Sports Business

Sports business: Using targeted promotions to earn more dollars

Sports business: Using targeted promotions to earn more dollars

In Monday's episode of National Public Radio’s (NPR) Fresh Air Joseph Turow, professor of communications and associate dean for graduate studies at the Annenberg School for Communication at the University of Pennsylvania, ominously "Warns That Brick-And-Mortar Stores Are Watching You."

While this may seem a bit like the real-life equivalent of "Big Brother" from George Orwell's book 1984, Turow is describing the reality that the tracking companies do in e-commerce has moved more fully into the offline stores. Using technology including mobile applications, iBeacons, loyalty cards, geo-targeting, and geo-fencing companies have more information about customers in-store buying and behavioral patterns. This enables companies to design targeted adds and promotions specifically tailored to customers that can increase the likelihood of them making a purchase.

While the ethical implications of this activity would require and entirely separate blog post, Turow and host Terry Gross discussed an important idea that comes from having this technology. In the past, companies have focused on rewarding and retaining loyal customers. Those are the customers that keep coming back and buying a company's products or service offerings. Because the cost of keeping a customer has been much lower than attracting a customer it would seem to make sense that companies would want to focus on keeping the customer's they have.

However, this may no longer be the optimal strategy for maximizing revenue growth. Instead, companies should be focused on the marginal customer rather than the most loyal customer. A loyal customer is loyal for a reason – he / she likes the company's service offerings. Why spend money on advertising and promotions if that person is already likely going to buy the product anyway?

Instead, targeted promotions should be focused on customers that will only make a purchase if they are influenced in the right way. For example, let's say a customer is indecisive about buying a pair of jeans. In the past, this customer may have tried a pair of jeans on and then left the store without purchasing them. Now, a customer can download a company's app to access additional content, deals, and other helpful information. In return for delivering these benefits the company can receive information from the app that shows the location of the person while he/she is in a store. It can then use a geo-fence, a virtual fence that surrounds a geographic area, to determine when a customer leaves a specific geographic area. If this customer leaves the store without making purchase after spending a certain amount of time (i.e. the time to try on the jeans) then the company could send a targeted ad saying that the customer has 15 minutes to come back to purchase the jeans at a 15 percent discount. Essentially, companies now can identify "disloyal" customers and then attempt to bring them back to stores to make purchases.

Using technology to reward "disloyal" customers is something that sports organizations need to increasingly focus on given the demands of the business. More specifically, there are loyal fans that are going to buy tickets, watch games, and purchase merchandise even if they do not see any advertising from a team. These customers add significant value and should not be ignored. However, sports organizations want to focus on targeting the marginal customer using new technology to encourage ticket sales, in-venue purchases and increase game viewership.

The added benefit of using technology and customer outreach in this way is that it should increase sponsorship revenue as well. Not only can sports organizations use targeted promotions to help their current sponsors expand reach, but organizations can also show how these targeted marketing efforts cause lifts in purchasing. For sports teams, clearly communicating how sponsorship/marketing assets are used to create a lift in sales provides powerful evidence of how similar tactics can drive new revenue for partners. Rewarding "disloyalty" seems counter-intuitive, but there are many ways that targeting marginal customers should lead to substantial revenue growth.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.

Kaplan: Chet Coppock's impact on my career

Kaplan: Chet Coppock's impact on my career

The death of legendary Chicago sportscaster Chet Coppock has stoked many memories for me because of the lengthy history he and I had, particularly the huge role he played in my life. I would not be writing this nor would I be broadcasting on radio and TV without him taking me under his wing and giving an inexperienced kid from Skokie a chance to be on the air in Chicago.

Prior to entering the broadcasting profession I was a college basketball coach at Northern Illinois University from 1982-86. Like so many in the coaching profession, I lost my job when my head coach lost his job and I wondered aloud what the heck I was going to do with my life. I knew I had to be in the sports world and I knew deep down that I wanted to be on air. I started a college basketball recruiting newsletter that coaches and fans subscribed to and as I tried to market it I sent a letter to the biggest name in Chicago sports broadcasting that I could think of, Chet Coppock. He was a fixture on radio five nights a week in CHicago.

