Eye on ROI: How sports clubs can improve Fan Lifetime Value

Originally posted by Maria Florencia Zambianchi, Growth & Digital Marketing Specialist at Sportian.

Sport is wildly popular: at a rough estimate, there may be 4 billion fans around the world. That’s almost double the amount of people who own a computer, and nearly as many as own a bank account. With that kind of following, fan engagement should be the least of the industry’s worries. So why does it continue to be such a challenge?

The need to increase returns from the fanbase (Fan Lifetime Value) is one that sports clubs frequently express. In a direct sense, most clubs are only offering tickets and merchandise, with annual season tickets restricted by venue capacity, which means most receive a fairly limited income from fans. Meanwhile, sports content generates strong recurring strong revenues for many other industries. Brands who integrate sports into always-on digital campaigns, for example, are generating millions in value. As a result, clubs feel like they are missing out on the bulk of the time and money that their fanbase is spending on sport.

To redress the balance, clubs have two options: increase the price of tickets and shirts (a short-term measure, upsetting fans in the process) or invest in a digital ecosystem where they can provide fans more of the content they are looking for, increasing opportunities for engagement, data capture and monetization.

The digital approach helps to create a direct link between club and fan, making fans feel part of the action while allowing clubs to demonstrate a new base of ‘monthly active users’, a term that will capture the interest of sponsors. It can feel like a big task, but if approached in the right way, can be remarkably quick to set up and benefit from.

Digital Fan Engagement: Six Steps for ROI

The first thing to note is, digital fan engagement does not mean turning on digital channels. There has to be an underlying strategy, otherwise you will be offering an inconsistent experience, losing fan data to third party providers and generally failing to get to know your audience better.

For an end-to-end strategy that boosts revenue, there are seven key steps to follow:

1. Determine commercial objectives across all club departments, in order to measure success from all campaigns

2. Get a review of current digital assets to determine their revenue potential: is there an opportunity to add subscription, personalized advertising, capture new data that can be monetized through different actions?

3. Establish online spaces, focusing on specific platforms where you can offer hyper-personalized content and fans can deepen their engagement. One platform with a great content strategy beats 20 platforms with poor or sporadic content every time

4. Bring in analytics platforms that can constantly review the first-party data that fans are sharing in order to shape your decision making

5. From this data, generate new, personalized offers that start to monetize this traffic. Fans constantly state that they prefer receiving personally relevant content to engage with, particularly as it removes the need for upfront subscriptions or paywalls to content.

6. With your ecosystem now established, open negotiations with sponsors (new and existing) where you can demonstrate the new potential to reach fans in a multi-channel, personalized way

This approach goes much further than digital advertising: it’s a basis for owning the entire fan relationship across digital channels and understanding their behaviors, allowing you to refine your strategy over time. In recent months one client has reported a 220% increase in Fan Lifetime Value from its streaming platform, and others have set up a series of gamification platforms that add a whole new dimension to their ecosystem, boosting engagement both during live matches and throughout the rest of the week.

Once implemented alongside your ad server, you start to enter into a virtuous cycle with your fan engagement, boosting Fan Lifetime Value while giving them what they want. As you serve more personalized content and offers, the fan interacts more and becomes a recurring user. The more recurring users, the more income is generated via the ad server, leading to higher income from supporting sponsors.

Is there a risk of being too salesy here and turning off the fan? Not if you follow the fan data to deliver content that chimes with their interests. According to Deloitte, 70% of fans are more likely to purchase from a brand that personalizes the customer experience. So you’ll be giving fans more of what they want, and getting more from them in return.

Clubs are acutely aware that sport belongs to the fans, and many are hesitant to put this relationship in jeopardy by attempting to monetize in a way that could come across as aggressive or alienating. But by not acting, we are missing the opportunity to show these fans how much they really mean to us, not to mention the chance to bring new fans into the fold.

In an era of digitally-driven entertainment, there is a clear need to diversify club revenue streams in order to capitalize on the near constant consumption of sports content around the world. Clubs are not passive observers to this trend; they are a key source of passion for billions of people. And where there is passion, there is opportunity.