It is important for every leading Premiership football club to operate an effective strategy for pre-season tours, friendly matches and tournaments. This can facilitate a range of positive benefits, but is not without inherent risks for the unprepared. Clubs engage in pre-season tours and friendly matches generally do so for the following reasons:=

• To help condition the playing squad for the coming season
• To extend the club’s brand visibility and connect with local fans
• To allow local sponsors the opportunity of activating against club assets
• To cultivate positive PR by engaging in local community projects
• To generate incremental revenue

So what are the key issues for a touring club to consider before loading their most precious assets onto a plane (I mean the players, not the directors) and flying off to some far-flung destination to raise their club colours high and claim dominion over the territory and its indigenous fans for themselves?

1. Understand and establish the key motivation for the activity. Make sure this is communicated throughout the club on both the playing and commercial sides.
2. Identify the territory and research carefully any competitive activity that might affect the granting of regulatory approval or local demand for tickets.
3. Identify and establish good working relationships with the regional and national regulatory bodies necessary to sanction the planned activity
4. Implement a rigorous approach to tendering for local promoters, particularly where there are cultural issues such as language and local customs to meet.
5. Develop an internal project team and a robust operational process with representatives from each relevant department of the club participating.
6. Develop a comprehensive security plan in conjunction with local security services, club resources and advice from HMG Foreign Office as appropriate.
7. Put in place a detailed strategy for broadcast rights and other media facilities, ensuring that a tour website is available for each territory.
8. Implement a sponsorship plan to establish a range of global and local sponsors with a suitable rights inventory to activate around the tour.
9. Plan local strategies for linking with local fans through membership and CRM initiatives prior to, during and after the tour.
10. Plan the ticketing pricing and distribution strategy carefully in relation to local preferences and customs.
11. Ensure that club merchandise distribution licenses are in place before the tour commences and that tour-specific merchandise is available in each territory.
12. Develop a programme of community activity, ideally to operate in conjunction with the national governing bodies or the local opposition club. 

A successful and sustainable tour strategy is therefore one that:-

• Establishes a brand presence in the market prior to the team’s visit through use of media, merchandise, sponsorship, CRM and local membership
• Forms a good working relationship with the regional & national associations
• Develops a strong portfolio of local sponsors keen to activate around the tour
• Leaves behind a legacy of social programmes to benefit the local community

Follow these guidelines and you can avoid many of the pitfalls that so often trap the unwary. Star Sports Marketing has the experience and capability to help you plan your tour, organise friendly matches and execute tournaments at home and abroad.

“So where is my million quid?” This was my welcome from the UK MD of a large Japanese motor manufacturer. It was my first week in my new role of Head of Affinity Marketing for a credit card bank and the MD was my first contact with the client-side. The pattern was set for many such meetings over the next few months as it quickly became apparent that my appointment gave opportunity for a whole industry of MDs unhappy with the level of their commission fees to vent their fury.

So why the unhappiness? Was it simply the natural outcome of an overly aggressive sales pitch suggesting the magical figure of £1m in commission fees would be easily attainable? Or was it just a wilful failure to accept the hard commercial reality that a fee of this magnitude can be earned only through intense marketing activity, effort and expenditure?

Whatever the reason, it is estimated there are over 5,000 affinity schemes operating in the UK financial services sector alone spanning the entire gamut of products from payment cards to savings accounts, loans, insurance and even mortgages. Other white label schemes operate widely in the energy, water and telecommunications industries and new players are emerging in the digital world from among sports portals in particular. It seems that many brands from business sectors as diverse as sports, charities, education, professional, commercial and financial can and do derive a measure of financial and brand benefit from their affinity relationships.

So what do those successful exponents of the black arts of affinity marketing know that my old adversary from Nippon did not? First, they understand the motivation of the organisation supplying the white label platform. Often, these businesses are much larger entities than the companies, if not the brands they host. They are the leviathans in the relationship and are eager to apply their established back-office services to affinity partner brands because they believe customers can be acquired more cheaply using partners’ distribution channels; sales values and balances will increase through the ability to cross-sell additional products; and retention or renewal ratios will rise and losses through bad debt write-offs fall, all as a consequence of the loyalty customers show to the affinity partners’ brand.

Aside from the sometimes inflated expectation of commission income, what key benefits accrue to the affinity brand owner from this unequal relationship? 

