By: Neil Joyce, CEO & Co-Founder of The Customer Lifetime Value Group
In our inaugural Fan Relationship Index (FRI) report, we take a look at the various relationships that football clubs have with their fans. If we needed a reminder about the finely balanced relationship between clubs and fans, then the reaction to the announcement of the European Super League (ESL) made it clear. Clubs are not brands; fans are not customers. The FRI report and points below laser in on looking beyond today’s revenue and way of operating to focus in on tomorrow’s revenue models which are predicated on Data, DTC and fan-based engagement platforms. Our favorite insights are captured below focusing on today’s pressing needs vs tomorrow’s revenue, becoming today’s. For additional information please click here to download the full report.
Today’s pressing needs : Repair Trust and Create Value
1) There is a new standard of loyalty and the adoption of the Fan Relationship Index is the first step to sustainable competitive advantage.
The initial decision by the Big Six to join the ESL has put club revenue at risk as a result of the fan alienation it has caused. From data collected from YouGov, 28% of UK Big Six fans have expressed that plans for the ESL have reduced their trust in their favorite club. In fact, failure to take action to rebuild relationships with core local fans in the UK could see a 10% hit on their revenues – equating to £221 million in total. More than ever, understanding what is going to keep fans happy, engaged and loyal is critical.
2) Start thinking about the value of fans and the differences in them by segmenting, rather than tools to show your global reach. Invest in understanding their needs and wants. Had clubs looked at it through this lens, would they have knowingly risked another 10% of revenue? We do not believe so.
The FRI report highlights what football clubs are missing out on – undervaluing and underinvesting in relationships with their fans. Through research conducted by YouGov, we were able to uncover that 28% of Big Six fans have reduced trust in their team due to ESL plans. Resulting in 19% of fans less likely to buy merchandise from their favorite club. On the flip side, 26% of fans expressed interest in rewards programmes and 25% also expressed interest in purchasing shares. So how do clubs gain back the trust of fans while expanding their touchpoints? Manchester United is staying ahead of the curve by joining forces with Adidas to give fans unique access to the club. Focusing on fresh content and making “fanatics” feel like true VIPs can unlock revenue and touchpoints for engagement.
Tomorrow’s Revenue, Today : Fan-Centricity is the change agent for sustainable growth
3) Clubs can see 20% growth in overall revenue by directly monetising global fans.
Understanding different market complexities and the needs of global fans is critical if clubs are going to tap into growth potential. We make comparisons between UK, US and Indonesian fans to see how expectations differ and offer insights on what steps football clubs should take to secure the long-term loyalty of fans and how that can translate to a global perspective. Scaling current TV channel, content assets, player and game engagement data into products and services represent low hanging fruit with the right focus and partnerships in place.
4) Clubs are uniquely positioned to unlock new revenue streams by becoming a multimedia platform.
Clubs are battling with how to answer two critical questions :
How to have a relationship with fans outside of Google and Facebook?
How to have a relationship with fans outside of relying upon broadcasters?
We were able to analyse that 48.5% of global fans interact with their clubs’ social media channels. Imagine a club with 100m+ followers on social media providing a value proposition to those audiences that meant they accessed content directly. For instance, as reported in The Guardian, data from Kantar Media shows that more than 1.3 million subscribers joined streaming services such as Amazon Prime, Netflix and Disney+ towards the end of 2020 (Sweney, 2021). Of this 1.3 million, 49% joined Amazon, equivalent to 650,000 new subscribers.
In creating a digital ecosystem owned by the club and the fanbase, there is an opportunity to drive dialogue between club and fans, directly, and offer premium content with real meaningful value to them, rather than allowing 3rd parties, such as Facebook and Google, to control that and also pay them £0.25 in every £1.00 for any monetisation of that inventory.
5) Optimising your sponsorship yield using your own first-party data can drive 15% revenue growth.
We took a look at what role sponsorships now play. If clubs took a look at their own data they could be driving 15% incremental revenue growth across key areas of sponsorship and partnerships beyond monetising on a volume and or limited set of areas like the shirt, ground and training ground events. By taking a step back and looking inwards, brands will be able to determine if better alternatives need to be explored in order to drive stronger ROI against sponsorship, partnerships and inventory yield initiatives.
You can download the full report with our recommendations for football clubs here.
Want to talk to us about the Fan Relationship Index, or how we can help you unlock the value in your fans or customers? Get in touch.