NHL’s Relevancy Problem

In my last post, I vented frustrations about the NHL’s lockout of its players over contract issues. My conclusion was that the NHL does not care about fans, so why should fans care about the NHL? Yes, I am perturbed by the NHL’s inability to avoid work stoppage and the resulting interruption in hockey, but the league faces a much larger problem that will loom larger with each passing day of the lockout. Hockey is but one sport in the sports entertainment landscape… and a relatively small one at that in the United States. Maintaining relevance as one of the major sports properties will become more difficult for the league if it continues to wage battle at the bargaining table instead of on the ice.

The early fall season is a sports fan’s dream: College football and NFL seasons are underway, MLB is headed toward its postseason, NASCAR is in the homestretch for the Sprint Cup, and the NBA and college hoops are waiting in the wings to get started. On top of all this activity, soccer is enjoying newly found interest in the U.S. through MLS expansion and expanded coverage of the English Premier League. A prolonged absence by the NHL will result in the league losing relevance among casual sports fans, the very ones needed to expand the fan base for hockey.

In a recent blog post, Bleacher Report CEO Brian Grey points out that several U.S. sports properties are on the rise in terms of heightened sponsor interest. Expanded playoff format for MLB, exciting rookie quarterbacks in the NFL, intense geographic rivalries in MLS, and new energy in New York and Los Angeles for the NBA increase the value of associating with these properties for sponsors. In contrast, the NHL sits on the bench as owners and players argue over what percentage of revenues each side should get.

The NHL has a very passionate core fan base, and while we (I have to count myself among this audience) are likely to forgive and return to the sport there are many more sports fans than us for which hockey is a take-it-or-leave-it proposition. The NHL worked diligently since the last lockout to attract people to the sport. In the process, it made the NHL more valuable to corporate sponsors, which is one reason why the league’s annual revenue increased from $2 billion to $3 billion. Sadly, many of the gains made in recent years by the NHL stand to be lost in a relatively short period of time.

The relevance clock is ticking, National Hockey League. Your great sport will become marginalized (some would say marginalized further) if you do not get your product back on the market quickly. Consumers have many other options for sports entertainment, and sponsors have other (and more effective) options to reach and engage their customers.

The NHL Doesn’t Care – Why Should We?

I am a lifelong hockey fan, which is a noteworthy claim coming from someone whose childhood years in Mississippi in the 1970s definitely did not include playing hockey. My father was French-Canadian, so I was indoctrinated on hockey history and the game itself at an early age. Today, I am still a hockey fan, and while I love the National Hockey League I am now making a point to call myself a hockey fan, not an NHL fan. The reason is simple: The NHL does not care much about its fans, so why should fans give emotionally and financially to the NHL?

I am convinced of the NHL’s lack of regard for fans given that the third work stoppage in the last 18 years is about to commence barring a miraculous 11th hour deal between the NHL and NHL Players Association. NHL team owners want to reduce the proportion of hockey related revenue players receive. Of course, players have no interest in giving up their piece of the money pie. The result is going to be another lockout. The prospects for a quick resolution are not good – heck, the two sides are hardly talking to each other to negotiate a settlement even though the deadline has been on the horizon for months.

For hockey fans, the takeaway is clear: the NHL does not care about its fans. On the surface, such callous disregard for the impact a lockout will have on fan relationships seems unthinkable. How could a business not work tirelessly to make sure its core product remains on the market and available to its customers?

The reality is that fans are down the list in importance as a customer for the league. The NHL’s primary customer is its team owners. It is understandable that owners’ interests must be protected; no owners equals no NHL. But, the perception is that owners’ interests are being served to the exclusion of paying customers. However, fans are not even at the top of the charts when it comes to paying customers. Media rights holders and corporate sponsors are a higher priority for the NHL than the hockey fan or family that ponies up for tickets to watch their local team.

The NHL will keep players locked out until a deal is reached that satisfies the interests of the league’s key customers, the owners. Oh, a sense of urgency might develop if media and corporate partners become vocal about the need to get back on the ice. As for fans, our voice is not being heard even though social media gives us a platform for venting our frustrations.

The fan base for hockey is much smaller than other major sports in the US, but fans are rather passionate about their hockey. The expectation is that these fans will return when the labor mess is sorted out. Don’t be so sure, NHL. After all, hockey is only a game. And, as long as you continue to play games with your fans do not expect us to welcome you back with open arms if there is a protracted lockout.

Another Tale of ‘Differentiate or Die’

My favorite marketing mantra is the title of the Jack Trout book Differentiate or Die. It is at the same time straightforward, provocative, and applicable in many situations. In a world in which we have a great deal of choice for most of the products and services we buy, standing out from competition is a must. To be clear, it is not about standing out in a dye-your-hair-pink way; it is defining what you or your business does better or uniquely that distinguishes your brand from similar offerings. Without differentiation, it is very difficult to make a persuasive case that your brand offers sufficient value to justify product purchase. In the extreme case, failure to differentiate can result in business death.

Today’s installment of Differentiate or Die is brought to you by the Atlanta Thrashers. The NHL franchise is being sold to an ownership group that will relocate the team to Winnipeg. The Thrashers were the second coming of the NHL in Atlanta, which lost its first team in 1980 to Calgary. The second life of the NHL in Atlanta lasted 12 seasons but met the same fate as the Atlanta Flames 21 years earlier. Why?

