Being relegated is one of the worst things ever. It’s heartbreaking. You are left wondering whether your club will live to see another day. Understandably so. Especially because relegation has such a huge impact on a club’s revenue. So, if you have been relegated or are facing that prospect, first and foremost, I feel for you. And I am sorry that you have to face that. But I have great news for you. Relegation is not, and should not be, the end of your clubs’ dreams. There is a way to come out on top, at least financially, from this.
So in today’s blog post we will discuss:
The cost of relegation
The counterintuitive way you can avoid paying the total cost of relegation
How this "counterintuitive" way will help you keep your revenue high
Before we dive right in...
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The cost of relegation
This section might feel like I am rubbing salt on a sore wound, but bear with me. Covering this will help us be aligned on the issue we are trying to solve, together.
It’s not just the emotional stakes that are high when you are faced with the idea of being relegated. It’s also the financial stakes. This of course looks different depending on the league you are playing in. For example, getting relegated from the English Premier League is much different from getting relegated from a regional league. Although both are completely devastating, there are different comeback prospects, financially.
The solution that we are going to describe in this blog post is more appropriate for clubs facing relegation from the top three leagues. Whether that is in England, Germany, or Switzerland, it makes no difference. So a good way to think about this is, being relegated from Premier League to the Championships. And from the Championships to League One. And of course from League One to League Two.
But don’t be discouraged if you are facing relegation from a lower league. We can still help you in your trying time. Check out these blog posts instead and then request your free demo:
Severe decrease in revenue
I won’t dwell too much on this one because it will be a bit like preaching to the choir. But here are a few quick examples of the severe impact of relegation on the finances of a club.
- You will miss out on League Distributions. And the higher the league, the higher the loss.
- It will be harder for you to get more bums in seats – to put it quite frankly. During the 2011-2012 season when Wolves, Bolton, and Blackburn all bowed out of the Premier League, they saw crowds drop by; 20%, 30% and 40%, respectively. Imagine that! For Blackburn, it means their stadiums were half-empty.
- There is nothing worse than a half-empty stadium when trying to negotiate sponsorship deals.
- And of course, with only half the seats in the stadium occupied, there is only so much matchday merchandise, food, and beverages you can sell.
And of course, with such financial woes, you will be desperate to get back to your heydays. Which is great. But the combination of a bad situation and desperation does not always produce desired results. So you will need to be as level-headed as you can be so that you can fix the situation as soon as possible. While we can’t do much for you in this instance, when it comes to how your players perform on the field, we can certainly help you with getting real revenue, in this tough period of the club’s life.
The counterintuitive way you can avoid paying the total cost of relegation
Before I guide you through how to come out of relegation in the best financial health possible, let me address one thing first. Unfortunately, there is a cost to relegation. The first cost on your finances that we discussed is losing out on League Distribution. For most clubs in the UK, Germany, and throughout Europe, for example, this value is up in the tens of millions. There is nothing we can do at all for you here. So you do and will pay that cost.
But you don’t have to pay the total cost of relegation.
And what do I mean by that? I mean that, while you will lose out on League Distributions, there is no reason why your ticket sales, sponsorship agreements value, and matchday merchandise sales should be severely impacted. So you don’t have to pay the total cost of relegation in that sense. This is where you focus on what you can change instead of lamenting about what you cannot change.
So let’s dive deeper into this and discuss what this counterintuitive way of avoiding paying the total cost of relegation is.
Choose to invest over cutting costs – at all costs
Okay, so you have been relegated. What is the first thing you think of? Costs. More specifically, cutting costs. You have less money coming in so you have to make sure to keep your costs low. And this is indeed a good approach. Basic economics. However, you should not try to cut down your costs at all costs. And what do I mean by this?
When clubs are relegated, one of the first places they look when trying to cut costs is their spending on software and technology. Again, great approach. There is no need for you to have three different customer relationship management systems (CRMs). The dire mistake comes however when you see software and technology as something to get rid of versus something to help you in your times of financial trouble. Let me make a qualification to this statement though. Not all software is necessary. But there is one which is absolutely, without a doubt, crucial to how well you recover financially, after being relegated.
And this is a sports CDP.
