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Grow Your Top Line With a Digital Loyalty Program

Reward your loyal fans and create premium experiences

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  • The sports organization is having difficulties creating a loyalty program, as many leaders within the industry have identified that their previous loyalty programs have not been successful, having followed the same loyalty scheme as hotels and industries.
  • Increasing fan loyalty to the team has been difficult over the years; a traditional loyalty program will not satisfy the needs of a digital-first world and fans.
  • Engaging fans pre, post, and beyond the game and venue is a challenge for the business, when 360-degree fan experiences are not completely present.
  • You may lose your competitive position if you lack a loyalty program going forward.

Our Advice

Critical Insight

When emotional connections are developed through loyalty programs, physical or digital fan engagement is enabled. When 360-degree fan profiles are established, they empower premium experiences through hyper-personalized interactions, resulting in loyalty regardless of team performance.

Impact and Result

  • Leverage the sports entertainment digital loyalty program framework, architecture and analysis as a basis to work from to create a strategic and holistic digital loyalty program.
  • Determine the value a digital loyalty program will have on your business through the business reference architecture and value chain analysis.
  • Conduct a comparative analysis between existing sports and adjacent hospitality loyalty programs today.

Grow Your Top Line With a Digital Loyalty Program Research & Tools

1. Grow Your Top Line With a Digital Loyalty Program. This report will provide you with a digital loyalty program architecture and analysis to kick-start a strategic and holistic digital loyalty program.

Read our Digital Loyalty Program report to find out how you can grow your top line while generating 360-degree, hyper-personalized fan experiences.

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Grow Your Top Line With a Digital Loyalty Program

Reward loyal fans and create premium experiences.

EXECUTIVE BRIEF

Analyst Perspective

Leverage a digital loyalty program to enhance experience-led businesses

Sports entertainment companies are uncertain how to meet the ever-evolving needs and expectations of the digital and experiential economy that fans live in, where loyalty programs are often overlooked due to their unsuccessful and complicated track record within the industry.

The business of sports is not only about selling tickets, but it is an experience-led business. Therefore, to grow and maintain their fan base, sports organizations need to focus on the 360-degree experience for fans throughout the year, even during the off-season.

Rewarding fan loyalty through engagement, money-can't-buy rewards, and creative non-purchase related ways to get points are only some of the different ways sports entertainment organizations can emotionally reward their fans and turn them into loyal lifelong fans. However, it is important that sports entertainment organizations have mastered their traditional and transactional loyalty program before advancing into an emotional and digital loyalty program. A loyalty program does not completely lie in the hands of the IT department, but is a cross-collaborative project between IT and the marketing department.

The marketing department should have a marketing strategy that is flexible and scalable, and which requires technical resources, data, and marketing technologies to activate an emotional and digital loyalty program. Establishing an emotional connection with fans through loyalty will allow brands to prepare themselves for the ever-changing needs and expectations of the digital and experiential economy the business competes in.

Elizabeth Silva
Research Analyst, Sports Entertainment Industry
Info-Tech Research Group

The image contains a picture of Elizabeth Silva

Executive Summary

Your Challenge

Common Obstacles

Info-Tech’s Approach

  • The sports organization is having difficulties creating a loyalty program; many leaders within the industry have identified that their previous loyalty programs have not been successful, as they followed the same loyalty scheme as hotels and industries alike.
  • Increasing fan loyalty to the team has been difficult because a traditional loyalty program will not satisfy the needs of a digital-first world and fans.
  • Engaging fans pre, post, and beyond the game and venue is a challenge for the business, where 360-degree fan experiences are not completely present.
  • You may lose your competitive position if you lack a loyalty program going forward.
  • Organizations that do not focus on service culture and delivery or have no service recovery strategy may struggle, as service culture and delivery is an important part of the loyalty fans have toward a business.
  • Knowing the business and fans is important to understand how a loyalty program should be structured. Organizations that do not have a current database of useful information to determine who their fans are, and the ability to generate accurate reports and analytics, may find this difficult.
  • Meeting IT security and network requirements may be difficult for some organizations to ensure compliance standards are being met, protecting confidential data while being able to support a loyalty program.
  • Leverage the sports entertainment digital loyalty program architecture and analysis as a basis to work from to create a strategic and holistic digital loyalty program.
  • Determine the value a digital loyalty program will have on your business through the business reference architecture and value chain analysis.
  • Conduct a comparative analysis between existing sports and adjacent hospitality loyalty programs today.

Info-Tech Insight

When emotional connections are developed through loyalty programs, physical or digital fan engagement is enabled. When 360-degree fan profiles are established through loyalty, they empower premium experiences through hyper-personalized interactions, resulting in loyalty regardless of team performance.

Loyalty programs have accelerated

Traditional loyalty programs have come a long way, and more advanced technology is coming to enhance and improve fan journeys and loyalty.

The evolution of loyalty programs

The image contains a screenshot of the evolution of loyalty programs.

Movable Ink, n.d.

A digital loyalty program is an essential means in today’s digital & experiential economy

The typical loyalty program is focused solely on increasing market share and revenues through repeat purchase and usage.

