Let's paint a picture of the best possible hockey fan, at least as far as the National Hockey League's direct marketing department is concerned. This fan passionately roots for at least one NHL team. He or she has demonstrated an interest in hockey-related offerings through online channels, specialized television networks, retail stores and live venues. This individual also has disposable income.
Oh, and it doesn't hurt if the fan lives far from his or her team of choice. Such people have an intense interest in getting closer to their favorite team, and a new database is intended to help them do it.
There are a lot of these displaced fans, says Perry Cooper, the National Hockey League's senior vice president of digital/direct marketing and fan strategy. He estimates that at least half live far from the teams they follow.
“We think that percentage is going to grow over time, simply because we will be more pervasive in the Web space,” Cooper says. “Our national distribution and marketing formats will drive more of a surrogate relationship, reaching out to and serving displaced fans.”
These long-distance enthusiasts could easily reach the millions. There are 20 million avid hockey followers in North America — 13 million in the United States and 7 million in Canada. As the NHL begins to capture and identify their names (Cooper won't reveal how many of these folks he tracks), that information will be housed in a relational database the league fired up in the last month.
When Cooper joined the NHL a little more than a year ago, fan data was in what he calls “virtual shoeboxes,” in which each of the league office's operations maintained its own records. Before the NHL started to work on the system, Cooper focused on existing, customer-facing programs, such as online offerings and a product portfolio.
Doing so yielded fertile streams of information the NHL is using to generate avidity scores for everyone in its file — literally, a score of how passionate a fan is. This score is arrived at through a variety of behavior, including participation in fantasy hockey leagues; merchandise purchases; subscriptions to Center Ice Online, a service which allows fans to watch games broadcast outside their local market via computer; online video viewing; and attending live games. All this information, along with demographic overlays, is on the database.
An obvious data point may seem to be one's favorite team. And indeed, Cooper places an extremely high premium on it.
“Favorite team, and the rate at which we capture it, is critical,” he says. When league marketing efforts reflect this knowledge, response rates double or triple those of generic offerings.
It isn't always easy to get this information. Yes, the NHL asks fans. But its analysts also use a blend of IP address, bill-to and ship-to information on merchandise orders, and online behavior to identify the long-distance fan.
“When you look at all the names and addresses, and someone says ‘My favorite team is X,’ and they don't live anywhere near that favorite team, that is the moment,” Cooper says. “Once you can find someone who has such an emotional and passionate commitment to a team, who is largely price insensitive because of that devotion, you can start to tailor promotions across this access constraint.”
There's a flip side to this, of course, especially if the favorite-team data is inferred rather than collected directly from the customer. “The last thing you want to do is address someone as a fan of team X when he really is a fan of team Y,” Cooper says.
The system will do more than determine a fan's favorite team by picking through behavior and transactions. It includes analytics capabilities that enable the NHL to monitor and analyze online behavior, with a focus on the amount of time a fan spends on social network engagement (such as number of blog posts or chat participation on NHL Web sites, all of which play into a fan's avidity score).
“We are far, far away from discovering who the überfan is,” Cooper says. “But right now we're able to look at the difference between avid and casual.”
When the system is fully operational in another month or two, Cooper expects to design different fan cohorts and create marketing programs that move fans into more profitable statistical groups.
Even before the system was installed, Cooper could look at return on investment across the NHL's offerings. But the new, integrated database will let him explore lifetime value calculations for every prospect the league captures.
The ceiling for potential revenue growth is fairly high. Cooper believes better knowledge of individual fans, along with a robust cross-selling strategy, should make it possible to achieve merchandise sales increases between 30% and 40%. He also expects the NHL's premium TV channel for games televised outside local markets to see solid low-double-digit gains as well.
But the biggest growth likely will come from the NHL's online offerings, including live streaming video of games. Through a mix of deeper offerings to in-market fans, as well as greater access for long-distance enthusiasts, Cooper believes the 20 million fans now considered avid will increase to 25 million in a few years.
Eventually Cooper hopes all 30 NHL clubs will contribute to the database. The teams and the league already share names for non-competitive purposes; the league, for instance, will market general appeal events such as season openers in Europe, the All-Star Game and a Winter Classic showcase game.
While the NHL uses names and addresses from individual teams for these efforts, it doesn't store data shared by clubs in its file. Cooper admits there are a few hurdles the league must leap before teams will pour fan information into a centralized file.
Along with demonstrating that shared data will be used only for non-competitive purposes, Cooper is working to assure clubs that firewalls and other security measures will be robust. And, most important, Cooper will need revenue data that proves when teams cooperate with the NHL, the total share of a fan's entertainment budget which hockey represents grows.
Cooper acknowledges that Canada's data laws are more stringent than those in the United States, but says there are big opportunities for driving fan behavior while operating within those restrictions. The 7 million Canadian fans are different than their U.S. counterparts, he notes: There's a much higher percentage of avid, as opposed to casual, fans. A good amount of the NHL's work will focus on maximizing these ardent fans' value.
Interest among individual clubs generally has been high. In July Cooper gave a keynote presentation at a league CRM summit, and had a chance to swap ideas with representatives from every NHL team. Teams described their CRM and ROI practices and expressed enthusiasm for leaguewide marketing which would cut down on redundant messages, according to Cooper.
Not that there isn't some cooperation already. The NHL handles all direct response merchandise sales for its teams. As it captures these buyers' team preference, Cooper hopes to generate 30 customized six- to eight-page virtual catalogs for them.
“We won't have to worry so much about the efficiencies because the paper is really cheap when it's electronic,” he says with a smile.
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