FIBO Livetalk: Customer retention as a key to success but how?
Winning over customers is difficult enough but retaining them is the silver bullet. This applies to sports brands just as it does to retail and sport clubs. In our Livetalk on the occasion of FIBO industry experts Dr. Kai Hudetz (IFH Köln), Boris Hedde (IFH Köln), Dietmar Hagen Horn (Horn Consulting) and Sören Braun (1. FC Köln) hooked up with Mailin Schmelter (ECC Köln) to discuss what counts in customer loyalty strategies. What services go down well with shoppers and what opportunities and risks come with increasing digitalisation?
Mailin Schmelter: What keeps the sports sector busy in times of Corona?
Dr. Kai Hudetz: Corona has very much heightened people’s awareness for fitness, nutrition and health themes. You could even say that particular segments of the sports market have enjoyed a special cyclical upswing. For customer retention this, of course, results in a high-wire act: Due to the digitalisation boom customers have become even more disloyal and have even more touchpoints than before. At the same time, digitalisation provides retailers with more opportunities to deliver the right product and content thanks to data analysis. This is the big challenge.
They say customers should become fans – i.e. be emotionalised. Is this true and how do you achieve this?
Dr. Kai Hudetz: This is what drives the industry! Football is the best example. Here emotionalising works ever so well. Brands also do a great job at that, take Apple for example. The good thing here is that fans are no longer price-sensitive, to them only the brand counts. This opens up completely new opportunities for manufacturers.
Well, you have an easy job then as a football club because your customers are already fans.
Sören Braun: That would be a fine thing, but the market is saturated and we cannot offer all fans the experience they want. Our stadium is small and the stadium experience is the most important factor driving emotionalisation. We always have to watch out to not gamble away our fans’ loyalty.
What does Customer Relationship Management look like at 1. FC Köln?
Sören Braun: We try to project a 360° view of our customers so as to deliver the right product at the right point in time. It is true that we have a loyal and geographically well definable target group but it is highly diverse. 17-year olds have to be addressed differently from 80-year old fans – before we even talk about the channels. Digital channels and our App are currently the most important tools to stay in touch with our fans. We have tried really hard to show a digital presence by live talks, interviews and the like. Digitalisation generally plays a prominent role for us; we intend to achieve a pioneering role for digital touchpoints in the German National League and have already experimented with VR and are looking at new digital services in the stadium etc.
Boris Hedde: Football is also becoming very international. Clubs like Barcelona have fans all over the world. How do you serve these? And how much interest does Gen Y still take in local clubs?
Sören Braun: To my mind, classic club membership no longer works so well with the younger generation. However, new models are conceivable through such factors as communities and exclusive content in the App which is made accessible through a paywall. We also have to take a closer look at such topics as eSport and use cooperations with a view to also reaching out to these target groups. But we do know it is difficult to stand our ground versus the big clubs.
Dietmar Hagen Horn: We have provided consulting to Benfica Lissabon. Portugal has a wide diaspora, so its fans are scattered around the globe. Most of them probably see a match live only once a year so the emotionalisation factor is largely missing. This is why a digital link with fans was worked on at a very early stage – this really impressed me. In their Social Media Team 30 to 40 people are working across all time zones. I think that German brands also stand a fair chance through digitalisation.
Which areas are of particular relevance to the Customer Experience when emotionalisation and loyalty are centre stage?
Dietmar Hagen Horn: The brand is the Customer Experience! Brands have to create immersive experiences for their customers or fans. You don’t achieve this by sending e-mails. We are currently providing consulting services to a Running brand. They have developed an analysis App which makes it possible for their shoppers to be looked after and advised by specialists in a very professional manner. So the brand is not only responsible for the product but also for after-sales service – it becomes an advisor and companion. The tie to shoppers is never severed. And for the younger generation the gamification of experiences also plays a role.
How do personalised offerings impact customer loyalty?
Dietmar Hagen Horn: You can achieve loyalty in two ways: through convenience and price – like Amazon for instance. This is relatively easy. Or alternatively through personalisation. To this end, I need data about the shopper but they will only submit this if they see added value. It is key that this added value is obvious to shoppers beforehand – otherwise I will not get their data – only then will I be able to start with my personalised consulting. This is time-consuming but the more successful strategy in the long run. You don’t have to attract shoppers time and again – they stay.
Boris Hedde: In terms of retail the problem is that sports brands find it a lot easier to get hold of this data then retailers. It is easier for brands to create experiences and emotional ties. For retailers it is so much harder to “vie for” this data. On the other hand, in retail we see that shoppers are already prepared to disclose their data for relatively little value added – i.e. for discounts or coupons.
Dietmar Hagen-Horn: But I also see opportunities in retail by offering advice through technology in webshops – an opportunity that brands do not have. Where AI helps to assess and individually recommend products of various brands. This is a powerful added value driven by technology.
Sören Braun: I think we will see a lot more automated processes here, too, in future. Today, we still have to interpret plenty of data by hand but in future this will also be automated.
So customer data are the be-all and end-all. What about data protection here? How do shoppers view this?
Dr. Kai Hudetz: This is a question of trust. When shoppers trust a company they also disclose their data. Data acts like a flywheel, the more data you disclose the better the results you get. I know from conversations that the most important position in retail currently is the data scientist. But you have to find one to start with.
Final question: If we met in two years’ from now, what would be the central aspects for customer loyalty then?
Dr. Kai Hudetz: The pivotal theme will actually be data use. The sensors are there, data is collected, now the right conclusions must be drawn from it. All innovations are initially viewed with scepticism. It is true that the results are still somewhat clumsy today, but developments are not linear and advance in fits and starts.