Sports entertainment organizations must structure people, processes and technology to be more focused on the individual fan, prioritizing behavioral and attitudinal loyalty, cultivating engagement and profitability as a result. The creation of new fan behaviors and expectations due to the pandemic coupled with a siloed approach between marketing, operations, and IT makes it difficult to accomplish this fan-centric loyalty program.

Consequently, stakeholders are lacking the design-thinking mindset needed to recognize a clear and unified vision for the digital fan journey, and the loyalty program is lacking the level of sophistication needed to adapt to new technologies and opportunities for response.

Issue

Digital loyalty strategy

Increasing market competition and ubiquity of programs

>

Understand who your incumbents and disruptors are and define opportunities to either compete or differentiate.

Increasing sophistication of guest expectations and demands

>

Understand your fans and their journeys better to meet and exceed expectations.

Lack of customer-facing technological progress

>

Determine opportunities to enter the digital economy and improve customer-facing technology progress.

Siloed marketing, operations, and IT department strategies

>

Merge two levels of maturity by aligning strategic goals and building digital fluency.

Start with the core of your business to effectively transform your organization

Core

Identify the overlooked room for growth in your core business. Whether it is loyalty, events, or rights distribution, look for powerful ways to further deploy your existing capabilities and grow the core of the business.

Expansion

Expand the boundaries of your organization. Gain a robust view on the capabilities that differentiate your organization. Expand into adjacent capabilities where strengths can be built on, rather than diversifying into new capabilities.

Disruption

Disrupt and respond to change with new business models. As the traditional model for the sports industry is being disrupted, consider market insights to identify new opportunities. Look for ways to disrupt your own revenue model that utilizes some of your existing capabilities, and be clear about the new capabilities required.

Innovating physical sport through gamification and connected technology is a leading opportunity

As new entertainment products disrupt the market and battle for the same attention and share of wallet as sports entertainment organizations, it is time for the industry to rethink its strategies and how it will innovate to compete in the digital and experiential economy.

Over time, the sports industry has added to its business by providing more events, competitions, and increasing the media experience that is available but remain largely unchanged.

Sports entertainment organizations need to start thinking about how they will change to remain competitive, retain engagement, and capture a larger share of wallet compared to competitors.

71% Believe that the greatest opportunity in the sports space is to innovate physical sport through gamification/connected technology

PwC, 2021.

74% Believe that gamification/connected technology will attract younger participants in physical sports

PwC, 2021.

Opportunities:

  • Blend the physical and digital worlds together through gamification, attracting a younger fan base, allowing them to connect with each other on an interactive and multi-layered experience, where they can chat, meet, play, compare, learn, etc.
  • Collect valuable data from fans, by deepening fan engagement and loyalty from fans (with consent) in return for valuable rewards, and recognition from the brand.
  • Develop an interactive and engaging digital loyalty program by combining both opportunities together will transform not only the business and how it competes in the larger entertainment industry, but also the relationship with the most loyal fans.

Info-Tech Insight

Loyalty is the future driver of brand and revenue growth, where it should be engaging, predictable, and data is the currency.

A digital loyalty program can transform your relationship with fans

  • A loyalty program focuses on driving ongoing conversations and interactions to drive a deeper sense of loyalty; this is enabled by digital. Traditionally it has been viewed as only earning and burning through loyalty schemes.
  • Growth for loyalty programs in sport teams should be strictly based on relationship building rather than incentives traditional retail stores would create. Read more about this within the Digital Fan Engagement Report.
  • Reinforcing a range of fan engagement behaviors through a loyalty program, rather than simply providing points for transactional behaviors, will be more attractive for fans. It will also encourage positive and enduring fan engagement that supports in- and extra-role behaviors.
  • A loyalty program must incorporate community support and impression management behaviors, to encourage positive and strong fan engagement with all eight experience components. Loyalty programs are more than transactional behaviors.

The Experience Components that Drive Engagement

  1. Recognition & Support
  2. Personal Relevance
  3. Ease & Enjoyment
  4. Brand Alignment
  5. Data Usage & Trust
  6. Communications
  7. Digital
  8. Meets Needs

Download the Digital Fan Engagement Report

Experiential rewards provide long-term benefits

  • Research shows that monetary rewards are not the leading driver of loyalty programs and over time they drive a sense of entitlement. Rather, experiential rewards provide greater long-term benefits (MIT Sloan Review, 2018).
  • An outstanding fan experience is critical to the sustained growth of any business. It's important to consider what promotes better fan experiences to enable loyalty, retain fans, and encourage brand advocacy.
  • When partnered with the right tools and timing, building emotional relationships in a highly engaging manner builds stronger relationships, allowing businesses to deliver the most profitable types of relationships for the long term.
  • In the end, it is the fan journey that matters the most – not the destination. If the fan journey is a seamless and positive interaction with the brand, the better the fan experience will be allowing the loyalty program to be superior to competitors who do not focus on the fan journey.

The image contains a screenshot of a bar graph that demonstrates Customer experience in comparison of loyalty.

