Clive Thomas, TEQONOMY, September 12, 2018
Introduction
To scale revenue, clubs and competitions are aggressively engaged in the globalization of their footprint — brands, assets, operations, channels and partnerships — to consolidate presence in existing markets, to penetrate new ones, and to maximize asset monetization efficiency. As presented in a conceptual framework by Gupta and Govindarajan, four of the five drivers of globalization are present in the football industry: the imperatives of growth and efficiency, global presence of customers, globalization of competitors. A sixth driver — talent acquisition — is not in the G & G framework but is present for many clubs.
This article presents a model for the global ecosystem for a club, called Club Universal™, that optimizes the impact of its brand, its relationship with its customers, and drives competitive advantage. A similar model exists for competitions.
Club Universal™ is a global ecosystem that empowers the individual to engage and delivers through physical and virtual means a virtuous circle of connect, engage, consume, reward and retain to maximize customer acquisition and retention probability and monetization frequency.
This ecosystem spans the global footprint of the club:
- Sports’ Campus — all spaces, structures, stadiums, museums, stores, sports and other events
- Development/Education Assets — academies and schools
- Retail Stores — all configurations
- Foundation — activities, programs and projects on a local and global basis
- Other projects and physical and virtual locations
In essence: there should be no physical boundaries to the reach of the ecosystem and it spans and synergizes all assets.
The long-term goal of Club Universal™: curate a global audience, loyal for a lifetime, that engages and consumes frequently, wherever they may be, from points of engagement both physical and virtual.
Pillars
Club Universal™ is a digital platform built on five pillars:
- Club Society — a societal concept of belonging — more than a member, more than a fan — that grants access to the value of the ecosystem and the loyalty program that incentivizes and rewards engagement and consumption.
- Club Aware — cognitive intelligence — identifying the person, their preferences, their presence, their engagement and purchasing history, and shapes offers and experiences within context aligned to the individual.
- Club Credits — the currency of the ecosystem and the loyalty program.
- Club Rewards — the loyalty and reward program.
- Club Experiences — physical and virtual points of engagement and purchase that deliver offers and experiences shaped within context to align with the preferences of the individual.
The Club Universal™ is a digital platform expressed through an application on the individual’s mobile device that tightly binds the individual to the ecosystem. It is always “on”. It is always with the individual and readily accessible. It projects the club’s values. It informs. It educates. It facilitates engagement and delivers experiences. It incentivizes and rewards participation and consumption.
Club Society is the host of the relationship. It is a global society without borders that delivers exceptional value to capture all individuals that desire to affiliate or have some affinity, regardless of scope, with the club. It connects the club to individuals and individuals to each other.
This relationship:
- Permits the club to project its core values and identity;
- Curates the identity, preferences, presence/proximity and history of each individual;
- Shapes offers and experiences aligned with the individual’s preferences;
- Facilitates the engagement through Club Experiences wherever those experiences might be deployed in the world physically or available virtually;
- Rewards the individual for engagement, consumption and contribution to the society.
Club Rewards is the lubricant of the ecosystem. Each reward serves to further imprint the belonging and the habit of participation and consumption. It is the force that retains the individual, and incentivizes and guides the individual to preferred zones of engagement within the ecosystem
Club Aware knows the individual. Cognitive intelligence drives the enhanced experience and predictive analytics “sees” future trends and demands.
On entry to any location within Club Universal™ — a campus area, a museum, a store, a stadium, or proximity to any point of engagement or purchase — the identity of the individual is recognized, their preferences acknowledged, and the locale configured for the individual within the context of the space. Offers and experiences are shaped and presented that align with the individual’s preferences. Engagement with the experiences, features and functions of the space are enabled and facilitated through the mobile device. Tracking of an individual through a space, patterns of engagement in combination with individual preferences permit the ecosystem to be optimized.
Facilitating consumption are Club Credits providing a centrally managed, currency agnostic means of value pricing and exchange. Credits can be earned as rewards for participation and consumption or loaded on the individual’s account, prepaid or paid on demand through registered and pre-authorized payment methods.
In combination, Club Aware, Club Credits and Club Rewards drive and deliver frictionless participation and consumption within the ecosystem.
Club Experiences range from the simple to the sophisticated; from the purely physical to the purely virtual; across all sports, cultures and ages. They deliver value to the individual and wherever possible empower the individual to contribute value back into the ecosystem. Experiences can be for the individual, for the family, or for a larger social group. Presence at a stadium, or museum, or store is not essential when those experiences and services can be delivered virtually bridging the barriers of distance. Experiences are shaped to the individual’s preferences within context.
Project drivers
The club’s strategic plan dictates the scope and scale of the ecosystem, the investment required, the commercial revenue targets dependent on the ecosystem, and the time-line for its development and operational phase-in. Within the plan, the drivers of the project are: forecasts and targets for revenue, costs and free cash flow; the moves by competitors; and the latent demand of consumers.
Strategic partnerships with technology and infrastructure leaders are critical to the success of the project through the minimization of risk and maximization of quality, utility, delivery and cost efficiencies.
Research and analysis of loyalty and reward programs across multiple industries indicates that:
- Customer Acquisition Cost = 6 to 7 x Cost of Retention
- Increasing customer retention by 5% increases profits by up to 95%
- Conversion probability: Existing customer = 60 to 70%; New Prospect: 5 to 30 %
- Existing customers spend 67% more than new customers.
There are forces intrinsic to loyalty and rewards programs that lead consumers to greater levels of consumption with higher levels of frequency and efficiency.
The five pillars of the Club Universal™ ecosystem harness these intrinsic forces to maximize customer acquisition and retention probability and monetization frequency through a virtuous circle of connect, engage, consume, reward, and retain. The result: diversified commercial revenue streams that scale to accelerate returns on investment and thereby fund future investments and operational costs in the sports and business domains.
Club Universal™ … connecting the club to people, every day, every way, for a life time.
References
Anil K. Gupta, Vijay Govindarajan, ”Managing Global Expansion: A Conceptual Framework”, BH043, Business Horizons, March – April, 2000.
“Retention Science, “Customer Retention Should Outweigh Customer Acquisition”, accessed March 31, 2018, https://www.retentionscience.com/blog/customer-retention-should-outweigh-customer-acquisition/
Colloquy, “U.S. Customer Loyalty Programs Memberships Top 3 Billion for the First Time, 2015 Colloquy Census Shows”, February, 2015, accessed March 31, 2018, https://www.colloquy.com/latest-news/2015-colloquy-loyalty-census/
