Market research now drives decisions in the sport industry
We now turn our focus specifically to the sport industry. Except for conducting the occasional project, research has not held a regular role in the typical sport organization. Historically, market research in the sport world has been designed, performed, analyzed, and interpreted by a tenured market researcher sourced from a third-party vendor or partner. These people were likely to have been trained academically on how to collect and interpret data. A person with this skill set was often employed by a professional sport franchise, allowing third-party suppliers to make a living providing these services to sport teams. Examining the historical landscape of larger businesses, such as sponsors, league offices, and agencies, the likelihood grew that a market researcher would be employed in house.
In recent years tremendous growth has occurred in the use of market research to drive day-to-day business decisions in sport. With database marketing and the Internet allowing for ease in data collection and data storage, properties now have valuable data at their fingertips. Interpreting that data and putting the findings into practice is the next big hurdle, and this challenge has spurred many organizations within the sport industry to bring on staff internally to facilitate the wide array of market research needs. No longer is there a typical market researcher or analyst; that title can mean something different to each organization that employs a researcher. In one instance you could have someone who is skilled at managing an influx of syndicated research data from various sources. Another instance may present a person who is well versed in designing a survey questionnaire and performing stable data collection. Yet another organization may have a person who truly analyzes data, hunting for trends and pulling out findings. To complicate matters further, an analyst at one place may have 15 years of experience, whereas an analyst in another organization may be an intern who will be returning to school in 3 to 6 months.
Each of the aforementioned skill sets can serve a specific need. Needs for research arise from different places across the sport industry. The following examples show how different organizations use market research services.
Professional Sport Leagues
A market researcher within a professional sport league serves several purposes. Media ratings and broadcast research have high relevance because leagues typically control a portion, if not all, of their television rights. All major sport leagues employ media researchers who mine ratings data to support the rights fees and advertising fees charged. Nielsen and Arbitron provide the two primary ratings measurement systems used at league offices. Media research also helps to validate contractual obligations that leagues owe to sponsors and advertisers.
A market researcher at a professional sport league often satisfies the internal consumer research needs across multiple departments. Primary consumers of research include the sponsorship, ticketing, and marketing departments. A league office needs to understand consumer behaviors and perceptions as they affect the branding of the league, league partners, and league marks. A consumer may well have different perceptions and intentions toward the Tampa Bay Lightning brand, Tampa Bay Lightning sponsors, and the Tampa Bay Lightning experience than he or she does toward the NHL and its respective brand, sponsors, and experience. In this particular example, an NHL market researcher might seek out the league’s fans for feedback regarding national broadcasts, methods for consuming the NHL, experience at league-facilitated events (the Winter Classic, All-Star Game, and so on), and behaviors relating to NHL sponsors. League offices will analyze this data market by market, region by region, and nationwide. Normal practice is to analyze the data across the various fan segments as well (avid versus casual, attendees versus viewers, young fans versus old fans, and so on).
Finally, a market researcher at a professional sport league often serves in the role of advisor or consultant to its member clubs. Not all teams have access to the same resources in terms of staff and budgets, but a league office doesn’t want to look across its member clubs and see a landscape of haves and have-nots. A league office wants to provide as many resources as possible to empower member clubs and support their business operations. No league does this better historically than the NBA through its Team Marketing and Business Operations (TMBO) division. Market researchers within TMBO assist NBA clubs with ticketing research, sponsorship research, premium seating research, impression measurement research, and so on. They share best practices of clubs using market research across NBA, WNBA, and NBADL clubs.
Leagues have the ability to perform market research across multiple clubs at much lower pricing than clubs would have to pay if they performed research by themselves. Investing in these efforts ensures that teams are maximizing the margins in good times and minimizing the effect on revenues in bad times.
Professional Sport Properties
Overall, the use of market research on a day-to-day basis at the professional sport property level has grown substantially over the past five years. Some teams invest heavily across custom and syndicated research, whereas other properties employ no market research in their business operation. At the most basic level, the vast majority of professional sport properties collect fan feedback. Topics frequently covered include event satisfaction (concessions, parking, ushers, and so on), season-ticket holder satisfaction, ticket purchase intent, and fan segment profiling. These studies help an organization keep their finger on the who, what, when, where, why, and how of the fan base. Marketing and ticketing departments use this type of research to create promotions, ticket packages, and at-event features.