Transform your traditional loyalty program into digital

In essence, a digital loyalty program takes all the traditional aspects of making customers feel valued by a brand and uses innovative techniques and schemes to ensure every fan enjoys a truly personal experience with a brand.


Digital transformation of a loyalty program provides the organization opportunities to advance growth, enhance fan experiences, secure sustainability, drive operational efficiencies, and unearth potential future business ventures. It is important to determine if the organization's current loyalty program is largely traditional or digital.

Digital Definitions

  1. Digitization
  2. Changing from analog or physical to digital form.

  3. Digitalization
  4. Using digital technologies and information to transform Individual organizational operations.

  5. Digital Transformation
  6. A series of deep and coordinated culture, workforce, and technology shifts that enable new operating models and transform an organization’s operations, strategic directions, and value proposition.

Transform your traditional loyalty program into digital

TRADITIONAL

DIGITAL

Design

  • Largely transactional currencies with standard and uniform reward schemes
  • Relationship-driven with personalized reward scheme stemming from fan interactions in digital touchpoints

Transaction method

  • Physical loyalty cards
  • Mobile application

Delivery method

  • Print, mail, email pre- and post-game
  • Push-notifications, text message pre-, during, and post-game

Objective

  • Encourage repeat purchase
  • Behavioral loyalty: Timely, tailored content, trusted, convenient and available across all channels
  • Attitudinal loyalty: Brand proposition, overall experience

Type of rewards

  • Tangible rewards
  • Tangible, experiential, and hyper-personalized rewards

Technology and analytics usage

  • Minimal
  • Extensive

Result

  • Creates silos as opposed to taking flexible, collaborate approaches
  • Creates a connected history that informs the brand of the next best engagement opportunity

To enable the digital economy, IT must have business alignment

Being able to properly enable the digital economy through a digital loyalty program is important, as this will require major technology investments.

This can only be done when there is business alignment, meaning high satisfaction between the IT department and the business.

Today, our CIO Business Vision benchmarking report shows that most sports, entertainment, arts, and culture organizations are in the 70-80% satisfaction mark, making them a trusted operator. However, being in this ranking area makes it more difficult to enable the digital economy and move up the loyalty ladder.

The image contains a screenshot of Info-Tech's Maturity Ladder.

Info-Tech Insight

By leveraging the digital business strategy to enable new digital capabilities, such as a digital loyalty program, your organization will have the opportunity to demonstrate the value of IT and the satisfaction that can be provided.

Business alignment will enable progression up the loyalty ladder

To move up the loyalty ladder, sports entertainment organizations must increase their business satisfaction to align their business in order to receive capital for investments.

Relationships are the number one driver for business satisfaction for any IT department. To improve your relationships with others in the business, collaborate with other departments to develop holistic strategies, and deliver meaningful results for the internal and external stakeholders.

Most organizations are either “fan fixers” or “cross-channel enablers” in terms of loyalty program enablement. This was discovered through Info-Tech surveys and discussions with sports entertainment leaders.

Become a ‘fan-centric champion’ or ‘fan wow’ organization by improving relationships and business alignment. This will move your organization up the loyalty ladder.

77% of loyalty programs with a solely transactional model fail within the first two years.

71% of companies with an existing loyalty program plan to revamp the scheme in the next three years.

Movable Ink, n.d.

THE LOYALTY LADDER

FAN WOW

Aim to delight through mind blowing, unexpectedly satisfying experiences that serve as the ultimate brand expressions.

FAN-CENTRIC CHAMPIONS

Focus on fan personalization, using data to individualize experiences.

CROSS-CHANNEL ENABLERS

Focus on unifying CX across channels with an omni-channel approach to better manage end-to-end fan communications and experiences. This is especially true for retailers whose fans cross channels to shop.

FAN FIXERS

Companies intent on removing friction, thereby focusing on fixing operations processes and pain points.

Evaluate the loyalty program across transactional and emotional characteristics

In today's experiential economy, it is important for a loyalty program to focus on emotional drivers and tactics rather than transactional and influential tactics. However, to have an effective emotional loyalty program, you need to have a good transactional loyalty program as a basis to work from.

Emotional influence tactics

  • Special recognition status and exclusivity surprise and delight community

Transactional influence tactics

  • Product enhancements
  • Experience design
  • Value-added services
  • Offers and discounts

Transactional attributes

  • Perceived value
  • Ease of value exchange
  • Perceived opportunity cost
  • Pain avoidance

Emotional attributes

  • Personal values alignment
  • Self-image building
  • Social connectivity
  • Aspiration and life goals

Info-Tech Insight

Having an emotional rather than transactional digital loyalty program will allow you to view this initiative as a revenue driver rather than a cost center.

Movable Ink, n.d.

Consider the loyalty scheme possibilities

There are many different loyalty program schemes that any sports entertainment organization can take on to improve fan relationships.

Earn and burn loyalty programs

Traditional approach to loyalty; fans earn points for the money they spend.

Tiered loyalty programs

Fans gain access to additional benefits by advancing through ranks.

Perks loyalty programs

Based on perks, awards, and benefits for all members unconditionally.

