From CRM to FRM: applying CRM in ...
the classic CRM models that have been much discussed in the literature need to be adapted for such a specialist sector.1,3 The unique characteristics of the sport and its fans need consideration when developing or implementing CRM techniques. As a result, a new CRM framework which applies learning from other industries and considers the THE NEED FOR CRM IN FOOTBALL The football industry lags behind other industries in implementing customer relationship management CRM techniques and so it has ���follower��� advantages in learning from mistakes made elsewhere. There are, however, crucial differences in football compared with conventional businesses as a result 156 Database Marketing & Customer Strategy Management Vol. 13, 2, 156���172 Palgrave Macmillan Ltd 1741-2447/06 $30.00 From CRM to FRM: Applying CRM in the football industry Received (in revised form): 18th October, 2005 Garry Adamson is Managing Director of the management consultancy Adamson Solutions. He recently qualified with distinction in the Football Industries MBA course at the University of Liverpool, and has a degree in business studies. He can be contacted at firstname.lastname@example.org Warwick Jones is Dean at the Bristol Business School, University of the West of England, Bristol, UK. Alan Tapp is Reader in Marketing at Bristol Business School. He has published over 35 articles in leading journals and international conferences as well as a best-selling textbook. Much of his research has been sponsored by organisations, for example IBM, Christian Dior and The Chartered Institute of Marketing. He is on the Editorial Board of the Journal of Database Marketing & Customer Strategy Management. He has undertaken research, consultancy and training for organisations as diverse as the NSPCC, The Institute of Direct Marketing, National Centre for Educational Technology, Business Strategies Ltd, The Royal Mail (now Consignia), The CIM, IBM and Coventry City Football Club. He is the author of ���Principles of Direct and Database Marketing���, now in its second edition. Abstract In this paper, the authors develop a conceptual and implementation framework for ���fan relationship management��� (FRM) that learns from the successes and failures of conventional customer relationship management (CRM) but considers the special nature of football. Although often not explicitly described as such, in reality most CRM is a mixture of transaction and relationship marketing, often leaning towards the former. Here, the authors examine the current state of CRM implementation within the football industry based on information collected from football club business managers. Based on existing knowledge about supporter behaviour the notion of FRM is developed. The authors believe that FRM provides an appropriate balance between transaction and relationship approaches. The paper discusses the football industry���s approach to CRM and includes an in-depth case study into one football club���s attempt to implement CRM. These results suggest that the football industry may be replicating mistakes already made by mainstream business sectors, reinforcing the need for FRM. Warwick Jones Dean Bristol Business School, University of the West of England, Frenchay Campus, Bristol, BS16 1QY Tel: 44 (0)117 344 3439 e-mail: email@example.com
a rather ill-defined, misunderstood and, indeed, unproven concept. CRM developed from the need to consolidate a wide body of thought into a manageable term that inevitably became an acronym.9 While academics have concentrated on the theoretical development of relationship marketing, in the commercial world, CRM originated from IT-led solutions to the problem of channel integration with a little bit of direct and database marketing added in. More recently, management consultancies have earned considerable sums introducing firms to the idea of CRM as a way of delivering company-wide market orientation strategies. Figure 1 summarises the evolution of CRM from a channel integrator to a fully fledged driver of relationship marketing. In most respects this evolution mirrors much of what is taking place at present within the football industry. The biggest clubs ��� Chelsea, Arsenal, Manchester United ��� have reasonably sophisticated channel management systems with, for example, telephone bureaux taking inbound enquires and making outbound sales calls. Websites are set up to allow fans chat facilities and contact with the club, though reply times and quality may be variable. Sports franchises across the spectrum have been transformed by ticketing systems that allow easy sales of match day tickets ��� with the functionality to capture supporter data. Apart from season ticket reminders and merchandise sales pitches, however, few proactive communications tend to take place. Most football clubs including those mentioned above, concentrate on transaction marketing at the expense of relationship marketing. Exceptions include Charlton Athletic, Norwich City and Ipswich Town ��� all ���community��� clubs that attempt to create a more cosy specificity of sport, is required for football clubs. In this paper, the authors develop a conceptual framework, called ���fan relationship management��� (FRM) and examine how the current reality compares with theory. The notion that building relationships with customers increases their loyalty has been, at least in theory, one of the core aims of CRM strategies.3 Within football, loyalty levels are assumed to be much greater than in conventional industries and this has led to an (erroneous) belief by most clubs that they can take their fans��� loyalty for granted. These beliefs persist and football clubs have often been accused of ignoring the needs of fans4 and abusing their ���perverse loyalty and fanaticism���.5 Relatively few clubs are aware of the small but growing body of literature that challenges the conventional wisdom that supporter loyalty is ���a given���. Recent studies have highlighted different segments of football fans that, for example, are not loyal to one team, or may be attitudinally loyal but not behaviourally loyal.6,7 Tapp���s 2004 work suggests that for some fans a relationship building approach may be appropriate in supporter retention, while for other types of fans transaction marketing may be profitable.8 Hence, a segmented approach enabled by CRM should pay dividends. In this paper an in-depth case study of CRM in one club is used to highlight important theoretical and implementation issues. But CRM is not a precise concept and definitions of CRM are inconsistent. Hence the next section defines CRM as the authors believe it should be defined for the spectator sports industry. CRM IN SPORT From an academic point of view, it would not be unfair to describe CRM as Palgrave Macmillan Ltd 1741-2447/06 $30.00 Vol. 13, 2, 156���172 Database Marketing & Customer Strategy Management 157 From CRM to FRM: Applying CRM in the football industry
and implementation is often unsuccessful because the firm sees RM as a strategic option to be tested, rather than as a set of enduring beliefs that will shape all aspects of the business. Some elements of the CRM armoury apply more strongly to sport than others. The importance of supporter loyalty and supporter segmentation has already been mentioned. Segmentation by customer value (in this sector by asking how much fans are worth to the business through their lifetime) has been identified by some writers and practitioners (notably Gamble et al.)12 as extremely important. Other aspects of CRM may apply only as optional refinements rather than as core delivery, however. For instance, the thinking behind 1:1 marketing ��� treating customers as individuals ��� comes up against the desire of supporters to be seen as a group: they see atmosphere. These clubs will reward loyal fans with, for example, free transport to selected away fixtures. But these are exceptions: most clubs pay little attention to the central tenets of relationship marketing: dialogue, trust and mutual respect. Gronroos, a key figure in the development of the theory of relationship marketing (RM), would supplement these with ���shared ideals���, ���mutual benefit���, and a ���commitment to continue the relationship���.10 For Gronroos, relationship marketing is more than a set of activities and more, even, than a ���strategy��� for the firm. For him it is the very essence of business: a philosophy that is deeply held by all in the company, placing a commitment to its customers higher than maximising short term profits.11 However, Gronroos observed that relationship marketing is often done in a very superficial way ��� 158 Database Marketing & Customer Strategy Management Vol. 13, 2, 156���172 Palgrave Macmillan Ltd 1741-2447/06 $30.00 Adamson, Jones and Tapp Figure 1: The evolution of CRM in companies The evolution of CRM in companies Customer data from each channel is removed and amalgamated into one data record. This is complex and takes time to establish. Stage 1 Stage 2 Stage 3 Database marketing: here the company manages inbound and outbound interactions with customers. Predictive techniques used to sell efficiently to customers. This is transaction marketing. IT-enabled ���true��� relationship marketing. Here the CRM system is merely part of a major, company- wide, commitment to creating and maintaining relationships with customers: dialogue, information sharing and transparency lead to respect and trust ��� and a commitment to the future.