The criteria that brands use to evaluate potential partnership opportunities have evolved over the decades since sports and entertainment sponsorship was first recognized as a discrete marketing function.
Where once the overall reach of a property and the potential for media coverage were at the top of the evaluation scorecard, marketers now judge the potential of a partnership using much more sophisticated measures, including demonstrable strength of a property’s brand, how well it will drive results through activation and the ability to provide critical data-driven audience insights.
One increasingly important indicator of a rights holder’s ability to deliver value is the presence and performance of a loyalty program. While serving to build and reinforce the bond between a property and its fans, rewards and loyalty programs also offer brand partners a direct activation platform to generate awareness and drive behavior among a key target audience.
Loyalty programs of all stripes, from frequent traveler programs for airlines and hotels to experiential programs such as Sony Rewards and Verizon Up, are undergoing tremendous change due to a number of factors—including user fatigue and demand for higher value from members.
That has led to a significant shift away from points-based programs, as consumers seek more immediate benefits of membership. According to Loyalty360, the association for customer loyalty, points-based programs can prove expensive for brands, which has led many to limit rewards. That in turn has “lead to consumer backlash and disengagement…Consumers are increasingly unwilling to wait for distant redemption opportunities, particularly when their spending accrues far fewer points and miles than in the past,” according to a September report from the association.
The alternative many progressive marketers are exploring is paid models that deliver immediate benefits to members. In fact, one of the newest instant-value loyalty programs was just introduced not by a national consumer brand, but by MLS club LAFC.
The team’s LAFC Gold program—which season ticketholders are automatically members of—ditches reward points for four tiers of membership—one free and three paid—each with corresponding benefits. LAFC executive vice president of revenue and data strategy Ryan Bishara told Sports Business Journal that roughly 1,000 fans signed up in the program’s first couple of weeks.
The type of forward-looking approach demonstrated by LAFC in developing a loyalty program that meets the current needs of fans is something sponsors should be looking for as they assess which prospective partner is most likely to deliver value and results. Conversely, properties that prove they are staying ahead of the curve in their marketing and other operational aspects of their business will be the most successful at attracting and retaining partners.