Because sport teams have similar business operations and desire similar fan input, Turnkey has noticed some repetitiveness to survey topics over the years. Here is a list of common survey topics:
- Ad awareness
- Brand study
- Broadcast satisfaction
- Broadcasting partner
- Community relations
- Concept testing
- Concession preferences
- Customer service satisfaction
- Demographic profiling
- Economic impact study
- Employee satisfaction
- E-newsletter content
- Fan behavior
- Fan club satisfaction
- Fan entertainment preference
- Food and beverage
- Game-day satisfaction
- Green and recycling behavior
- Group leader
- Hospitality preference
- In-game entertainment
- Internet usage and consumption
- Kids club
- Lapsed season-ticket holder
- Mascot satisfaction
- Media habits
- Media partner
- New ballpark
- New customer
- Off-site engagement
- Online ticketing satisfaction
- Parking and logistics
- Partner and sponsor satisfaction
- Preferred start time
- Premium concessions
- Premium seating
- Promotional item preference
- Season-ticket holder satisfaction
- Secondary market
- Social media habits
- Special event satisfaction
- Sponsor category opportunity
- Sponsor or partner summit postevent
- Sponsorship measurement
- Suite rental satisfaction
- Theme night
- Ticketing habits
- TV viewer study
- Uniform preferences
- Unused ticket study
- Website satisfaction
Professional sport properties seem to be engaging in increasingly sophisticated research projects. Specifically, sponsorship measurement and ticket-pricing studies have proved to be highly effective in maximizing revenues within those respective departments. Sponsorship departments are under significant pressure to justify rights fees and measure the effectiveness of a corporate partnership. Brands are being held accountable internally, and they often rely on the property to provide data. Sponsorship departments can collect data respective to specific brands, categories, or perceptions of sponsors in general. These data are analyzed and translated to help convey to the brand how the partnership is moving the needle with the property’s fan base.
In the ticketing world, all professional sport properties are trying to find the optimal price point to charge for a ticket. What price point will result in unsold tickets? What price point will damage the perceived value of a ticket? What variables should drive the price up or down? Ticketing departments analyze many sources of data to modify prices. Sales data from the primary and secondary market account for two of the more important sources. Knowing the available inventory, prices already paid for tickets, and advanced purchase information help identify the optimal price point going forward. Some professional sport teams use this data to make pricing recommendations every day of the year, but others perform this analysis less frequently. Despite advancements in this area, some organizations opt not perform this analysis at all.
How Much Is Enough?
The question that market researchers get all the time, and hate getting whenever they get it, is this: "How many respondents do I need in my sample?"
No one-size-fits-all answer can provide an adequate response to this question. The best answer is, "It depends," which of course raises the follow-up question, "Depends on what?" When conducting survey research, identification of an appropriate sample size requires consideration of the following issues.
- What is the size of the population to which your inferences will relate?Quite often the size of the population is so large that it may as well be considered boundless (e.g., the U.S. population). But sometimes the population size can be rather small (e.g., season-ticket holders for a class A minor league baseball team in the Southeastern United States).
- How precise do you need your estimates (and hence inferences) to be? Think carefully when evaluating this question. Although many Turnkey clients express concern about not collecting a sufficient sample, oversampling occurs quite frequently. And although an out-of-pocket cost may not be associated with sampling from a fan or ticket-buyer database, asking your customers to answer too many surveys has a hidden cost. Certain fields require incredible precision, such as spinal surgery and air-traffic control. On the other hand, when estimating the proportion of game attendees who approve of the music selection, plus or minus a few percentage points can certainly be deemed tolerable.
- What is the budget? More often than not, larger sample sizes result in higher cost. Even if the sample source does not require out-of-pocket spending, a higher number of respondents results in larger data files, more intricate analyses, and more resources required to compile findings. If onsite research is the methodology of choice, larger sample sizes require more time in field, which usually means higher cost for staffers to administer interviews. And, of course, online research using third-party panels produces a one-to-one correlation between cost and sample size. If your budget does not allow you to collect enough respondents to have solid, trustworthy data, you are probably better off skipping the project or identifying an alternative methodology.
Only after population size, precision, and budget are identified can a researcher adequately address sample size appropriateness. Turnkey finds that a typical survey project with only one population of interest requires anywhere from 250 to 500 respondents to generate a robust data set. Why is the range 250 to 500?
Well, it depends.
The primary objective of a sport sponsorship is to use the assets (marks, hospitality, fan reach, event access, and so on) of the property to drive the business objectives of the sponsor more effectively than it could without the sponsorship. Generalizing about how sponsors use their sponsorships is difficult. Comparing the use of sponsorship by a global company like Coca-Cola to that of NovaCare, a Philadelphia-based rehabilitation company, makes little sense. More broadly, one brand may want to build awareness of a new product to a male audience. A second brand may want to incentivize partners and employees with exclusive hospitality. And a third partner may be sponsoring purely as a defensive measure to keep a competitor from doing so and effectively building their market share. Objectives should be clearly identified during any sponsor relationship.
Because every sponsor and sponsorship has different objectives, market research related to sponsorship can vary. Before beginning any activation, a sponsor should put effort into identifying baseline metrics of any key performance indicators (KPIs). All measurements from that point on will be compared with the baseline metrics to show the effectiveness of the activation. Without a baseline measurement, no metric is available against which to base conclusions on the effectiveness of the sponsorship.
Generalizing about the use of market research in regard to sponsorship is challenging. Generally, the sophistication of market research within a sponsor organization exceeds that of a typical professional sport property. Many sponsor brands have a market research department at their disposal to facilitate studies related to all marketing, including the sport sphere.
As in many situations, budget constraints limit sponsorship measurement. Brands have been known to comingle their research, trying to reduce cost by including sponsorship-related questions in broader brand-tracking studies. Doing so masks the differences between typical consumers and sports fans. Brands sometimes divest the measurement process to their agency of record, which is arguably the equivalent of the student grading herself.