So for all the latest updates on high performing NGBs, customer-led growth and sports business in general please click here or visit www.roberts-sports.com

See you there

Paul

• Asking what’s it for – and by extension who is it for – helps to ensure that the product/service/experience is going to fully meet a clearly defined need
• Asking how will we know if it’s worked helps ensure that the right measures are in place to monitor and respond to progress

If these two questions can’t be clearly answered – and consistently answered across the team – then it’s unlikely that the desired market impact will be achieved.

For more on this, read Seth Godin’s post What’s it for?

Maybe not… recent research by IPSOS MORI for Verint suggests that while nearly all organisations collect some form of customer-related feedback or insight, most are not leveraging this feedback strategically. Those that are doing something with it seem to be focusing on using it to measure their people/processes rather than to improve customer experiences. Some aren’t even doing that much, including many sports organisations.

The reason for this is starting the process with the wrong question. Too often the starting questions are “what data can we easily get” or “what do we already measure”? As a result, its very hard to then find insightful “so what” answers that can inform relevant action.

Instead the starting question needs to be “why do we need the insight” or “what will we to do with the answers”? Knowing what the insight work needs to answer, and how it will be used, provides direction to the work. It defines what data needs to be captured and from who, and it also identifies who will be responsible for acting on the answers.

So let’s look at the process for creating actionable insights, and where the friction points and blockages might be. Creating actionable insights is a simple 4-step process:

Collect – source, gather and aggregate raw data about your current or potential customers – who they are and what they are saying, thinking, feeling and doing about your sport. To achieve growth you will need to be capturing both current behaviours (what/how/when) and the influences & motivations driving those behaviours (why).

Analyse – crunch the data to find trends, patterns and potential relevance across the different data sources.

Interpret – review the analysis in the context of your organisation/customers/market, to understand what’s happening and why it may be of significance to you. This “so what” step is what turns data into insight, yet its the one often missed out or rushed. However without being clear about the “so what”, organisations cannot then respond successfully.

Respond – take timely action in response to what the insight is telling you. This response can be both internal – improving plans, processes, delivery etc – and/or external – improving the offer to customers or just letting them know you were listening.

This still looks quite simple, or at least straightforward. So where are the challenges? Three I’ve seen recently are:

Starting in the wrong place – projects are being scoped based on what data can be captured, rather than what insights are required. By not asking why the insight is required, the data subsequently captured might be interesting but doesn’t help drive action and growth.

Losing control – the “so what’ interpretation is being completely outsourced along with the data collection, rather than benefiting from the expertise of people across the organisation. As a result it’s much harder to identify “so what does this mean for us”, and misses the opportunity to engage the organisation in creating customer-centric responses.

Missing in action – the outputs of the “insight work” appear in presentations and newsletters, but don’t subsequently spark any considered action. This maybe because the “so what” is missing, or because the staff aren’t engaged with the work or because the reports weren’t created with actions in mind.

Given these challenges, why bother? Simply put, the opportunities for creating and acting upon improved insights are huge (as are the risks of doing nothing). Sport has a massive opportunity to drive sustainable growth through an improved understanding of how to add more value to current and potential participants. And this improved understanding will improve the focus and effectiveness of delivery, which means this growth can come with an improved return on investment.

Thanks to Michiel Lely and Roula Andari at Verint for prompting this post, with their presentation and subsequent discussion at the Directors Club breakfast.

• Build an army of loyal customers without paying a fortune to acquire them
• Improve customer retention by rethinking your acquisition strategy
• Find ways to get your new ideas to spread (without spoiling the surprise its all about people!)

Building an army of loyal customers

Huge customer loyalty doesn’t need big budgets, just a genuine commitment to create something customers want to be part of. Community site Gentlemint demonstrates that you can swiftly build an insanely loyal community simply by putting your customers first.

How Gentlemint Built a Loyal Customer Base on a $0 Marketing Budget – Glen Stansberry, OpenForum.com

Improving customer retention

Customer acquisition and customer retention are intrinsically linked, and hence customer loyalty is developed or destroyed from the very first interaction. So to improve customer retention, organisations need to ensure their marketing sets expectations that match the typical customer experience, and that the marketing only targets those consumers who will value these experiences.

Customer loyalty should never be your only goal – Don Peppers, LinkedIn blog

Finding ways to spread ideas

Changing people’s behaviour requires more than logic or a good idea. New solutions need to solve visible problems, and need to provide a direct benefit to the people who’s behaviours you’re seeking to change. This is a long but fascinating article about how medical breakthroughs have spread at very different speeds.

