7 things to learn about channel loyalty from one of the world’s most valuable sports clubs

17 July 2015

According to Forbes’ latest ranking of The World's 50 Most Valuable Sports Teams 2015, Manchester United Football Club is ranked 5th, valued at $3.1Bn. Having grown up in Canada, my primary sport allegiance is hockey, but even though I’m not big on English football, I do admire the marketing machines that these global businesses have created to propel their brands and balance sheets into the stratosphere. And with over 600m die-hard fans around the world, they know a thing or two about building loyalty.

An innate ability for these clubs to extend their brands into everything from 24 hour TV stations to online games to financial services and even theme parks (!) has been key to help them achieve their global following and billion $$ valuation. So if I told you that MU’s financial service’s division MUFS invested in a loyalty programme to support its co-branded credit card, you might think I got my wires crossed given their loyal fan base, but they did just that (with Collinson’s (formerly ICLP's) help) and for 2 very good reasons: to create unique value for their members and to drive incremental revenue. So not a million miles away from what most tech vendors want to do with their channel partners – recognise and reward their commitment and increase sales.

Having worked alongside the team that designed MUFS’s loyalty programme Red Rewards, and with tech vendors, here are the lessons that I think every Channel Manager can learn from MU:

  • Increase understanding to gain better insight to deliver a more valuable experience.
    With 500k cardholders in 14 counties, MUFS can be forgiven for not understanding the profiles and preferences of this important segment of fans. What MUFS did was invest in collecting more information from its members and analysing that data with transactional data to create distinct marketing segments and to define the value proposition for the loyalty programme to ensure it would hit the mark – which it did.
  • Recognise them and thank them for their loyalty throughout the ‘journey’.
    Many loyalty programmes are conditional (i.e. sell this, earn that). Consumer and business customers are more savvy than ever before so recognising and rewarding them for things other than sales (e.g. 1 year anniversary) or providing exclusive access or benefits can differentiate your programme from your competitors.
  • Drive incremental and profitable behaviours 
    It’s not just about the love! The underlying reason for any loyalty programme is to improve the bottom line which can come from incremental revenue or reduction in costs. In the loyalty world, recency, frequency and value (RFV) are some of the main drivers. In Red Rewards, members are entered into a prize draw every time they use their credit card which increases frequency and revenue from the credit card. The prizes are so motivational that the chance to win is strong enough to change behaviours.
  • Offer low-cost, high perceived value rewards.
    Tickets for games have a high real cost so after some creative thinking MUFS assembled a large list of rewards that are low cost to fulfil but highly valued by members. “Money can’t buy” rewards (e.g. signed prints of players, invitations to training ground sessions) are the core proposition for the programme enabling MU to focus their budgets on engagement and less on the actual rewards.
  • Intrinsic motivators are more powerful than extrinsic motivators when you know your audience.
    MUFS discovered that it didn’t need to offer a financially rich programme. Members look forward to the exclusive communication (even more than their credit card statement for some strange reason….), sense of community and just the chance to win are enough to engage and shift behaviours.
  • Well-designed loyalty programmes DO deliver measurable ROI.
    A well-balanced loyalty programme needs to provide meaningful value to both parties. If too much emphasis is on the member experience without the numbers working, then the programme will be run into the ground soon after launch. If the programme is designed by the ‘Finance Director’ and there is no value for the member, the uptake will fall short of expectations and participation will drop off. Red Rewards achieved ROI break-even within 6 months and increased the number of unique qualifying cardholders by 43% in the first 9 months.
  • Connect with your customers on an emotional level to drive real loyalty.
    Most importantly, Manchester United, like many other sports teams, understands that loyalty comes from an emotional connection with its fan base and that’s why so much effort is invested by sports clubs to ensure they continually provide new channels for their fans to engage in. While it would be unrealistic for tech vendors to expect the same devoted and unconditional loyalty as sports fans, vendors should think about loyalty and engagement as something bigger than incentives and develop new and innovative ways to build that connected loyalty with its Partners.

Now if only my Toronto Maple Leafs could get on the Forbes’ top 50 list!