Gamified loyalty programs

Challenges or badges engage fans in a fun and interactive way.

Loyalty community programs

Dividing the fan base into smaller segments based on specific topics, interests, or values.

Lifestyle loyalty programs

Encourage valuable behavior and brand love by rewarding fans for being active or green.

Influencer / referral loyalty programs

Attract new fans through identified brand advocates.

Paid loyalty programs

Fans pay a recurring fee to receive great benefits they can use instantly.

Hybrid loyalty programs

Merge two or more types of loyalty schemes together to fit your digital business strategy.

Coalition loyalty programs

Unite multiple brands within the same venue to increase foot traffic and revenues.

Antavo, 2022

Loyalty programs for sports leagues should correspond to the existing fan relationships

Sports leagues may want to consider paid loyalty programs, where members pay a recurring fee to receive great benefits they can use right away. This is an attractive way to acquire both new fans and establish a stronger relationship with current fans by giving them access to exclusive content and VIP benefits. Sports leagues should focus on providing exclusive content and benefits that fans cannot find anywhere else in return for a fee; this is solely a transactional relationship.

The exception is leagues who do govern individual players rather than teams (e.g. NASCAR), where a tiered loyalty program may be more suitable than a paid loyalty program.

Note that sports teams may already have a paid loyalty scheme within their organization, providing exclusive benefits and experiences to season ticket holders. Thus, it is important that sports teams do not focus on paid and transactional loyalty programs, but rather emotional loyalty programs to further enhance existing experiences.

The image contains a screenshot of the Paid Loyalty Program Scheme.

Antavo, 2022

Info-Tech Insight

Sports leagues and teams should structure their loyalty programs differently, despite marketing to the same audience, as the relationship between the fans, leagues, and teams are different. Having a loyalty scheme that correctly corresponds to the relationship is key to loyalty program success.

Loyalty programs for sports teams should strengthen emotional relationships

Sports teams may want to consider loyalty community programs with tiered and gamified components. Loyalty community programs are smaller segments within the loyalty program to created targeted and further engaged fans based on specific topics, interests, values, and fan tiers to strengthen emotional relationships with fans.

Loyalty community program with tiers and gamification scheme (hybrid)

The image contains a screenshot of diagrams of sports teams loyalty programs.

Antavo, 2022

Loyalty program expectations are rising

86% of consumers with high emotional engagement say they always think of the brands they are loyal to when they need something.

70% of emotionally engaged consumers spend up to two times more on brands they are loyal to.

Gamification and badging

Loyalty programs are designed to drive high value actions, which are badged when completed, in exchange for points multipliers.

Multi-brand loyalty programs

An ecosystem of brands under one loyalty program, creating fan rewards and incentives across banners and verticals. Drives share of wallet for the parent company and captures a wealth of fan data. This is a high-value opportunity for sports entertainment organizations that also own the venue.

Exclusive services and access

Providing value-add services and special access to sales and products make the fan experience more valuable and convenient, ultimately driving loyalty with the brand.

Values and community building

Embedding mission and peer-to-peer connections will increase in importance and relevance as consumers become more socially and environmentally motivated.

Movable Ink, n.d.

Overarching business risks and considerations

Service culture and delivery

  • Loyalty is driven by far more than loyalty schemes and rewards. Fans that come to your venue and support your team will expect a highly satisfactory experience overall. The operational decisions that your organization makes in relation to fan experience and service delivery will also determine the success in luring fans to enroll in your loyalty program. Consider the following experiential elements that may affect your fans' behavior:
    • Suite quality
    • VIP services
    • Overall service and experience
    • Amenities
    • In-venue food and beverage options

Know your business

  • Bear in mind the classification your organization falls under. Every organization is different; with varying initiatives, priorities, fan demographics, and funding challenges.
    • For leagues - international/national versus regional focus
    • For teams - regional focus with different tier fans:
      • Fanatics
      • Club loyalists
      • Icon imitators
      • 'Fear of missing out' followers
      • Main eventers
      • Tag-alongs

Loyalty liability

  • Traditional loyalty programs include points-based schemes, where fans earn points in return for actions.
    Giving points to fans creates tax obligations and financial liability implications an organization must think about. This means organizations must calculate the amount of points that fans received – used or unused – in one year to indicate the cash value for financials and tax reporting.
  • There are also operational complexities in terms of points expiration and rules to manage the program, to ensure the loyalty program isn’t perceived as a cost center but a revenue driver.
    • Some solutions are: set no expiration date for points, or convert unused points into other means of value such as coupons at the end of the year.

Download the Digital Fan Engagement Report to read more about fan personas

Overarching IT risks and considerations

The viability for a digital loyalty strategy is highly dependent on the maturity of the IT department. Rule of thumb is to measure and assess your IT maturity because what may seem like a simple project could be more complex. Your organization must understand the possible uncertainties and have substantial processes in place to stand resilient from potential risks.