Slow ideas – Atul Gawande, newyorker.com

Price v Value

And the quote for the week reflects the role of pricing in the customer value proposition…

“If you tell me that price is the only thing that matters to customers, I’ll respond that nothing about this product matters to them” Seth Godin, Purple Cows & Commodities

At this week’s Marketing Week Live, Jonathan Earle from Telefonica O2 shared three rules upon which O2 have built their success in Slovakia. These are:

1) Stand for something
2) Be consistent
3) Trust your people

Given they’ve taken nearly a quarter of the market share on a shoestring budget, and boast very high staff & customer engagement scores, its worth considering how their success could be applied to growing sports participation.

1) Stand for something – be distinctive
What this means: use market and consumer insight to define a clear and distinctive position within the market. Brands that target everybody end up being relevant to nobody, as one size rarely fits all. So instead focus on creating offers and experiences that are aligned to your brand and are relevant to your target market.

What O2 did: O2 choose to shake up the market by being the “fair operator”, and hence don’t make offers that their target customers would think are unfair. They don’t make anyone sign a contract, when they say unlimited there’s no “but…” in the small print, and if they create a more competitive offer for new customers they automatically extend it to existing customers (not when they ask for it, or threaten to leave, but automatically – otherwise its not fair!).

What NGBs could do: standing for something requires understanding the current market for delivering sport and also the wider needs and expectations of target customers. Understanding the customer’s decision making process when they choose sport, and then specific sports within that, is key to defining a position that will be more compelling than the alternatives (which are usually not sports-related). Of course being distinctive and standing for something takes courage. It means choosing not to stand for some other things, and hence not trying to be relevant to everybody. But that’s how growth and customer loyalty is created – by focusing on being the most relevant and compelling choice for your target market.

2) Be consistent – disciplined execution
What this means: Having chosen to stand for something distinctive, maintain this clear water through being very disciplined about communications and delivery. Consistent communications keep reinforcing the key message to stakeholders and customers. Consistent decisions and delivery reinforce the authenticity of the message through the experience of customers. It’s this consistency that creates brand advocates.

What O2 did: A ruthless focus on consistent messages, offers, and in-store experiences has made the brand experience authentic and compelling rather than just a strap line. This includes considering how staff need to be managed and rewarded so that they too feel that O2 is the “fair operator”. Interestingly, in this respect Earle sees their small budget as an advantage, as they can’t afford to be tactical or distracted by unplanned opportunities.

What NGBs could do: the mixed economy of delivery in most sports involves many organisations with different priorities. NGBs need to clearly communicate how their offers add value to their target customers. They also need to be very clear about what aspects of their products and communications are customisable to local needs and what aspects are non-negotiable.

3) Trust your people – give them room to breath

What this means: being customer focused requires agility and responsiveness to customers. This agility comes from empowering staff to take responsibility and make decisions when talking with customers. This agility can be achieved by shifting budget and/or decision-making responsibility locally, and combining it with a consistent approach to communications and measurement. The motto is clearly define expectations and boundaries, then get out of their way.

What O2 did: O2 believe that their people are the experts, and don’t want them bogged down by bureaucracy. So they “treat their people like adults”, giving them clear and consistent direction and then passing down the responsibility for achieving that.

What NGBs could do: many NGBs are good at empowering local staff to make decisions and even to manage budgets. However, in many cases this empowerment is not supported by clear communication of the chosen positioning and/or success measures aren’t consistent and aligned to the overall outcomes.

In summary, one size doesn’t fit all, and therefore every brand needs to stand for something that is relevant and compelling to its chosen target audience. To achieve scale organisations must then be very disciplined in how they execute across all of their touch points. This consistency of experience comes from treating staff the same way that customers are treated, which means they must be trusted to make the right decisions.

Starbucks has had a go at re imagining the rules for building coffee outlets. It’s designed its new concept store to be a work of art, and deliverable on a truck. The big idea is to find ways to build scale while still being locally relevant. This is the same challenge that the sports sector faces, to drive national scale while reflecting local needs. However I suspect the sports sector has yet to see this as a designer’s problem to solve like Starbucks do?!