• Brand Exposure – affinity allows companies to project their brand image well beyond their standard in-house derived product portfolio and at lower cost.
• Brand Extension – affinity can extend brand reach into non-core areas without incurring the financial and operating risk from back-office services.

However, these benefits do not come without potential down-sides:-

• Approval Rate – white label suppliers are interested in acquiring high quality business at the lowest possible cost. Approval rates on products such as credit cards can therefore be low with a commensurate risk to brand image.
• Reputational Risk – if the product fails to live up to customers’ expectations in terms of value or service levels, the affinity brand will suffer.

While affinity marketing programmes continue to promise the potential of significant profits, albeit only to those enlightened organisations that take the trouble to research and understand the key parameters of the business, there will always be a queue of organisations ready to risk the reputation of their brands and enter the market. And as Ishmail once remarked, it’s not sensible to stand between Ahab and the whale.

Customer relationship marketing or CRM is often described as a journey and not a destination. However, all too often the CRM journey is plagued by long delays at check-in, turbulence on take-off, poor in-flight service and a bumpy landing. Indeed, research suggests that more than 50% of all CRM installations fail. Even the minority that are successful carry a high risk of unfulfilled expectations in terms of:-

• Costing more than anticipated
• Taking longer to implement than planned
• Delivering less functionality than specified

So given the unhappy history of CRM installations in this country, why are so many progressive sports marketing organisations eager to risk their finances and their reputations on another expensive CRM disappointment? One of the major factors in explaining the current state of play with CRM is the general lack of understanding among marketers and non-marketers alike of what exactly CRM is and just as importantly, what it can and cannot do.

CRM is not a marketing technique like one of the ubiquitous 4Ps that can be applied to leverage a business. It is a process that encompasses the management and organisation of legitimately held customer information and its intelligent use in order to present the right offer to the right prospect via the right channel at the right time.

Another common misunderstanding about CRM is that it requires only the most sophisticated and expensive computer technology. Certainly for businesses with many products distributing to customers in several countries and communicating through a variety of marketing channels, some form of IT system is required (but it need not be costly). The trick is to have a good understanding of your CRM ambitions and needs before you hand over your cash to the slick IT salesman.

The system used by Tesco with a footfall of 25m and a product inventory of 1000 stock units or by Amazon with call-centres primed to handle 50m customer orders on 4 continents are certainly at the leading and cash-hungry edge of technology, but is unlikely to be necessary or appropriate for a local sports club or merchandiser.

Even one of the most forward thinking, enlightened and professionally managed of our Premier League football clubs has fallen headlong into the CRM IT money pit. So from personal and bitter experience, I offer a check-list of dos and don’ts to sports clubs contemplating the lemming-like leap from the CRM cliffs of uncertainty into the IT sea of despair and disappointment

1. Prepare well. Set out your strategic objectives for CRM in terms of the end result(s) you wish to achieve and the budget you are prepared to commit.
2. Ensure that your effort is optimised across your business and that a company-wide perspective and consensus is achieved among key staff.
3. Clearly define your business going forward in terms of the scale of your marketing effort and the volume of data you are prepared to collect.
4. Set rules to govern the use of your customer data in terms of primacy, recency and frequency and apply them to each of your marketing channels.
5. Take professional advice to ensure your data management regime complies with data protection law in all of the territories you operate in.
6. Consider an IT solution only once all the above steps have been completed and you have developed a comprehensive business requirements schedule.
7. Use a tender process, request proof of concept and never, ever agree to adopt an untried big box IT solution in lieu of a sponsorship fee! 

Debt is the single most problematic issue facing football today. Or so you would think if you read the newspapers. The media are in a frenzy about Portsmouth entering voluntary administration, the Glazer family jousting with the Red Knights and the rival warring partners at Anfield briefing their respective PRs against each other. These stories make good copy and bring new readers to those sections of the papers traditionally turned two pages at a time by sports fans. However, they do so on a false premise. Debt is not necessarily a bad thing in itself. The key questions to be answered when assessing the long term viability of a sports club are not how much debt is carried in the balance sheet, but:-

• what is the cause of the debt and
• how much cash can be generated to service it

Compare the relative positions of Portsmouth FC and Manchester United. Although many of the players at the club are on loan and so have incurred no transfer fees, Portsmouth has borrowed over £60m to pay the salaries of these players who otherwise could not have been added to the team. In the case of Manchester United, the club can easily accommodate their player wage bill from record revenues of £271m in 2009. Their debt is a consequence of their owners using club assets as security on loans raised to purchase the club in the first place. The key to both situations is cash. That is, whether the cash generated is enough to service the debt. For Manchester United with their global fan base and average gate of 75,000 and Portsmouth with its ground capacity of 20,000, the answers are very different.

