The business of sport is faced with a choice. Adapt to meet the needs of a more sophisticated and demanding generation of fans (who, for the sake of clarity, I’m going to refer to as consumers from this point forward), or suffer a slow and painful death.
Smart data capture and analysis helped the likes of Facebook, Netflix, Snapchat, Spotify and Uber win over these consumers (including the infamous Millennials as well as the emerging Generation Z).
These tech behemoths balance production on one side (the Snapchat publishers or Netflix content producers) with consumption on the other (the Snapchat users or Netflix subscribers). Their ability to stimulate production and consumption is driven by data collected from both sides and the value of their platform grows with every new active user added.
Every one of the 4 million likes per minute generated on Facebook helps Facebook deliver more (targeted) value to users and advertisers. The same goes for Spotify every time someone subscribes to one of their 2+ billion playlists or for Google every time one of the 3.5 billion daily searches is conducted on their platform.
The business model of sports is not comparable to that of Facebook. However, the value in capturing and leveraging data to drive stronger consumer and commercial relationships (both of whom I will now collectively refer to as customers) is no less significant. In a world dominated by digital media, those who don’t understand their customers intimately will lose relevance. While (live) sport in general is likely to remain as relevant as ever, those properties that are slow to embrace this view, will become increasingly vulnerable.
The sports business needs to change and must view this transition as one almighty change management exercise.
According to the experts (including Professor John Kotter), successful change management starts with a clear vision for change, involves removing barriers to change and is reliant upon securing and communicating quick wins.
What can the business of sport do to make this transition?
Image above: Kotter’s (2014) 8 Step Process for Leading Change
Look outside the sports business for expertise
One challenge the sports industry faces in making this change is a lack of collective expertise in data-centric marketing.
As less sophisticated users of data, the business side of sport is not ready to recruit leading data scientists. However, a recent job ad for a data science position at Spotify gives some idea of the pivotal role these organisations see data, analysis and insight playing:
“you will study user behavior, strategic initiatives, markets, content, and new features and bring data and insights into every decision we make. Above all, your work will impact the way the world experiences music”.
In sport, the NBA has recognised the value of recruiting data expertise from outside of the industry for roles in their recently formed Customer Data Strategy Group.
Identify and challenge silos
Channel silos can be a challenge to break for marketers in sport and beyond. Consumers are channel agnostic and don’t care less that a sports property might have separate teams for digital, events and marketing/CRM. Mayur Gupta, a leading marketer at Spotify, recently called this the “single biggest opportunity and the single biggest challenge” for marketing today.
Breaking internal data silos is an absolute must for sports properties to generate the kind of insight required to understand and meet the increasing demands of emerging generations of consumers. Organisation-wide collaboration is key to identifying and effectively analysing relevant data from digital and non-digital sources.
Get back to marketing basics
Let’s forget about technology for a moment. Age-old segmentation, targeting and positioning strategies will continue to play a central role in driving this change and delivering value to consumers and commercial partners. However, understanding your customers is only part of the problem. Deciding which ones to focus your limited resources on, can be even more challenging.
Here is another insightful quote from Spotify’s Mayur Gupta: “as a brand, you bleed twice – first, you pay more to acquire that user, then you pay even more to retain someone who never wanted to be there to begin with.”
Sport can’t continue its mass marketing approach for much longer. Its becoming a cliché but one size increasingly fits no one.
Know your own customers better than Facebook!
While it’s entirely unfair to compare Facebook with sports properties, there is no reason why the latter, with clever mining and analysis of data from various sources, can form a better understanding of their own customers than Facebook could.
Why is this a compelling vision for change?
Because only by achieving this vision can sports properties hope to be able to understand how to connect with increasingly sophisticated generations of consumers and help commercial partners to understand the role sports properties can play in helping them achieve growth in a digital world.
8 step process for leading change, Kotter International
How Spotify Curated the Ultimate Playlist for Brand Growth, Advertising Age, March 2017
The NBA’s New Customer Data Team Wants More Global Fans, Advertising Age, April 2017
About the author of this post:
David is a Chartered Marketer with more than 15 years’ experience in international sports marketing roles. You can follow David on twitter (@davidgfowler) or connect on LinkedIn (linkedin.com/in/davidgfowler).