Meanwhile some American retailers are working towards a concept of the “omni-channel“. This sounds impressive, but its really just looking at channel strategy from the customer’s perspective. Customers don’t categorise their relationship into bricks and mortar, franchise outlets, call centres and online. They just want to browse, buy and collect a brand’s products in whichever way is most convenient to them at that time. So the big idea with the “omni-channel is that the business re-engineers itself around delivering a consistent customer experience across all its channels. This breaks down silos internally and helps reinforce brand values externally.

Of course behind the scenes neither of these trends are easy to deliver on, in retail or in sport. Achieving scale while being locally relevant requires constantly searching for local needs that are common across the market. Local customisation can then be kept to a minimum and focused on areas of high impact to customers & partners. Likewise delivering a consistent and seamlessly connected customer experience across all touch points will require a whole new way of working and information sharing, both across the business and out through the network of partners.

So will the pain be worth it? Well organic growth comes from engaging more customers more often, and improving the customer experience is a critical part of achieving that. So whether its thorough visible delivery innovations or business model innovations the customer never sees, organisations will need to adopt these principles or risk losing out on the growth they will generate.

Re-reading Margaret Manson‘s CEO Online article “The power of the ‘One-Rule’ in productivity and growth” has been a valuable reminder of the importance of maintaining focus if market scale is to be achieved. In effect it recommends developing an organisation-specific way of challenging whether a proposed idea or project will “make the boat go faster”.

This strategic focus is much harder to agree and execute than a simple phrase suggests. It needs to be the organisation’s “north star” that helps people trade off competing priorities by being able to hold up a new project against the number one strategic outcome. It needs to be specific enough that everything can be justified against it, but broad enough to align the whole organisation.

Vern Harnish, business growth guru and author of The Rockefeller Habits, adopts a similar approach with recommending a “one-phrase strategy“. Vern often uses the example of the “wheels up” strategy of SouthWest Airlines. This simple phrase drove every strategic and operational decision from reservation systems to cleaning processes to the types of aircraft they bought. The single focus of every decision was to keep the planes in the air where they generate profits, not on the ground waiting or being repaired.

Do you have a “one-rule” or “one-phrase strategy” within your department or organisation? And is it one that helps clearly focus strategic and operational decisions as well as “wheels up” or “THE low cost airline”? Please share in the comments below.

Losing sight of customer needs & market trends

In the mid 1980s, Nike’s growth stalled on the back of a failed brand extension into casual shoes. Despite Nike being a trendy brand, and casual shoes being a growth market, they failed to grab significant market share. According to founder Phil Knight, the problem was Nike had lost sight of who their customers really were. Their target market had always been performance athletes, reflecting their heritage in the legends of Bill Bowerman and Steve ‘Pre’ Prefontaine. Since Bowerman invented the waffle sole by pouring rubber into a waffle maker, Nike have been at the forefront of product innovation in every category they play in. In entering a new market, Nike took the same approach and produced “a functional shoe we thought the world needed, but it was funny looking and the buying public didn’t want it”.

Why this happened is a warning to sports organisations that’s as relevant now as it was when Phil Knight originally gave it. “In the early days, when we were just a running shoe company and almost all our employees were runners, we understood the consumer very well. There is no shoe school, so where do you recruit people for a company that develops and markets running shoes? The running track. It made sense, and it worked. We and the consumer were one and the same. When we started making shoes for basketball, tennis, and football, we did essentially the same thing we had done in running.”

Eventually this one-dimensional approach to customer insight became a weakness. “We were missing an immense group. We understood our “core consumers,” the athletes who were performing at the highest level of the sport. We saw them as being at the top of a pyramid, with weekend jocks in the middle of the pyramid, and everybody else who wore athletic shoes at the bottom. Even though about 60% of our product is bought by people who don’t use it for the actual sport, everything we did was aimed at the top. We said, if we get the people at the top, we’ll get the others because they’ll know that the shoe can perform. But that was an oversimplification. Sure, it’s important to get the top of the pyramid, but you’ve also got to speak to the people all the way down.”

Becoming genuinely customer-led

So what’s different now Nike are customer-led rather than product-led? Knight continues “whether you’re talking about the core consumer or the person on the street, the principle is the same: you have to come up with what the consumer wants, and you need a vehicle to understand it. To understand the rest of the pyramid, we do a lot of work at the grass-roots level. We go to amateur sports events and spend time at gyms and tennis courts talking to people.”

