want to drive them into stores and businesses then implement Promo Campaigns based around Voucher Codes (using NFC / QR technology). Merchants can purchase points directly from the program and distribute vouchers via the member portal. These coupon offers can be targeted to specific segments of the fan base or to attached to a specific campaign activated when a fan completes a trigger action (i.e. attends a game(s), hits a certain tier status, logs in from a certain location). Merchants are charged a set-up fee for each campaign and a fee for each coupon downloaded by the fans.
Using the principle in your program:
Coupon campaigns can be especially effective in and around game time where the offer is often linked to the event itself - "discount for pizza", "beer voucher". The beauty of vouchers is that they are generated by the merchant so integrate directly into the ePOS of the merchant location. Ideally merchants should provide the Team with a usage report that shows the voucher number, date and location of redemption. We can then tie this back to the record of the member and add additional value with points.
5. Payment Linked Loyalty
Payment Linked Loyalty is a new mechanism whereby the member can be rewarded for their direct purchases (either online or in-store) at any designated merchants. Whereas the Featured Offers functionality only works for online purchases (click throughs), the Payment Linked mechanism enables fans to earn points for their spend (in store and online) at designated merchants by simply linking any existing debit or credit card to the program. In that way, Payment Linked Loyalty is more “engaging” than Featured Offers, as it taps into the daily spend of the member and does not require the member to access the offer via the member portal.
Payment Linked Loyalty works because the Fortress platform can "surface" transactions processed through the Visa, Mastercard and Amex platforms. Members simply register their existing debit or credit cards (via a secure SDK in the portal). When a member uses this linked card at a designated merchant (either online or in store) then this transaction is surfaced in real time and reported to Fortress. We then convert this transaction to loyalty points within the loyalty marketing program. The process is frictionless for both the fan and the merchant. The transaction data we receive includes transaction value, merchant ID and location, along with card issuer (which enables us to provide enhanced benefits to fans who use a card issued by a specific bank, say sponsor bank).
Using the principle in your program:
Payment Linked Loyalty is easy to switch on in partnership with Fortress. In most territories we can enable members to connect cards from all three networks. At the same time as surfacing transactions at designated merchants we can deliver card-linked offers and promotions to the member to further drive their engagement with the program.
6. Affiliate Merchant Strategy
So you plug in 3rd party merchants (sponsors or commercial partners) into your loyalty marketing program comes the question - what is the ideal mix of merchants to connect?
Fortress has existing relationships with a network of 100’s merchants and brands that we can switch onto the program for both card linking and / or click through promotions.
Our experience however is that in the initial phase of any program we should limit the number of merchants to between 5 and 10. This number allows the program to capture the main categories of daily spend without cluttering the messaging and interface design. Once the concept is established with the fans then it is possible to expand the range of merchants.
Typically we would target partners based on the mix of frequency of spend and prospective spend level. The ideal mix would be as follows (including category of merchants)
High Frequency / Low Spend – coffee, taxi
High Frequency / medium Spend – grocery, QSR
Mid Frequency / medium Spend – pharmacy
Low Frequency / high Spend – sportswear, fashion
Low Frequency / high Spend – travel
Using the principle in practice:
Merchants on board onto the program via the Fortress platform and will pay a commission on all the transactions surfaced through their affiliation with the program. As before typical commission rates range from 3%-10% depending on nature of the transaction. Many merchants add time specific incentives to push greater spend at specific times of year. Merchants are managed and invoiced and collected directly by the Fortress platform.
7. Betting, NFT's, OTT's
Beyond the core sponsor and merchant affiliates there are a whole range of businesses that will benefit from your D2C channel (loyalty marketing program). Businesses such as Sports Betting companies, NFT providers, OTT and broadcast subscription services, e-commerce platforms (fanatics, ebay, amazon etc), fintech and insurance services. All these companies would like to access your fan base and offer your fans preferential pricing and services. All these can be integrated into your Loyalty Marketing Program and you can share in the upside of the transaction flow.
Using the principle in your program:
The greater the scale of your D2C activities the more opportunity you have to capitalise on this new channel and the associated deal flow generated from acting as a gateway between your fans, their purchasing power and the universe of companies seeking direct access.