The overwhelming fear of being wrong

4 07 2011

Seth Godin has made an interesting post about a consumers underlying fear of being wrong, and how they behave as a result of it. His final sentence, that this is “the lone barrier almost every product and service has to overcome in order to succeed” is particularly relevant for the sports industry.

From a sports participants perspective, the fear of being wrong could be the fear of having:
– the wrong level of skills (too rusty to try)
– the wrong level of fitness (waiting ‘another week’ until they’re a little fitter)
– the wrong friends (not in the clique)
– the wrong gear (looking like a newbie)
– the wrong attitude (not wanting to be serious / competitive)

In developing, packaging and promoting participation opportunities, sports need to be considering (which means they first need to be asking) how current and potential customers feel about their sport. And the good news is that some sports are already creating some good practice for addressing these fears. Back to Netball helps overcome the fear of no longer having the right skills, as participants can all be rusty together. Likewise the different group speeds available within RunEngland Networks and SkyRide Local’s help people get over the fear of not having the initial fitness to keep up.

But until sports fully understand how current and potential customers feel about their sport (and the same person may have different perceptions/experiences, and hence fears, about different sports), they won’t be able to talk to potential participants in a way that addresses these fears. And until then, they’ll never know what they were missing!


Forget satisfaction, what’s your net promoter score?

13 05 2011

What’s your team’s/club’s/sport’s Net Promoter Score? Or put another way, how many of your current customers would actively refer you to their friends?

While debate rages about how accurately this measure can predict revenue growth, most leading companies still pay more attention to this measure than they do to customer satisfaction scores. Why? Because we’ve all claimed to be satisfied when a waiter asks for our feedback on an ordinary meal. But rarely have we then recommended that restaurant to our friends.

Net Promoter Score was in the London news this week, in an article about Metro Bank. If you’ve not heard of them, they’ve just opened their sixth branch in London and are owned by Vernon Hill. According to the article, Metro Bank have a Net Promoter Score of 97% – that means 97% of their existing customers would recommend them to a friend.

Now they’re still very young, but that’s still a remarkable number. For context, the reported score for First Direct (who have a strong history of growth through word of mouth) was 57%, for RBS was 10% and for Barclays was -35%. In Barclays’ case, that means 35% of its clients would actively dissuade a friend from using it.

From a sports perspective, it’s easy to think that all our regular participants would recommend us to their friends. After all, they must love the club/sport if they keep doing it. But if that were the case, every team and leisure centre would be experiencing astronomic growth!

So what would you need to do, to have 97% of your current customers wanting to recommend your team or sport to a friend..?

The 3rd place…

3 04 2011

I was reading the Starbucks entry on wikinvest the other day. The bit that particularly interested me was the short entry on Starbucks 3rd place – a market positioning based on delivering a differentiated customer experience that became a catalyst for growth within the coffee shop market. growth.
The entry reads: Starbucks’ success is due in large part to the trendsetting triumph of its coffeehouses as an informal and convenient “third place” outside of home and work, ideal both for informal meetings and a quiet moment away from the hubbub of daily life. Wi-fi internet access in all stores also makes it a place where customers can work. Book and music events also take place at Starbucks, in accordance with the company’s goal of making each location a community center of sorts to garner the loyalty of local customers.

It made me wonder whether sport can build on it’s current position, for some customers at least, as being their 3rd place between work and home. What Starbucks did wasn’t new, coffee shops were already a 3rd place for some. But what Starbucks did was build it up into a relevant and compelling customer experience, and one they could use to grow their whole market (not just their share of the existing market).

Golf is a sport that often combines business with sport, and team sports like football create social and community bonds around playing. But how could a sport deliver a customer experience – consistently across all it’s touch points – that set a completely new standard? What would it take for a sport to no longer be seen by its participants as an either/or to working or spending time with the family? Could it be West Wing-style mass jogging networking events, using voice to text software on an iPhone? Or family canoeing days that start with brunch at a cafe, and end at a cinema?

The answer probably isn’t either of those suggestions. But it is out there…

Sustainable business growth at Nike

26 03 2011

Last week, Nike announced their quarterly results. Constant dollar revenues grew 9%, with growth in every geography except for Japan. But it wasn’t the results themselves that interested me; but rather, how they explained their strategy for creating sustainable business growth.

Mark Parker, NIKE Inc.’s President and CEO, said “everything we do at Nike is based on delivering long-term sustainable growth. At the same time, we’re focused on delivering value to our shareholders in the near term. This is the balance you’ve come to expect from Nike, and it remains our commitment going forward.

We strike this balance by leveraging our significant competitive advantages, and chief among them are our authentic emotional connections with consumers, innovative product and retail experiences that lead the industry and a strong NIKE Inc. portfolio that gives us tremendous opportunities for growth and significant levers to drive profitability.

