Download the authoritative guide: Cloud Computing 2018: Using the Cloud to Transform Your BusinessWhy would the National Football League, which sells very little directly to fans and thus has few "customers," per se, spend big bucks to create a customer relationship management (CRM) campaign?
Evan Kamer, who as the NFL's senior director of new media is charged with thinking about ways to use the Web and e-mail for the league's benefit, says it comes down to two concepts: fan loyalty and better marketing.
|AT A GLANCE: The National Football League|
The company: The National Football League, the umbrella organization for 31 U.S. football teams.
The problem: Weak relationship to visitors of its Web page, with no significant database of fan information.
"The league is very interested in using technology to foster a relationship with our fans and develop an affiliation with our brand," Kamer said. "The more viewers we attract, the more broadcasters will pay for our games. And the more merchandise our teams sell, the higher the royalty rates we can charge our liscensers. It's obviously in our interests to build the most powerful connection possible to our fans."
Two years ago the NFL decided to create a marketing campaign via a weekly e-mail newsletter. While it had no specific numeric goals in mind, the idea was to provide fans with an information source while, more significantly, creating a database of committed NFL-niks, their team affiliations, and their click-through patterns at the league's Web site.
In the last two years, use of e-mail to sell to customers has exploded. Technology analyst firm Aberdeen Group of Boston says last year revenue spent on e-mail marketing almost quadrupled, and it predicts the market will exceed $1 billion within two years.
"The market has finally displayed the growth most leaders in the space have been predicting for years," said Kent Allen, an Aberdeen research director who recently authored a report on the practice. The reasons aren't complex: e-mail marketing is cheap, relatively simple to establish, and has proven an effective means of increasing sales once customers register.
When it started shopping for an e-mail marketing company, the NFL first eliminated CRM firms that wanted to profit from access to its fan list. Kamer said some companies sought to make cash off of their customers' databases by combining them and selling the information to others.
"We knew we needed to maintain complete control of our own database," Kamer said. "A subset of our newsletter subscribers opt in to get messages from our sponsors and partners, but we don't give the list away under any circumstances."
Ultimately the league settled on e-Dialog, a privately held Lexington, Mass., CRM firm that is growing steadily, thanks in part to a raft of sizable customer wins and partnership deals (including one this month with direct marketing power Harte-Hanks of San Antonio).
Kamer said the NFL liked e-Dialog for a couple of reasons: it advocated a moderated, three-year strategy to build and maintain fan interest in the newsletters; and it came across as what he called "very client-service focused. We knew we would get the level of attention we needed. We do football well, but anything else we need partners for. And e-Dialog's been a terrific partner."
e-Dialog started with a simple, text-only e-mail newsletter, mailed each week through the season (less often in the off-season). Fans could select a favorite team, then begin to receive more than two-thirds of the content, including offers of T-shirts and other gear, tailored to that team. The campaign kicked off with an online "Scratch and Win" promotion (giving away team gear) based on e-Dialog's partnership with RealTime Media of Wynnewood, Pa. E-Dialog also had a rewards program that gave more gear and other incentives in exchange for more information from the fans.
As e-Dialog collected fan data, including click-through info from the newsletter to the NFL Web site, its software algorhythms kicked in to make the newsletters increasingly sophisticated, including the generation of HTML versions that were much more personalized. Subscriptions grew from 300,000 in the first season in 1999 to 1.5 million last year.
The NFL pays based on the number of messages sent through e-Dialog's servers; e-Dialog maintains all back-end functions, including control of the database. Kamer says the investment has been more than worthwhile, as the league has been able to double typical response rates to retail offers, registering on average a 20 percent or higher response. (Banner ads typically generate a response rate of about 0.01 percent.)
The NFL has no plans to "monetize" its fan base. Unlike Major League Baseball, which this year began selling $10 annual subscriptions to listen to a season's worth of ballgames streamed onto its Web site from each team's audio broadcast, NFL.com will continue to provide live audio streams for free.
"It's just a different philosophy," Kamer said. "We make so much money in the NFL (mainly through the multi-billion sale of broadcast rights) that it would hardly be worth the $2 million we could get by selling to 200,000 subscribers. We'd rather provide the games for free to a million or more fans and generate goodwill."
But the league needs no direct cash to prove that its CRM investment has been worthwhile, Kamer said: "We're very pleased with the growth, and we expect to continue to grow. With almost 8 million people visiting our site each month, there's no reason we can't get the newsletter subscriptions up higher."
Aberdeen's Allen, meanwhile, predicts a slough of merger activity among e-mail marketers in the coming months: "The next stage of strong growth will see increasingly sophisticated online marketers looking for more complete offerings that allow them to take their e-mail marketing initiatives to the next level -- and that means increased sector consolidation."
That means businesses should shop carefully to ensure their CRM firm will be around over the life of their campaigns. Then again, as the NFL has proven, those campaigns don't necessarily need much time to flourish.
Gavin McCormick is managing editor of Datamation. Contact him at email@example.com.