“Incentivising” fan engagement – Effective fan relationship management or just another means to create a new revenue stream?
by Finn Rubach
Introduction
Incentivizing fan engagement has rapidly gained traction within the sports industry. As sports organizations seek innovative ways to deepen fan loyalty and drive revenue, the practice of exchanging rewards for fan data and interactions has become a focal point. This article explores the trend of incentive-focused fan engagement, presenting an objective assessment of its benefits and costs, and aims to answer the critical question: Is this trend an effective fan relationship management tool or just another revenue-generating strategy? As the 2024 edition of the Financial Times Business of Football Summit came to an end just yesterday, this article will draw most of its examples from the biggest sport in the world.
First things first, to ensure a shared understanding of what the terms used mean; here is a breakdown of the definitions of the key vocabulary:
Fan Relationship Management (FRM), similar to the more known concept of customer relationship management, is defined as:
the collection of a fan’s demographic and psychographic data,
the systematic analysis of the data and content tailoring to increase return rates,
and the ability to segment fans based on shared preferences, which enables personalised communication.
Hence, FRM is based on the concept of exchanging data for customised and valuable experiences.
iSportConnect defines fan engagement as “the process of interacting with fans before, during and after events to encourage their active participation, using a variety of channels and methods, with a view to creating and strengthening an emotional, lasting bond”. Granting fans a more active role Rui Biscaia refers to it as “all the activities either online or offline that are conducted by fans to help the team and other fans”, highlighting the two-way communication of fan engagement.
Incentive-focused fan engagement refers to the practice of granting fans access to sports events, discounts on merchandise and other benefits in exchange for their personal data, spending, engagement with social content, and/or other interactions with the brand (e.g., attending games at the stadium).
The current development – benefits and associated costs
In the last couple of years, many players within the sports ecosystem have introduced new FRM tools. These often come in the form of an app (see for example ‘Official Chelsea App’) or a dedicated website requiring registration for access (see for example UEFA for the EURO 2024). The ultimate aim is to create a direct connection to the fans and cut out broadcasters and social media platforms to generate first-hand data of fans and utilise this data to personalise the digital fan experience, offer rewards and increase fan loyalty.
Before moving on to critically evaluate reward-based fan engagement apps, here is a breakdown of how they work:
Do apps and fan loyalty programs work as an FRM tool? The data and practical examples suggest that this is the case; the three highest-scoring clubs of the 2021/2022 Fan Engagement Index all offer their fans access to “LIVE streaming and commentary, On-demand replays and highlights, Player and manager interviews, Press conferences, Fixtures and downloadable calendar, [and] Results” via the ‘official EFL iFollow app’, a centralised FRM tool by the league. According to Deloitte, self-described avid fans spend six times more than self-described casual fans annually; hence, there is significant commercial potential to convert casual fans into avid supporters through incentive-focused fan engagement and loyalty programs.
However, potential drawbacks also must be assessed. Firstly, there is a psychological difference between fans and usual consumers, hence, copying what works for consumer loyalty programs does not necessarily work for fan engagement tools. Fans are driven by emotions and psychologically attached whereas consumers are primarily driven by utilitarian factors such as product quality, price, and convenience. Secondly, incentivising fan engagement creates a chicken race between fans about who is the ‘most loyal’ fan and hence receives the most sought-after rewards, which is counterproductive in building a lasting and collaborative fan culture. Thirdly, if access to matches is one of the rewards, it reduces the access of every fan who decides not to register for the loyalty program, which could diminish the engagement of this group of Match Day fans. More broadly speaking about accessibility – remember according to FIFA football is supposed to be for everyone – incentivising fans to spend more on merchandising to increase their loyalty program tier, will automatically put people with less disposable income at a disadvantage.
Do such reward-based loyalty programs solve the problem of engaging the younger generations the football business so desperately seeks to win? Time will tell, but Andy Green (Finance Director of the Manchester United Supporters Trust) is convinced that ensuring access to matches for younger fans through youth tickets or by working together with local schools would achieve at least the same level of result.
Conclusion
So, is incentivising fan engagement an effective fan relationship management or just another way to create a new revenue stream? Incentive-focused fan engagement is aimed to monetise fans better and that seems possible thanks to the access to first-hand data and personalised offerings. Can it also be considered an effective fan relationship management tool? Again, yes, in its nature it seems to be an effective tool, creating value in the form of access to news, rewards etc. for fans, for some fans. Sport fans do not behave like typical customers and there are several different fan segments, each with their individual needs. There is a fan segment, which is highly engaged through loyalty programs but there is also a segment of mostly match day fans that do not want to participate in the ‘loyalty chicken race’ and are not concerned about being rewarded for engaging with their club and with the words of Dominic Rosso (Vice Chair, Chelsea Supporters' Trust) “just want to attend the match at a fair price point” to support their club.
In conclusion, incentivising fan engagement is not a silver bullet to magically turn all fans into cash cows. Club managers should look beyond the commercial outcomes of their decision-making and take sports values and societal benefits into account.
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