So what should sports clubs do to make sure they don’t fall into the debt trap? They should follow the advice of their grannies and not gamble on future success or spend more than they earn. Specifically, they should set a reasonable ratio of players’ wages as a proportion of club revenue (50% seems a reasonable figure) and manage within that budget. “But if we do that, we won’t be able to compete in our league”, chant the recalcitrant chairmen. Again, the answer is simple. Increase your revenue. Not every club has a global fan base to exploit, but then again how many clubs can claim to have genuinely worked their local fan base to its full potential?

There are several key revenue generating opportunities outside of the traditional ticket and hospitality activity that seems to occupy many clubs to the exclusion of all other commercial initiatives. These are:-

• sponsorship activation – many clubs have sponsors, but how many work with them in a true spirit of partnership to ensure that both sides get real added value from the relationship? This approach will reap rewards at renewal time.
• affinity marketing – most football clubs offer a branded credit card but how many really understand the key profit drivers of acquisition cost, cross-sell and retention. These can be leveraged to deliver incremental revenue.
• CRM – well-managed customer data has a value. This can be unlocked through attracting more lucrative sponsorship opportunities or by using it sensibly to promote products and services to fans in a timely manner.  
• membership and loyalty programmes – most clubs pay lip-service to loyalty and heir fans resent being taken for granted. A well executed membership and loyalty programme can help solve both problems.

 Increasing revenues is the best way to protect sports clubs against the dangers of debt.

The eminent and well respected CEO of a leading Premiership football club once refused to sanction a budgeted expenditure of £40,000 on a brand refresh project. For sure, £40,000 is not an insignificant dollop of cash even in a business where certain employees earn that amount in only a couple of days. However, it was not the amount per se that so concerned the CEO. His reticence was a consequence of his suspicion that there was no return to be had on the investment.

This scenario poses the tricky question: Can real value ever be achieved from an investment in brand marketing?

To get to an answer, we first have to define our terms. Brand marketing is the activity that utilises all of the properties associated with an organisation’s identity. This may include a crest or logo, a name or style and any verbal, graphic or pictorial design features (including colour pantones, textures and font styles) that when taken together present an overall image or expectation particular to a product or company.

The problem is that few companies with a well-defined brand image invest enough time or effort to manage and develop their property. There is a commonly held view, (particularly among the accountants who seem to run most businesses today) that investment in a brand is simply another clever wheeze by the marketing department to keep themselves gainfully employed. And yet for many companies, the corporate brand is their single most valuable asset. It may not appear on the balance sheet under an obvious heading, but it is certainly present albeit in intangible form.

Let’s revert to the example of our Premiership football club and list the qualities that underpin the global accessibility and recognition of its brand:-

Unprecedented success on the pitch under the guidance of a wise (if a somewhat irascible) manager of many years service; an enviable squad of players assembled by supplementing the product of a global youth scouting system with the expensive acquisition of established stars; a stadium and training facility that is second to none; an international fan base numbering hundreds of millions spanning the globe and all constantly exposed to TV, digital and news media hungry to promote the team’s name and glorious track record of success; a portfolio of corporate sponsors eager to lavish their cash in return for a little reflected glory; an unswerving sense of loyalty and affinity that can persuade even the most casual of supporters to consume every piece of merchandise and branded tat peddled by the club’s official Megastore – including club-branded mortgages!

Assuming these qualities are backed by a sensible and prudent approach to financial management (and that the club is not overly burdened by unsustainable levels of debt), there is every reason to expect the outcome will be substantial if not sector leading sales revenues and the generation of year on year profit growth to satisfy even the most vulpine consortium of corporate investors and PIK note lenders.

So how can we quantify the brand value of this fabled if not mythical organisation?

It’s easy really. Just sell the players, sell the stadium and the training facilities; sell the database of fans; sell all media assets and capitalise all sponsorship contracts. In fact, sell off every asset that appears on the balance sheet. Now, compare the total realisable assets of our sale with the market value of the club. The difference between the two figures is the value of the brand. In our hypothetical example the figure would be north of £400m. Now isn’t that worth an investment of £40k?