The sports CDP is your savior during times of relegation
Sell more tickets with a CDP
When you are playing in the highest league, it can be easy to take for granted the importance of communicating with your supporters in a way that they can appreciate. But when you have been relegated, you understand the importance of this. Or at least you should. At this crucial time, your supporters are sad and disappointed and some hold strong opinions on what could have been done better. That’s the reason they stop coming to games. Not because they are punishing you. But because they are experiencing deep and strong emotions.
You are also having a deeply emotional time. So why not embrace this new space you both find yourselves in and use it to both of your benefit? How?
Firstly, you can start off by finding all the supporters who had come to the fateful game where you got relegated. You do this through the segmentation functionality of the CDP.
Then you send them an email about how disappointed and sad you are about the outcome of the game. Acknowledge their hurt.
In that email, express your hope for the future of the club. You want your fans to support you now more than ever, so communicate that. And to incentivize this, give them a discount to encourage them to come to your next game. Again, you can do this through the voucher functionality within the CDP.
You can then keep track of who has bought and who hasn't. For those who have bought, send a trigger message thanking them for their unwavering support. For those who haven't bought the tickets, tell them about all the changes you are committed to making. And remind them that you cannot do it without them. Offer the same discount once again. You can do all this with the CDP.
This is just but one example of how you can do it.
What makes the CDP superior in this area
The CDP is effective for this because you can do everything on one platform. Time is of the essence when you have been relegated. So you want to sell more tickets with the least possible amount of effort and time. Can you imagine having to collect your matchday ticket purchase data from your ticketing machine? Then manually figuring out who attended and who didn’t. And then go to your marketing automation system to create the actual email. And then having to check back with your marketing automation system to find out who has bought the ticket and who hasn’t. Then again choosing who to retarget. This is tedious. You simply don’t have the time to allocate to this kind of activity.
With a CDP, it will be as simple as pressing a few buttons and writing some compelling copy – which will be easy for you since you are so passionate. And then click the send button.
So if you have been relegated, do the counterintuitive thing and choose to invest in a sports CDP. Instead of shutting yourself off to the end of getting help from technology.
Negotiate sponsorship agreements of higher value
The key to negotiating sponsorship agreements of higher value is being able to prove a strong return on investment. The sponsor wants to know, will I get something back from this. And the beauty of being relegated in this era of social media is that people love to support the underdog. So instead of trying to deny your current situation, own it and make it work for you.
With the CDP, you can prove a higher return-on-investment by:
Showing your potential sponsor the size and health of your contact database.
Just so we are on the same page, the CDP will act as your contact database, so this is not something additional you need to get. Show your potential sponsor that you know who your supporters are and that you can communicate with them whenever you like because you have their contact information. Read these two blog posts to understand why this matters: 2 surefire ways to boost your sponsorship value and this is why your contact database is still not growing. The CDP is the only software out there that cleans your data and keeps it completely up-to-date. So with a CDP in your arsenal, your potential sponsor will see that you mean business.
Delivering on your end of the deal
It’s one thing to get a sponsorship deal. It’s entirely another to deliver and meet the targets of said deal. The CDP is the key to meeting your goals. Remember how seamless and precise it was to sell more tickets with the CDP (discussed above). It’s just as impressive when trying to activate your supporters to engage with your sponsor. Knowing which supporters to target with your sponsor’s offers, then targeting them with a message you know they will appreciate, and keeping track of who has engaged and who hasn’t – these are all possible. And, in one platform – the CDP.
Sell more matchday merchandise
Hopefully, by now you understand the logic of a CDP. And you see how easy it is to keep hitting targets with the CDP. Being relegated should not be the reason your club goes into administration or suffers financially. The CDP can indeed be your savior during this tough time if you let it.
The same logic from the ticket sales and sponsorship agreements applies here. The four fundamentals of getting superior sales are:
- Grow your supporter base, continuously
- Collect supporter data with contact information and merge it with your sales data
- Find out which supporter segments you should target with your ticketing campaigns
- Send out relevant offerings to those segments in a way that your supporters will really appreciate
And that is how you would sell more matchday merchandise.
But instead of me telling you how this would work, how about you see this in action for yourself?
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