There are many reasons, too many to discuss here. Perhaps the greatest challenge is the stiff competition for the sports entertainment dollar in the market. The Braves, Falcons, Hawks, Georgia Tech, and University of Georgia are formidable obstacles. And, that is only sports entertainment competitors. When other entertainment, leisure, and cultural opportunities are considered, the Thrashers faced immense competition in a nontraditional hockey market.

Competition was a significant issue for the Atlanta Thrashers, but in the end it would be too easy to blame the team’s troubles on the other sports properties in the area. The demise of the Atlanta Thrashers is due in part to what it did not do: differentiate itself from other sports entertainment brands in Atlanta. It was part of the sports landscape, but being a big league team is not a sufficiently compelling reason to become a fan, sponsor, or ticket buyer. It does not matter if you sell hockey or hot dogs, or whether you are a major league sports property or a local mom and pop business, differentiation is essential. Can you answer the question “How am I better, unique, or different?” I hope so.

Bigger not Always Better when Selecting Marketing Partners

Remember times from your youth when a group was divided into teams to compete? Often, the bigger kids got picked first because, well, they were bigger. Another example of a “big bias” is shared by Zig Ziglar who points out that if a car stops at a group of kids to ask directions, the driver is likely to direct her question to the biggest child in the group… even though he may be the dumbest one in the bunch! The tendency to favor the tallest, largest, oldest or those perceived as strongest is normal, but sometimes flawed.

When it comes to selecting marketing partners, we would be well served to think back to our childhood experiences and remember bigger is not always better. This analogy came to mind this week when the National Hockey League announced a new 10-year TV broadcast deal with NBC Sports. Fan interest has grown since the NHL returned from a year-long lockout in 2005, and the Winter Classic has quickly become a New Year’s Day sporting tradition in the U.S. The NHL’s current American TV broadcast partner is Versus, a Comcast property which is now part of NBC by virtue of the NBC-Comcast merger. When the NHL debuted on Versus in 2005, it was the up and coming sports channel’s best known professional sport property.

Fast forward to 2011, and the NHL attracted the attention of other networks interested in acquiring broadcast rights, including ESPN. NHL games were broadcast on ESPN prior to the lockout of 2004-2005, but unimpressive ratings and an abundance of other sports content left ESPN with little interest in bringing the NHL after the lockout. But, ESPN was in the mix for acquiring TV broadcast rights, primarily interested in broadcasting the Stanley Cup Playoffs. In the end, the NHL saw NBC as a more committed partner, one that will put resources toward promoting hockey. In contrast, NHL would be competing for attention and air time on ESPN networks that already serve up heavy portions of NBA, college basketball, college football, NFL, and MLB.

Some observers have criticized the NHL for not partnering with ESPN. Yes, ESPN is the dominant sports media brand today… with the key word being “today.” ESPN made its mark by securing leadership of televised sports in the 1980s. The media landscape has changed, and we have many options for consuming sports content- streaming games online, blogs, podcasts, mobile applications, and social media networks, to name a few. There are no guarantees that the behemoth of sports television will be the dominant sports brand of the digital age. In fact, history suggests that companies with a dominant position struggle to adapt as technologies and consumer preferences change. Look no further than General Motors and Microsoft as examples.

Bigger is not better when it comes to selecting marketing partners. Commitment to your success matters- who is willing to invest in growing your business?

NHL.com – “NHL, NBC Sign Record-Setting 10-Year Deal”

Make Product Design a Fantasy

An often repeated saying in marketing is that “customers do not buy products; they buy benefits.” In other words, we are interested in a product not for what it does, but rather we are interested for what it can do for us. Yet, marketers often get bogged down in the design and production of products, and the desires of the customer often are overlooked. In their book Creating Breakthrough Products, Jonathan Cagan and Craig Vogel call for a different approach to product development when they say “form and function should follow fantasy.” This view requires a customer-centered approach to designing products.

Fantasy is an emotional state that can be felt through more satisfying experiences with a product. The question a marketer should ask is how well do products under his or her watch help customers fulfill their fantasies? Also, what tweaks can be made to make a product more capable of delivering a meaningful customer experience? These questions came to mind as the National Hockey League prepares for its All-Star Game weekend in Raleigh, North Carolina beginning tomorrow.

All-Star games in professional sports are exhibitions that feature top players but generally uninspiring play. And, there is little innovation in the design of the product as it is usually a game that pits all-star teams made up of players from a league’s two conferences (e.g., Eastern vs. Western Conference, American League vs. National League). The NHL sought to spark interest in this year’s All-Star Game by foregoing the East vs. West format in favor of selecting teams like a fan might draft a fantasy hockey team. A captain and two alternate captains for each team will draft from a pool of players selected to play in the game. Friday night’s player draft will perhaps be the highlight of the weekend, adding intrigue to the game itself on Sunday.

We must remember that doing things a certain way because that is how they have been done always is not a recipe for marketing success. Customers may prefer another way, one that adds more value to the products or service you offer. Invite your customers to share their fantasies, and then develop form and function to help them realize their fantasies.