Consumer-driven companies with strong brands and compelling products will be in the best position to maintain their margins, and disciplined companies who are lean and focused on how they use their resources and who are aggressively seeking new ways to grow will prosper. Those who don’t won’t. In that sense, the roadmap for success in the future is no different than it’s always been”

Later in the call Charlie Denson, President of the Nike Brand, added: “As always, we’re focused on managing the business for sustainable long-term profitability. For the Nike brand, that means staying laser-focused on innovation, first at the product and brand level to drive the top-line growth and also driving innovation and discipline into how we run the business.”

While Nike is a multi-national commercial business, I believe there are some important messages here for the UK sports sector; whether the goal is increased profitability, more fans on seats or more participants on pitches, courts and roads.

Nike see their competitive advantages as including “authentic emotional connections with consumers, [and] innovative product and retail experiences”. And the Nike store environment and the style and tone of Nike’s services and communications would confirm this. They lead the market by listening to what consumers say about how they play sport – what it means to them, how it makes them feel and how they want to ‘consume’ it. They’re not bound by the rules of each sport, but rather by the needs of their consumers.

Many people associate Nike with product innovation, whether it’s Nike Air in the 80’s or Nike+ in the 00’s. But innovation also runs through how they manage their business processes and costs. Innovation and discipline is a powerful combination, as the likes of the Barcelona football team or the British cycling team regularly demonstrate. But how often do these twin traits of innovation and discipline emerge within the organizations and processes running sport?

So according to Nike, sustainable business growth comes from:
– being a consumer-driven company (clarity about why you exist, and where your strategic priorities are)
– creating authentic emotional connections with consumers (knowing who you exist for, and why you are still relevant to them)
– delivering innovative and compelling products (aligning what you provide to the people you exist for)
– providing innovative retail experiences (differentiating how you deliver your innovative products)
– embedding innovation into all aspects of the business (creating continuous improvement in both what you produce and how)
– being disciplined, lean and laser-focused (all business processes have a clear and relevant purpose, and are carried out both efficiently and effectively).

These traits exist across elite sport, and no doubt also reflect Nike’s origins with Bill Bowerman and Phil Knight. But they are just as relevant to how sports organisations across the market place could be operating. Can you share a good example of how these principles are being applied within the UK sports market…?

Governing the business of football – the A-League and English Premier League search for the same answers

21 04 2010

Football club ownership is in the news in both hemispheres at the moment. In the UK, Manchester Utd and Liverpool fans are both protesting about the investment approach taken by their American owners. Co-owners Tom Hicks and George Gillett have decided the business culture clash has gone on long enough, and put Liverpool up for sale. But the Glaziers, at least publicly, have no plans to sell despite the on-going green and gold protests from Utd fans.

These owners under seige come from a US sports model where debt is heavily leveraged against the club’s assets. But the average UK fan prefers that owners dip into their own personal wealth to support the extravagent player purchases that defy business logic. Last financial year, Chelsea reduced their losses to 47 million pounds (down from 70 million), while Man Utd actually made a pre-tax profit of 48 million pounds. But while Utd’s finances remain supported by heavy debt, Chelsea’s have been propped up by their owner Roman Abramovich. In fact Chelsea can now claim to be effectively debt-free, after Abramovich converted all his interest-free loans to the club into equity. Strangely, I can’t recall hearing about Chelsea fans protesting about the amount of money that Abramovich is personally losing, despite the Daily Mail last year estimating his investment at over 700 million pounds.

After taking over West Ham earlier this season, David Gold told the Daily Telegraph “The place was a car crash. “Every page we turned in every document revealed yet another problem. It was the worst set of figures I have seen. ”You have to say I’m certifiable – potty. There’s no other business like this. In fact that’s a misnomer, it’s not a business. We’ve lost the plot. It’s insane.” The current plight of Portsmouth, Cardiff and Crystal Palace (and before them Bradford, Wimbledon and many more clubs in the Football League) shows that the insanity is widespread and lessons have yet to be learned.

The basic principles of profit and loss haven’t been ignored to this degree since the dot com boom allegedly changed the rules of business. It did in many ways, as the music and publishing industries will testify. Yet it still proved that consistently running up costs higher than revenue eventually leads to collapse – as the glorious rise and fall of Boo proved.

In a bid to take clubs back to business school, Michel Platini has launched UEFA’s answer, a club licensing discussion paper. If implemented, the proposal marks a significant change in European football. It brings in an new era of regulation that franchised sport in Australia and the USA already knows well. According to UEFA, the future is marked by “discipline and rationality”. and they believe, it would stop clubs such as Portsmouth going into administration by forcing them to live within their means. While not easy to achieve, this is a fine a necessary goal that reflects business rather than sports reality.

