Can a Team's Marketing Win If the Team Doesn't

How often do fans forget that sports is a business?  Being in the midst of the high passion that characterizes the NFL playoffs, it's easy to forget that each of these teams are companies that have to deal with profit and loss and employ small armies of front-office professional who, while they don't wear uniforms, are still critical to the team's success. 

The same is true for any sport at just about most any level.

So why a Dolphins picture for this article?  I was watching a sports business show on YES last summer when they interviewed Mike Dee, who recently took a VP job with the Dolphins and was facing the fact that the team he just joined (after a successful stint with the Red Sox organization) trails the league averages not so much in game statistics, but rather in two other important metrics: revenue per dollar of debt (especially since the Dolphins were bought with a lot of debt) and revenue per stadium attendee.  Furthermore, their celebrity ownership raises the possibility of the franchise being successful in ventures outside of sport.

First off, let's validate the reality that winning cures all.  A franchise that's successful on the field/court/ice has little trouble attracting fans and generating revenue, even in the absence of an effective marketing program.  Consequently, a losing team will most certainly lose money, even in the presence of a well-conceived marketing strategy.

But does it always lose?  Keeping a professional sports franchise profitable (or, even, an collegiate athletic department) when its teams are losing is a tall task with no golden solution.  

But if we can identify some concepts upon which to build a strategy to keep a team financially healthy, maybe a plan can be developed by teams like the Dolphins to remain financial viable, or even profitable.  And a lot of these come from standard business marketing.

Here's what I'm thinking.

Awareness of where the team stands with regard to the other alternatives available to the customer market: In Miami, for example, there's the beach and the sunshine.  In the San Francisco Bay Area, there are six top-tier professional teams (eight if you count soccer, which certain people don't) and six Division I schools.  If you're UT in Austin, TX, you're pretty much the only game in town.  Regardless of the situation, what a team's executives need to realize is how their unique product differs from all the rest of the alternatives the market has.  Knowledge of this fact helps build a unique value proposition, which most marketing academics will tell you is the cornerstone of any good marketing strategy.

Reevaluate the product: Are the concessions too expensive, or low in quality?  Are certain merchandise items not selling as fast as others?  Are the ticket packages not flexible enough for the customer budget?  It's so easy to blame a team's woes on the customer market, but maybe there's a collection of things the team is doing that are rubbing fans the wrong way.  Teams should be ready to smash apart their business revenue models and start all over again.

Build long-term equity when times are good: Even the worst marketing strategy can make money when a team is winning, but so often teams and schools take the extra support for granted, when what they really should be doing is forming long-term equity with the enthusiastic customer base.  Let's face it, it's easier to market to a loyal customer than a new customer, and cheaper to retain your current customers than it is to find new ones.  They say the best brands are the ones customers will identify themselves by, and winning teams have a unique opportunity to build that relationship which will be valuable when the team, for one reason or another, falls on losing times.

LISTEN TO YOUR CUSTOMERS: Social media sites like B/R are valuable because they empower fans and the like to speak their minds.  They also happen to be where the most passionate and loyal of fans of teams and schools speak openly about their experiences as customers of a sports franchise.  Listening through social media is, in short, a very effective and inexpensive way to key into what your customers are saying and generate new ideas by facilitating a conversation with your fans.  But remember, blogs, Facebook, Twitter, and foursquare are merely just tools.  It takes a well-thought out listening strategy to use these tools effectively enough to identify potential revenue streams and product improvement ideas. 

The last one is key not only because B/R is part of the social media realm, but also because social media marketing has become a key new sub-field of marketing that has tremendous repercussions for the sports industry.  And as marketing budgets decrease and growth expectations rise, the presence of a key social media component will be crucial to most any business, including a sports business.

I know it's not fun to think about the business side of sports, and rather just focus on what happens one the field.  But the fact remains that sports teams are businesses, and those businesses cease to exist if they lose their financial health, as so many other businesses in this recession have.  There's a popular bumper sticker on many trucks that says "Without truckers, America stops."  Well, without sports marketing, sports nation stops.