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CRM -- it's a brand new ball game

The sports world has only just begun to tackle CRM, but some teams and vendors are starting to gain ground.

When it comes to managing relationships with their customers, many sports organizations are looking at third and long.

Sports teams really operate like midsized businesses, and they make similar-sized investments in the management of customer relationships, said Paul Greenberg, president of Manassas, Va.-based 56 Group LLC.

I think CRM was built for the sporting industry.
Atique Shah
vice president of CRM and technology solutionsChurchill Downs Inc.

The industry is worth billions of dollars, Greenberg said: "We're not just dealing with fans filling seats. There are products, TV contracts, and all of this is part of CRM initiatives."

CRM in sports remains an immature market, according to vendors, analysts and sport executives. Some teams have made strides, however. Greenberg cites Arizona State University as one of the few organizations to have a person with a CRM title -- Steve Hank, CRM development director for ASU athletics.

The Seattle Mariners baseball team embarked on its CRM initiative four years ago and is now three years into deploying applications from Bellevue, Wash.-based Onyx Software Corp.

"We've had tremendous success with it," said Larry Witherspoon, the Mariners' vice president of technology services. "Revenues have increased, and our complaints are down 80%. We use the system to be a lot more proactive."

When it comes to CRM, there is one area where sports teams do better than businesses in other industries -- customer loyalty. After all, few companies have customers who will paint corporate logos on their faces, steadfastly refuse to buy from the competition and call in to radio shows to sound off on how they think the business is run.

"I think CRM was built for the sporting industry," said Atique Shah, vice president of CRM and technology solutions for Churchill Downs Inc., owner of the famed Louisville, Ky., racetrack. "There are two things going for you, fan affinity and the ability to translate that. Customers want to let you know how they feel."

Churchill Downs recently invested in a CRM suite from E.piphany Inc., San Mateo, Calif., to coordinate e-mail campaigns among racetracks, improve e-mail open rates and recognize previous purchases. CRM projects such as realizing a customer's lifetime value and effectively segmenting fans are also perfect for sports, particularly given the peaks and valleys of a season, Shah said.

Yet CRM is about more than just selling tickets to the game. While teams are catching on to some areas of CRM, they can't clear the hurdles in others.

"There's a lot of stuff going on, but what [teams] perceive as CRM is only fan loyalty and marketing programs," Greenberg said.

Case in point: One need look no further than the uproar over a "costume malfunction" at the Super Bowl halftime show to realize that sports pervades society.

Fans are not the only customers of a sports business, Greenberg said. Also important are agents, memorabilia vendors and, one of the biggest revenue sources of all, the media. In fact, the media plays an interesting role in sports that has no corollary in the business world, Greenberg said. It's a customer, and yet it also influences customers, not only buying the product, but also helping to sell it.

The Mariners, for one, are primarily dedicating their CRM efforts to the traditional fan.

"To us, it's the guy who walks into the stadium and buys a hot dog -- that family of four," Witherspoon said. "Maybe just a guy who buys Mariners gear at a store. That's who we're dealing with."

Some vendors are more seriously pursuing the sports industry. Microsoft, Onyx and, to a lesser extent, Siebel Systems Inc., have made inroads, Greenberg said. One smaller vendor, SmartDM, Nashville, Tenn., an e-mail marketing company, has done particularly well by signing up 12 professional teams, Greenberg said. Other providers are still hoping to knock one out of the park.

"Sports in CRM is a very interesting opportunity," said Ellen Olson, senior vice president of marketing for E.piphany. "It fits nicely in the overall focus of our company, which is in the B2C space. I think it's very early [in the game]."

The opportunity is there and, while even the biggest teams may not match the revenue of General Motors, teams like the New York Yankees and the Greenbay Packers have huge customer bases. The NFL is tracking about 17.5 million fans -- that's a big number that means big implementations, Olson said.


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