The UK’s politicians have also got in on the act, with Prime Minister Gordon Brown saying recently that debts at some clubs were “too high” and warning them to “look very seriously to their responsibilities to supporters”. Labour are taking this issue seriously enough to include football reform in their election manifesto, claiming that they want to give football back to the fans. The proposals under review include clubs having to give as much as 25% of the club to fans. UEFA’s Platini has applauded this approach, saying that supporters were the only people who had a genuine “identity” with clubs.

Fans owning clubs is not new, with fan groups called “socios” owning 25% of 4 of Spains top flight clubs. But even there all is not good in the business of football, with players threatening to strike in a bid to receive unpaid wages. According to Michel Platini, the German model is the way to go, with 51% of each club being owned by the fans.

So what does all this have to do with the A-League? Well club ownership is the talk of the town here in Oceania too. A-League clubs Adelaide and Brisbane are already under FFA control, and in the last few weeks the two most recent expansion clubs – Gold Coast and Queensland Fury have come under the microscope. The Gold Coast have struggled to connect with their local community. Average home crowds were 4,488 despite the club boasting some big name players and being in the running to win the league until the very end. Meanwhile, owner Clive Palmer raised the ire of fans and the FFA with unpopular moves to restrict ground attendances in a bid to control the finances.

Up in Townsville the Fury also had a big name signing, ex-Liverpool player Robbie Fowler. But their maiden season didn’t fare as well, as they narrowly avoided finishing bottom of the table and attracted an average of 5,884 fans. After having put AUD $2.5 million into the club, sole investor Don Matheson can no longer sustain it. While this isn’t a good situation, it has at least opened the FFA’s eyes to the situation, with CEO Ben Buckley saying “to be successful long-term there needs to be wider community and corporate support for North Queensland Fury and it cannot be left to one person to drive the club”.

Giving the game and the team’s “back” to the fans is a popular approach at the moment, but on it’s own it doesn’t guarentee that the business itself will be run anymore successfully. Alongside the community support and involvement is required top level financial governance, a customer-focused business model and strong leadership. It’s not a new approach, but unfortunately it is still not common sense.

Sports Marketing 2.0 – when being a regular fan is not enough

23 07 2009

Ok, so you’re a fan, but are you a citizen?

This is the question asked by the Phoenix Suns NBA team, who are doing some intersting things to build a tribe through social media. The question is on a banner that advertises, “a social network built just for real fans” (their emphasis).

Planet Orange includes a live twitter stream from 25 Suns staff, including the mascot (“who can’t speak but can type”) and Shaquille O’Neal. Shaq is regularly interacting with fans through twitter. So much so, that the Suns threw him a virtual birthday party where fans were encouraged to create a happy birthday video and send the link to him via twitter.

Back at Planet Orange, fans are encouraged to register as citizens, create blogs, join groups and share audio, video and photos. These include Fan Art – mashups of photos and drawing that other fans can share and use. And if all this isn’t enough engagement for the real fans, the Suns also have a Facebook fan site where citizens can share more comments and media with over 46,000 other facebook citizens.

At the centre of the Suns social media campaign is Amy Martin, aka PhoenixSunsGirl, seen here being interviewed on the Suns own TV channel.

While it’s easier to think of sports teams than businesses having fans, this level of customer engagement (Shaq has over 1.5m followers on Twitter) must have some insights for organisations in other industries. What type of content would  an airline or retail store need to share, in order to get real customers wanting to sign up and become flag-bearing citizens of their brand?

How would customers reinvent your product?

12 07 2009

Too often companies and sports teams take their performance and competition for granted, plodding along with little thought about serious innovation. It’s happened at organisations as diverse as Starbucks and the All Blacks.

Starbucks’ confidence had them rapidly expanding their footprint, rather than evolving their relevance as “the third place”. Equally the All Blacks threw out the innovative conditioning programme and ‘rotation policy’ that developed a large squad of world class players, and within 12 months are lamenting a lack of depth within their squad.

Three recent stories from google, demonstrate that to stay competitive requires a different mindset. One where you consider yourself the challenger, and never the champion.

First up, google took a video camera to Times Square in New York, and asked what many consider a simple question – “what is a browser?”. Yet the responses (see video below), demonstrate that we should never take our customer’s understanding of our product for granted.

Next google have given a sneak preview of google Wave, which has been described as what email would be like if it was invented today. And then last week, google announced that they are developing an operating system, Chrome OS, to rival Windows. This again sounds like great challenger thinking – “what would an OS be like if it was invented today”.

But stretching into operating systems also risks falling into the Starbucks trap. In trying to be everything to everyone, they could leave themselves open to a competitor re-inventing their core product. And ironically, if the Bing search engine takes off worldwide, that challenger could be Microsoft.

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