IT security and network

Data and analytics

  • IT security – Satisfaction that organizational devices and data are properly secured.
  • Network and infrastructure – Satisfaction with reliability of communication systems and networks.
  • Privacy and compliance – Consider what a digital loyalty program means for Identity & Access management, as well as customer records and privacy, especially when it comes to Data Protection & Privacy Compliance laws (GDPR, PIPEDA, CPPA, DPA, PCI).
  • Analytical capability – Satisfaction with effective standard reports, custom reports capability, and the ability to generate business insights.
  • Data quality – Put policies, processes, and capabilities in place to ensure that appropriate targets for data quality are set and achieved to match the needs of the business.
  • Data governance - Consider data governance and how your organization will classify data and leverage BI tools.

Info-Tech Insight

A digital loyalty strategy will require superior IT security and network services and will therefore increase the importance of IT Security and Network. Depending on IT’s maturity, this could positively or negatively affect the business stakeholder and fan satisfaction.

Info-Tech Insight

Business stakeholders must understand the value of data and analytics in making the right decisions. Satisfaction must be improved as personalization and fan identification will require the need of automation and real-time data and analytics to maximize the fan experience.

The ideal DNA of a digital loyalty program consists of alignment across three components

1

A deep understanding of fan needs and expectations

The sports entertainment industry is dealing with the changing needs and expectations of fans. Organizations should be concerned about what is happening in the external environment directly influences what changes should be made in a loyalty program.

2

A connected approach to marketing and fan experience technology

Organizations can develop a successful loyalty program by understanding the changing nature of the relationship between fans and brands through technology. In any interaction, communication, or engagement through technology, fans' interpretations are changed by that technology. This technology influence can be a risk, as fragmented organizational strategies will lead to incongruent approaches to address fan needs.

3

An increasing/shifting budget to support fan demand for digitized experiences

Allocation of budget must be shifted to support digital in the marketing department, determining technology gaps. This redirection should aim to improve business resiliency through automation and fan experience.

Info-Tech stands by the allocation and prioritization of budget toward initiatives that enable the following overarching systems:

Digital Ecosystem – Building for Expansion:

  • Refers to the environment that the business must compete in.
  • Laying the foundation for upcoming high-value implementations is key.
  • To do this, your environment must allow for the connectivity of systems and processes so that your organization can take advantage of future projects.

Experience Platform – Building for an Optimal Experience:

  • Refers to a system that sits on data to manage both operational and fan experience, with the ultimate objective of driving engagement for fans and the right decision for organizations.

By enticing fans with specific technology or trends, you’re enhancing the fan experience while driving present and future sales.

Venue infrastructure plays a critical role in enabling a digital loyalty program

Beyond a stable internet connection, each of these technologies work as a foundational technology to support IT departments in successfully implementing and activating a digital loyalty program within the venue.

Data and integration

Data is one of the most important assets in a modern organization. Every organization has data which might serve the needs of the business today. However, changes in fan behaviors, profiles, and more occur at a rapid rate. If your data is isolated, it will quickly become stale. Getting up-to-date data to the right place at the right time is where datacentric integration comes in as crucial component of success.

Artificial intelligence (AI) & machine learning (ML)

AI & ML or artificial intelligence and machine learning is the ability for machines to simulate intelligent human behavior. Dependent on both algorithms and data, it can interpret information to identify patterns. One way the sports entertainment industry will use this technology is by making personalized recommendations for food and beverages, merchandise, etc.

Internet of things (IoT)

The internet of things is a constellation of connected devices with embedded sensors providing real-time information to an application layer. IoT describes the enhanced connectivity we now experience with everyday devices and appliances that would not typically boast such capabilities. From personalized fan experiences to a reduced carbon footprint, there are many reasons why sports venues can use IoT to enhance their loyalty program.

Big data

Big data is rapidly increasing amounts of data, generated by multiple sources, in many formats. To make actionable insights, analysis of the data is necessary. Sports entertainment venues can capitalize on the information about fans to drive business decision and, make the fan experience memorable and hyper-personalized, while improving the working conditions for associates. Both IoT and AI depend on big data to function at optimal levels.

Understand the different components necessary to develop a fan-centric, unified, and agile enterprise loyalty program architecture

The image contains a screenshot of the loyalty program architecture.

Data and integration play an important role in digital loyalty programs

Ensuring that the data the organization collects is accurate, maintained, useable, and integrated into the appropriate systems will help eliminate duplicate data and make it easier for the organization to make decisions, understand fan behaviors, and properly enable a digital loyalty program.

Having an accurate data and integration strategy is vital to the success of a digital loyalty program; otherwise, the program may not meet fan expectations and result in ineffective initiatives.

Systems that should be integrated with an organizations loyalty program are the CRM, CDP, POS, and any other system that collects data on fans.