Within this story are several keys to organisations being genuinely customer-led

• Be wary of using staff as a proxy for the needs of the customer, as this becomes potentially limiting if/when the actual customer base diversifies beyond the core customers
• To understand customers, get out to where they are buying/using the products and services you provide – see how they use it, and listen to how they would improve it
• To achieve scale, design products and services based on the common needs across target customer groups, rather than focusing on the differences between them.
• Changing the focus from creating products to delivering solutions (as discussed in this recent post on ‘Re-evaluating the 4Ps of marketing for sport’)

In this context, Nike’s announcement of combining social responsibility with business growth makes good sense. Nike knows what’s important to their customers both now (a company that takes social responsibility seriously) and in the future (active and sports-aware kids will become the target customers of the future). It’s not just their innovation department that is thinking several steps beyond the current product line.

To read more about customer-led growth, click here

The role of an international rugby captain came under public and media debate in Wales last week. Regular captain Sam Warburton was fit again but left on the bench, with Ryan Jones retaining his place and the captaincy. With many accepting the logic of not changing a winning team, focus turned to the role of the captain(s) and who could/should/would do what.

The captain’s role can take many forms, including leader, organiser, encourager and of course player. And the specifics of what’s required often vary by sport, team and the individual in question. But what is consistent is that the role is as much as about bringing the best out of others as it is about playing well themselves.

The debate in Wales got me thinking about the role of NGBs. Like team captains, NGBs can be required to play many roles within and on behalf of their sport. But while the requirements vary by sport and situation, it is vital that the NGB has clearly defined its role before it finalises its business model.

What roles could an NGB play?

The many potential roles of an NGB can be clustered under three headings – leader, enabler and deliverer.

Leader – This could include the traditional role of governor, setting and enforcing rules of play and standards of experience. Or it could be a thought leader, sharing lessons, successes or new innovations with other partners. Or it could be a connector, co-ordinating the different organisations across the sport to achieve common measures of success. Or it could be leading the performance of a group of partners the NGB has formally or informally outsourced work to.

Enabler – This could include recruiting, training and upskilling the workforce across the sport, through a range of formal and informal qualifications. Or it could be supporting the delivery chain of clubs or facilities to improve their facilities, marketing skills or other capabilities. Or it could be about aggregating, adding value to and sharing consumer and market intelligence to enable partners across the sport to provide innovative and relevant offers to a growing number of participants.

Deliverer – This could include directly filling a delivery gap, either with national programmes or through a club network. Or it could be running competitions and events that other providers train people/teams to take part in. Or it could be through stimulating innovation by developing and testing new products to create a proof of concept for the market to scale up. Or it could be through orchestrating and delivering an overarching campaign to drive demand across the sport.

My intention is not to prescribe the ideal role of an NGB. That depends on the market their whole sport operates in, future customer needs and the strategic outcomes of the NGB. However the strategic choices and the information required to make them are similar across sports. And the key word here is choice. In the same way that Sam Warburton or Ryan Jones couldn’t play all 15 positions and direct the game from the stands, no organisation can successfully be everything to everybody.

Strategic choices require a clear understanding of the whole market

To develop a clear understanding of the market (sport) and its potential customers (participants), requires answering 4 broad questions:

What does current demand look like?
This includes understanding who is doing what, where, when, how, why & with who; and hence identifying the current trends, customer behaviours, needs, influences and barriers.

What does current supply look like?
This includes understanding who is providing what, where, when, why & how successfully; and hence identifying the needs, priorities and drivers of current providers.

What does future demand look like?
Given the trends within the sport, across other sports and throughout the target customers wider lifestyle, how is demand likely to change if nothing different is done? Are the potential market forces and new trends likely to increase or decrease demand over the next 3-5 years?

What does future supply look like?
Given the most likely political, economic, social and technological trends, what is likely to happen to supply over the next 3-5 years? For example will facilities be opened/closed/repurposed and what could be done to respond to the positive and negative impact of this potential future?

In summary, these aren’t simple questions to answer as they require a deep and on-going flow of market intelligence and consumer insights. However some NGBs are already building this understanding of where their whole sport is now and where its going. This understanding is being used to evolve their business model by making strategic choices about the market opportunity they are going to pursue and the role and priorities they will need to achieve it.

This focus on defining a key role is crucial to future growth as the expertise and processes required to be very good at governing a sport, running events, orchestrating national marketing campaigns, developing innovative products are all different – and these are just a few of the potential roles NGBs may choose to play. Doing a bit of everything isn’t the answer, as anyone who’s seen a prop dive pass or attempt a drop goal will testify…