I knew 2009 was going to be an uphill battle for my business when last October President Obama stated at a town hall meeting in Indiana “You can’t get corporate jets. You can’t take a trip to Las Vegas or go down to the Super Bowl on the taxpayers dime.” See my niche segment of the sports marketplace specializes in corporate incentives wrapped around major sporting events such as the Super Bowl. Many of the prize packages we create for incentive contest winners include private airfare, hotel accommodations, and event tickets. The contests we develop mainly for Fortune 500 sales teams aim to drive revenue and raise ebitda increasing a businesses bottom line production. The program costs a company incurs on these incentive trips helps to keep thousands of hospitality industry personnel employed. There is powerful trickle down effect on each piece of business which flows through hundreds of hands all the way through to the guy making a $5 tip for handling your bag at the airport.
Unfortunately this business as well as many other businesses in the sports industry slowed earlier this year after the credit crisis virtually shut the faucet on corporate spending. It was obvious that many companies directly and indirectly affected by the recession as well as the eventual economic collapse needed to work to get their balance sheets back into shape. This meant reducing operating costs which included trimming marketing budgets and laying off employees. The good news is many businesses made quick rebounds in just a couple of quarters to show profit gains. The bad news is in many cases this was caused by extreme cost cutting measures having nothing to do with revenue generating business growth. The next earnings report is where it is going to get very tricky for companies to look good as they need to start producing revenue again. Incentive contests, promotions, and sports sponsorship programs are now needed more then ever to get the engine going.
Interestingly enough many companies no longer face the dilemma of not having actual dollars to spend on these meaningful initiatives. You would think the solution would be quite simple then. The issue currently is that these companies are so fearful of being singled out by politicians for what they term frivolous spending that they are shutting down some of these needed practices. Fortunately our overall business as well as many others in sports have picked up some in the last couple of months but we are still having to prod some clients who act like a deer frozen in a headlight when it comes to spending on sports. They want to get back in the game but they are terrified of being perceived in a negative light. This trepidation will have a devastating effect on a companies ability to grow its business.
Why is sports being targeted? When a company throws ten million dollars into a campaign for one of their products to tie into a Hollywood film no one bats an eye or asks questions. Tying in with Tiger Woods or the Super Bowl? That’s another story. My specific business niche in many ways gives a better ROI then most advertising campaigns. Winners of these incentive contests have to produce sales above their quotas to get invited on the trip. There is a clear cut revenue goal. If you hit it you go on the trip. If you don’t you stay home and watch it on television.
A short while after hearing President Obama’s words on going to the Super Bowl I happened to catch him on ESPN sitting front row at a Wizards/Bulls game. How come he gets to go to sporting events on the tax payers dime but I have to stay away? Earlier this month Nancy Pelosi and our house of representatives approved a bill for 550 million dollars to purchase private aircrafts including a Gulfstream plane so our leaders can fly to places like Costa Rica and Panama for “government educational trips.” This smells of hypocrisy.
Moving forward its imperative that we in the sports industry not be hesitant in promoting our business. We shouldn’t be embarrassed for using the word “luxury” when selling suites at a game. We all know sports is a huge business around the world nowadays. Sponsorship, promotion, media, and hospitality are all legitimate must have business practices that help companies grow and succeed. There is nothing wrong with that.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment