Corporate Selling Activities and the Determinants of Corporate Partner Retention in the National Basketball Association (NBA)

Article excerpt

Executive Summary

Since 1995-96, television ratings for the National Basketball Association (NBA) have dropped 40 per cent. Attendance has dropped in three of the past four seasons (Longman, 2001). Add to these numbers the increasing competition for sponsorship dollars and corporate support in the sport sector, particularly in markets hosting all four major North American sport franchises. The data suggest professional sport organizations will face an increasingly-difficult task of attracting and retaining corporate sponsors whose interest is directly linked to optimal levels of attendance. In response to this dilemma, a conceptual framework outlining a corporate sales process, "eduselling", was introduced to assist corporate sales managers with the attainment and retention of corporate customers (Sutton, Lachowetz and Clark, 2000). The purpose of this exploratory study is to identify those corporate sales activities that lead to higher rates of retention of corporate customers.

Twenty-nine teams in the National Basketball Association were mailed a 40item survey instrument. Twenty-six teams returned the surveys. Four surveys were excluded from the analysis resulting in a return rate of 75.8 per cent. The results of the study indicated that differences in retention rates existed across the league. This resulted in each of the 22 teams being categorized into one of three groups: Group 1--teams with "below-average" retention rates of corporate customers; Group 2--teams with "average" retention rates of corporate customers; Group 3--teams with "above-average" retention rates of corporate customers.

Key conclusions of the study included: 1) teams need total control over the sale of corporate products in their facility; 2) off-site training and increased number of hours of training for corporate sales staff members are important; and 3) teams which understand that corporate customers need assistance in understanding all the attributes/benefits of a sponsorship program retain a higher number of customers.

Introduction

Since 1995-96, television ratings for the National Basketball Association (NBA) have dropped 40 per cent. Attendance has dropped in three of the past four seasons. From 1990 to 2000, the average television sports audience dipped to 6.8 million from 8.7 million viewers--a 22 per cent decline (Longman, 2001). The data suggest professional sport organizations will face an increasingly-difficult task of attaining and retaining corporate sponsors. Interestingly, in the opinion of one NBA executive, there appears to be much variance among individual NBA teams and their approach to corporate selling (Sutton, 2000). This should lead to uncovering significant differences in the selling activities among teams. To this extent, this exploratory study investigated the current corporate selling activities of the 29 teams comprising the National Basketball Association.

This study is the first in a series of studies investigating the validity of the "eduselling" conceptual framework introduced by Sutton, Lachowetz and Clark (2000). The framework (see Figure 1) was designed to act as a guide to assist corporate sales managers with the attainment and retention of corporate customers. This initial study will focus on the attempt each team makes to "partner" with their corporate customers. In other words, to what degree does each team implement sales activities that position the potential (customer/sponsor) as a partner in the relationship. Sutton et al. (2000) have suggested that partnering with corporate customers will strengthen the relationship--leading to higher rates of corporate customer retention. And when one considers the concept of customer lifetime value (LTV), determined by calculating the present value of the expected benefits from potential customers and sponsors in the future (Hughes, 1994), as well as the incredible costs of attaining new sponsors, retaining corporate customers should be of the utmost importance for any property involved in sponsorship. …