Jun 07, 2001
SUMMARY: If you're marketing to a sports fan or other enthusiast-type consumer audience, this Case Study is for you! We especially like the clever way Director of Marketing John Piccirillo used testimonials in his email newsletter sponsorship ads. Plus, if you are in the subscription sales business, you'll want to hear about the company's survey results when they asked fans if they'd pay for emailed news. || |
Back in 1994, Pivotal Communications CEO Bruce Piefke saw a big need in the sports media marketplace. His Director of Marketing John Piccirillo explains, "Sports teams' Information Directors were standing in front of the fax machine for three hours every time they had to get something out to the media."
So Piefke invented a new fax distribution service: MediaTeamLink. Soon hundreds of collegiate and professional teams signed up, paying annual fees of "less than $50,000" in order to have all their official team news quickly faxed out on their behalf to every interested media professional.
Piccirillo says, "It was a juicy little business." But Piefke had his eye on an even bigger opportunity -- getting official team news into the hands of sports fans. Piccirillo says, "He was in tune with avid fans. They are resistant to oversupply. They just can't get enough of this stuff."
Piefke couldn't jump on the opportunity though, because industry analysts' predictions of a fax machine in every American's home never panned out. He waited impatiently until 1999 when it became apparent that email would be the killer app. It was time to act. Now all he had to figure out was how to price, market and fulfill email subscriptions profitably.
Despite the fact that Piefke himself is remarkably in tune with the mind of the average avid sports fan, he insisted on doing an enormous amount of market research prior to launching the Company's new service FanTeamLink.
After gathering pricing data on dozens of team fan publications, which ranged from $29-$100 per year, Piefke decided to see how his market felt about paying $69 a year to receive emailed updates whenever their favorite team had official news. His marketing team sent an email to thousands of sports fans, asking them to take a 12-question survey online. The results
- 48% surveyed said they had a high propensity to pay. Piccirillo says, "We knew that number was probably too high in real life. It might work out to 10%. But that's still really good."
- 30% surveyed said they would never, ever pay. Piccirillo explains, "They said, 'I don't care if this is the greatest thing since sliced bread, I'm NOT paying you.'"
- 22% surveyed were riding the fence.
Piccirillo gained a stunning revelation from these results and some early marketing tests: "We learned there was no correlation between free trials and people paying." The probable buyers could be persuaded with strong marketing copy, online samples they could view, and a well-worded guarantee. It didn't make sense to give the never-gonna-pay people free trials. And the fence-sitting contingent often would subscribe when the offer included a compelling free gift with order.
Survey results also revealed that the planned $69 price was too high. Fans said they'd pay between $27-34 a year, so FanTeamLink was repriced at $29 per team per year.
Last but not least, the survey helped Piccirillo understand what the fans viewed as the service's unique selling proposition (USP), "People told us they weren't paying for content. They said, 'I can find it for free in other places if I want to work hard enough. I'm paying $29 for delivery. I want to have the news at the same time as the guys at ESPN do and I don't want to surf for it. I'm paying for convenience.'"
Next Piccirillo tested a wide variety of both online and offline marketing tactics to drive avid sports fans to the FanTeamLink site where they could buy subscriptions. In each case, the campaign was targeted on a team-by-team basis. For example, fans of Austin's University of Texas football team received offers for that specific FanTeamLink email news service via radio, season-pass mailer inserts, related email newsletter sponsorships, and even printed flyers handed out at games.
Creative featured personal testimonials from local fans. In fact FanTeamLink's Austin radio spot was a personal message from the official "voice" of UTE football. Piccirillo says, "He was already a client of ours on the media side and was happy to lend his name to it."
Piccirillo worked with each team's official store in order to come up with compelling premiums. At first premiums included hard goods such as team books and CDs. Now he keeps fulfillment costs down by concentrating on "digitally downloadable" premiums such as team store discount certificates and eBooks.
As traffic from the campaigns hit the FanTeamLink Web site, Piccirillo fiddled with the online order form to maximize sales conversions. He also implemented a database-driven personalized email marketing system so he could track individuals' interests by which emailed news items they clicked on, and then send them related offers. He says, "In email if you're not relevant, you're dead. Our goal is to be the most relevant email people get aside from personal notes from their friends."
In less two years, FanTeamLink has gained "tens of thousands of paying subscribers." Currently, FanTeamLink generates about 60% of its parent company's revenues.
(Note: That's not to say that MediaTeamLink isn't still successful too. In fact that division raised its prices and added more teams to its client roster. This means the Company is able to charge the teams for collecting their data and distributing it to the press, plus they are able to charging fans for sending it to them. Yes, you can have your cake and eat it too!)
The most effective marketing tactic was, "being at the game and sticking stuff in people's hands." Piccirillo's database-driven email campaigns were highly effective -- in fact he was able to cover the costs of implementing the system within 125 days. Text ads in related fan e-newsletters were also big winners. Piccirillo notes, "We never rent a list to send a blast. We only do content sponsorships."
Piccirillo learned he could increase online sales conversions by adding a clearly worded guarantee, and eliminating every single item on the order form that wasn't absolutely necessary. He says, "The simpler the form, the lower the abandonment rate." Aside from credit card details, the order forms only ask for name, email, zip code and a password.
We asked Piccirillo what he'd like to tell others wondering about the subscription-model. He replied, "Anybody who says it's the end all and be all, or who says it's never going to work, shouldn't be trusted. It's a tactic, it's not a strategy. It needs to be surrounded with other revenues. Plus, to sell, your stuff has to have real benefits."
TECH NOTES: TeamLink receives and redistributes an incredible eight million pages of information per year. How do you select out just the right information for each local team's fans, and then personalize further email correspondence to cross-sell them on other services? Piccirillo uses database marketing software and email fulfillment services from Socketware's Accucast.
He explains, "We pay a per-email charge and there was a small set-up fee. Our stuff sits in a regular SQL database and their app talks to our database. Their tool gives me eyes and hands to play inside our database to learn about users and turn those tables into actionable information."