Download Info-Tech’s Develop a Master Data Management Strategy blueprint

Download the Off-Field Data Reference Architecture blueprint

The benefits of loyalty programs

Fan benefits

Business benefits

IT benefits

  • The business will be able to meet and exceed expectations of various sports entertainment fan segments through digital transformation.
  • Ability to create high value and enhanced long-term fan journeys that will result in entertained, engaged, and loyal fans.
  • Increased revenue and retention through high-value loyalty program experiences and engagement.
  • Brand differentiation through data collection and insight generation that will personalize marketing messages and offerings.
  • The opportunity to automate internal processes to increase efficiency and productivity.
  • Improved reputation by enabling transactional, behavioral and attitudinal loyalty.
  • A digital loyalty strategy ensures that IT is seen as a valuable partner in the eyes of the business.
  • Your organization will likely invest in new or updated software and hardware for a successful and low latency digital loyalty strategy.
  • IT’s role in the organization will become more innovative in this increasingly digital environment.

Section 1

Value chain to value creation analysis for a digital loyalty program

Section 1

Section 2

  • Value chain analysis
  • Fan personas and journey scenarios
  • Journey mapping
  • KPIs
  • Case studies
  • Comparative analysis

Analyzing the value of sports entertainment capabilities

Sports Entertainment Business Capability Map

In business architecture, the primary view of an organization is known as a business capability map, which is made up of business capabilities and value chains.

A business capability defines what a business does to enable value creation, rather than how.

A value chain is a high-level analysis of how the industry creates value for the consumer as an overall end-to-end process.

A business capability map provides details that help the business architecture practitioner direct attention to a specific area of the business for further assessment.

The highlighted value chains are capabilities and processes that are impacted by a digital loyalty program.

The image contains a screenshot of the Sports Entertainment Business Capability Map.

Value chain analysis for digital loyalty programs

Digital loyalty programs impact many business capabilities and value chains within sports entertainment, but the most critical value chain that is impacted by this initiative is the fan success management value chain. Digital loyalty programs can improve most of the capabilities within these value chains, highly impacting the fan lifetime value and loyalty management. These processes are challenging to successfully create but can have a high financial impact on the business.

The image contains a screenshot of the value chain analysis.

Greatest risks

Complexity

Key benefits

dependencies

Financial revenue highly impacted

  • Low adoption rates of the loyalty program from fans.
  • Lack of return on fan engagement.
  • Lack of return on investment.
  • Existing loyalty program or initiatives need to be adapted or replaced to become digital.
  • IT security and network must be strong enough to support a digital loyalty program while protecting information.
  • Data quality and analytics need to meet the needs of the business in order to execute a data-driven loyalty program.
  • Value and community building.
  • Meet and exceed fan expectations and services through digital transformation.
  • Create 360-degree fan experiences that will result in entertained, engaged, and loyal fans.
  • An aligned data strategy is critical to help drive out a loyalty program to measure the right items at the right time.
  • The fan data you collect will only be valuable to the business if you stay ahead of mining the insights in real time and translating it into actionable efforts.
  • Save costs through:
    • Automating and streamlining processes
    • Reducing fan churn
  • Revenue increase in:
    • Purchase frequency and upselling
    • Improved fan retention
    • Improved fan lifetime value

From value chain to journey scenario for value creation

Journey scenario: As a fan, I need to identify new channels, so I can have full coverage and stay engaged with my team.

Fan demographics

Name: Norman Hills

Fan segment: Fanatic

Age: 22

Occupation: Marketing intern

Location: Dallas, Texas

Pains

What are their frustrations, fears, and anxieties?

  • Not able to experience an in-person game due to cost.
  • Fears that the sense of community is broken or lost, as he cannot physically be there for a game.
  • Fears he will lose interest in the game he has enjoyed since childhood.

What do they need to do?

What do they want to get done? How will they know they are successful?

  • Follow the sport in its entirety with strong emotional engagement.
  • A sense of community.
  • Attached to their team but also engaged in other leagues.

Gains

What are their wants, needs, hopes, and dreams?

  • Wants interactive content while at home.
  • Hopes for a sense of community no matter where he is.
  • Wants full coverage on the sport and not just the specific team.

Identify digital opportunities for digital loyalty programs through fan journeys

Stakeholder: Norman - fanatic

Journey scenario: As a fan, I need to identify new channels, so I can have full coverage and stay engaged with my team.

Journey activity

Decide Watch in Living Room Experience and Engagement Retain

Touchpoints

  • Decide whether to buy a ticket to live game or watch at home
  • Go to living room
  • Turn on TV
  • Watch the game on live stream
  • Watch the game from home
  • Team scores a point
  • Game ends
  • Experience and engagement has ended with the team

Nature of activity

Non-routine cognitive

Non-routine cognitive

Non-routine cognitive

Non-routine cognitive

Metrics

  • Time to decide
  • Fan satisfaction
  • Fan engagement rate
  • Fan satisfaction
  • Fan engagement rate
  • Fan lifetime value
  • Fan churn rate
  • Fan engagement rate

Key moments and pain points

  • Cannot afford ticket
  • Does not have sense of community
  • Not as interested or engaged in the game from home
  • Feels left out
  • Not there to experience the moment in action
  • Moment of action is not as exciting with no one else to celebrate with
  • Experience ends abruptly when no on-going engagement is present
  • The feeling of no community continues, where Norman has no future desire to watch the next game

Opportunities

Provide more engagement opportunities to the fan at home at no extra cost

Bring the community to the fan no matter where they are, through technology

Forums and chat rooms within a loyalty program to provide a sense of community

On-going communication, forums, contests, etc. from a loyalty program

Measure the success of a digital loyalty program

Outcomes

Metrics

Impacts

Measures

Superior share of wallet

Share of wallet (SOW)

Improved share of wallet, year over year.