I distinctly remember walking into my house and seeing the message light blinking on my recorder. "Hey David, okay kid I'll give ya a shot! Tonight, let's talk college basketball. Bring your 'A' game! This is Chet Coppock from Coppock on Sports. Call me back!"

Wow! I was actually going to be on with the one and only Chet Coppock? The Big Rock Candy Mountain himself? I knew it was a big opportunity but I had no idea at that time that that phone call would change my life forever. Chet Coppock gave me a shot and he would become the single biggest professional influence in my career. Regularly he would have me on to talk about college basketball and the recruiting world. DePaul and Illinois basketball were hot topics.

It was always a huge thing to be on his show.

Fast forward to March of 1989. It is a Tuesday night, two days before the start of the NCAA Tournament, and I get a call from then-University of Arizona assistant basketball coach Kevin O'Neill, who was then and remains one of my closest friends in the world. K-O, as he is known, calls me in the early evening to tell me he has a great source telling him then-Michigan head basketball coach Bill Frieder is going to be named the new head coach at Arizona State the next day.

After I make a handful of phone calls to confirm the story, I call Chet.

He is on the air hosting the Doug Collins show, the head coach of the Chicago Bulls at the time. Chet comes to the phone during a commercial break and I tell him my scoop.

"I'll put you right on but if you're wrong I will bury you in this town and you will never get a broadcasting gig," Chet said. "Do you still want to come on? Do you feel confident enough in your story?"

Yes, I told him.

I go on the air, reveal the news and Collins tells me no way that is going to happen. He is a former assistant coach at Arizona State and he, like many others, did not believe the story was accurate. 

The next day the story breaks and the USA Today credits "Coppock on Sports in Chicago."

From that day forward Chet was a huge influence on my broadcasting career and he opened doors for me that I would never have been able to open myself.  Without him I would never be doing what I am doing today.

Rest in peace my friend. You will always be remembered as a legend.

NBC Sports Chicago announces multi-year media rights deal with White Sox, Bulls, and Blackhawks

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NBC Sports Chicago

NBC Sports Chicago announces multi-year media rights deal with White Sox, Bulls, and Blackhawks

STAMFORD, Conn., and CHICAGO, Ill. – January 2, 2019 – NBC Sports Chicago and the White Sox, Bulls and Blackhawks today announced a multi-year media rights deal that provides NBC Sports Chicago with exclusive local, multi-platform media rights to present game coverage of all three teams starting with the 2019-2020 season. The deal is subject to formal documentation and pending MLB, NBA and NHL approval.

NBC Sports Chicago and NBC Sports Chicago+ will be the exclusive regional home for all regular season games, pre-season/spring training, and the first round of post-season coverage for the Bulls and Blackhawks. This new agreement also enables the continuation of all games to be streamed on NBCSportsChicago.com and the MyTeams by NBC Sports app.

“The Chicago White Sox, Bulls and Blackhawks have provided countless memorable moments for this city’s fans, and NBC Sports Chicago has been dedicated to immersive coverage of each and every one,” said David Preschlack, President, NBC Sports Regional Networks and Platform & Content Strategy. “This is a significant agreement, and we are proud to continue to provide the most comprehensive, multi-platform coverage of these historic franchises.”

“We are very pleased to extend our relationship with our partners at NBC Sports Chicago,” said Jerry Reinsdorf, Chicago Bulls/White Sox Chairman. “In addition to being the experts in consistently delivering the finest game and surrounding game coverage in the business, it is their year-round commitment to providing our fans with innovative and entertaining multi-platform content that makes NBC Sports Chicago among the very best in the regional sports industry. Chicago sports fans are the greatest, and we are pleased that this agreement allows for the very best access to Bulls, Blackhawks and White Sox live action and content.”

“Blackhawks fans should be very excited that we are continuing our partnership with NBC Sports Chicago. In addition to raising the bar on our game day broadcasts, NBC Sports Chicago has elevated non-game day television coverage and evolved their digital and social media platforms into some of the most viewer-friendly in the industry,” said Rocky Wirtz, Chicago Blackhawks Chairman.