  • The average amount a fan spends on one company rather than the competing brands in the same product category.
  • SOW = total money spent at one company / total money spent in the category.

Effective fan service

Net promoter score (NPS)

With an effective loyalty program, effective fan service should follow, improving the quality of the experience and thus NPS.

  • Net promoter score allows organizations to calculate the difference between fans who love and are satisfied with the organization and those who aren’t.
  • NPS = % of promoters – % of detractors

Strong fan loyalty

Customer loyalty index (CLI)

Strengthen fan loyalty.

  • Standardized metric like NPS, which is derived from surveys and measures the strength of loyalty.

Increased engagement

Return on engagement

Engagement shall increase with an effective loyalty program.

  • Return on engagement = (benefits – costs / costs) X 100
  • Annual fan survey

Increased repurchase levels

Monthly recurring revenue, ROI

Revenue should increase year by year with increased engagement levels.

  • Monthly recurring revenue = new fan subscription revenue + existing fan subscription revenue + add-on and license upgrade fees – lost revenue from churned fan accounts and license downgrades or removed add-ons
  • ROI = net return on investment / cost of investment X 100

Superior fan relationship

Average fan value, average fan lifetime value, churn rate

Relationships with fans should positively increase as a loyalty program connects fans and brands, while collecting data to hyper-personalize experiences.

  • Average fan value = average purchase X average purchases in one year
  • Average fan lifetime value = average fan value X average fan lifetime
  • Churn rate = (fans beginning of month – fans end of month) / fans beginning of month
Qualtrics, n.d.

Section 2

Digital loyalty program comparative analysis

Section 1

Section 2

  • Value chain analysis
  • Fan personas and journey scenarios
  • Journey mapping
  • KPIs
  • Case studies
  • Comparative analysis

Formula 1 and Oracle CrowdTwist case study

Loyalty engagement program

INDUSTRY: Sports Entertainment

SOURCE: Oracle, 2021 & Red Bull Racing, n.d.

Challenge

  • Formula 1 wanted to engage with fans in a non-traditional way; creating engaging experiences that led their business was their goal.
  • Sports organizations must consider how to engage, retain, and grow their fan base throughout the year—even during the off-season, which is exactly what Formula 1 was looking to do.

Results

  • Formula 1 and Oracle Red Bull Racing created The Paddock, a fan loyalty program powered by Oracle CrowdTwist Loyalty and Engagement. This loyalty program rewards fans for their physical and digital interactions in return for “money-can't-buy” rewards.
  • The main purpose of this loyalty program was to engage and rewards fans with exclusive money-can’t buy experiences, such as limited-edition prizes and meeting the team.
  • The Paddock loyalty program currently has fans joining from 172 countries, with an increase in full memberships of 397% the first week and 620% the first month.

Boston Red Sox’s rewards case study

Red Sox’s Rewards Program

INDUSTRY: Sports Entertainment

SOURCE: Sponsorship.com, 2017, Loyalty & Reward Co, 2021.

Challenge

  • In 2011, the Red Sox experienced a difficult season which resulted in a decline in fan satisfaction, interest, and an increase in no-show rates.
  • This highlighted the importance of giving fans more than just a seat in the venue. The Red Sox decided to pilot their rewards program with 500 season ticket holders to improve satisfaction and revenues.
  • The team uses the program to achieve three primary goals:
    • Give value back to fans
    • Drive engagement
    • Increase renewal rates in season ticket holders

Results

  • The Red Sox decided to give their rewards program three advantages over traditional retailers in driving customer loyalty: the opportunity to engage with key points of the game, more exclusive rewards (intangible experiences, etc.), and multiple platforms for fan engagement.
  • Prizes consist of many money-can’t buy and once in a lifetime experiences, ranging from jerseys, autographed memorabilia, to the opportunity to throw out the first pitch, or have a private dinner with one of the players.
    Members can redeem points in three ways:
    • The Red Sox Rewards marketplace (team merchandise, etc.)
    • Contests
    • Auctions and raffles (money can’t buy experiences, etc.).
  • After the program was launched, 66% of season ticket holders modified their behavior to earn points.
  • Since the launch of the program, the Red Sox had updated the program with an RFID card and have added a mobile component through the MLB Ballpark app.

Montreal Canadiens Club case study

Club 1909 Loyalty Program

INDUSTRY: Sports Entertainment

SOURCE: Sportsnet, 2014.

Challenge

  • The Montreal Canadiens wanted to further engage and grow relationships with their current fan base rather than grow the fan base, as one of the oldest standing hockey teams in the NHL.
  • The goal of their loyalty program is to give a sense of belonging to long-standing fans, going beyond tangible rewards.

Results

  • The Canadiens launched their loyalty program called Club 1909 in 2014 (it's still successfully running today). Fans can register for free or pay a one-time fee of $29.99CAD to become a premium member and get double points for most behaviors. Premium members receive a membership card that includes exclusive gifts.
  • Members are given a digital card they can use to track their points. The points can be redeemed for merchandise, or other items that are not normally on sale such as game-used pucks, or experiences like watching a game from behind the team’s bench.
  • The Club 1909 Loyalty Program is almost 10 years old, and still manages to engage fans while generating an ROI for the business.

When comparing sports to adjacent hospitality loyalty programs the similarities are evident

For organizations in similar industries where products, experiences, and price points are very similar across competitors, your customer loyalty program can become a differentiator and competitive advantage.

Sports entertainment and hospitality organizations are both experience-led businesses that cater to the guest or fan. These organizations give customers a reason to book or engage exclusively with the brand by offering value in addition to the experience, products, and service.

To survive, grow, or transform in today's digital era, organizations must first have a strong pulse on their business ecosystem. Learning what competitors are doing to grow their bottom line and differentiate themselves is key to identifying how to grow an organization. Understanding who the key incumbents and disruptors are in the market will allow the organization to better understand where the market is heading.

The following slides are a loyalty program comparative analysis between sports and hotel organizations. This will allow an organization to begin an ecosystem scan to determine where the market is heading, and how other organizations that are fighting for the same share of wallet are trying to remain competitive and differentiate themselves from others.

Use this comparative analysis to become aware of the current loyalty program landscape, and how your organization currently fits.

Sports entertainment comparative loyalty program analysis

Loyalty Program

Program type and tiers

Partnerships

Earn

Burn

Point expiration policy

Multi-property/

event program

Mobile app features

Intangible value creation enablement

Formula 1 and Oracle CrowdTwist

Tiered Earn & Burn Loyalty Program

  • Oracle Red Bull Racing Driver (0-7499 points)
  • Race Winner (7500-14999 points)
  • World Champion (15000-24999 points)
  • Oracle Red Bull Racing VIP (25000+ points)

Food & Beverage

Experiences

Completing Surveys & Trivia

Social Media

Read, Watch, Or Listen To Content

Experiences

Shopping & Retail

Offers

1 year
  • Tiers do not expire
  • Personal profile
  • Digital downloads
  • Exclusive content
  • Social channels
  • Invite friends
  • Garage configuration
  • Surveys
  • Bull's guides

Not offered

Boston Red Sox’s Rewards

Tiered Earn & Burn Loyalty Program

  • Royal Rooters (250 points)
  • Premium (500 points)
  • Suite Holder (1000 points)
  • Members receive points in the beginning based on status as a season ticket holder.
Cash

Experiences

Completing Surveys & Trivia

Read, Watch, Or Listen To Content

Food & Beverage

Shopping & Retail

Experiences

Cash

Offers

75% expire
  • Digital wallet to use at Fenway Park
  • Marketplace
  • Auctions
  • Achievements and rewards
  • Trivia
  • Polls
  • Personal profile

Not offered

Montreal Canadiens Club 1909

Earn and Burn Loyalty Program

  • Not applicable to this program

Shopping & Retail

Experiences

Completing Surveys & Trivia

Read, Watch, Or Listen To Content

Food & Beverage

Shopping & Retail

Experiences

Shopping & Retail

Offers

Food & Beverage

No expiration unless account is inactive for more than one year.

  • Digital wallet
  • Digital downloads
  • Quizzes
  • Contests
  • Auctions
  • Unique and exclusive experiences
  • Games
  • Surveys

Not offered

Oracle Red Bull Racing, n.d; MLB, 2022; club1909, n.d.

Hotel comparative loyalty program analysis

Loyalty program

Tiers

Partnerships

Earn

Burn

Point expiration policy

Multi-property program

Mobile app features

Intangible value creation enablement

Marriott Bonvoy

Tiered Earn and Burn Loyalty Program

  • Marriott Bonvoy Member (0-9 nights)
  • Silver Elite (10 nights)
  • Gold Elite (25 nights)
  • Platinum Elite (50 nights)
  • Titanium Elite (75 nights)
  • Ambassador Elite (100 nights + $20,000 USD in annual spend)

Food & Beverage

Credit Cards

Car Services

Cruise

Food & Beverage

Credit Cards

Car Services

Cruise

Hotel Stays

Car Services

Hotel Stays

Gift Cards & Catalog

Cash

Point Transfers

Airline

2 years
  • Mobile check-in
  • Mobile key
  • Manage Loyalty Program Account
  • Mobile chat
  • Direct booking
  • Mobile requests
  • Mobile dining
  • Live maps

NFT creation

Hilton Honors

Tiered Earn and Burn Loyalty Program

  • Hilton Honors Member (0-7 nights)
  • Silver (7 nights)
  • Gold (28 nights)
  • Diamond (42 nights)

Food & Beverage

Credit Cards

Car Services

Food & Beverage

Credit Cards

Car Services

Hotel Stays

Offers

Food & Beverage

Car Services

Hotel Stays

Experiences

Shopping & Retail

Airline

1 year
  • Mobile check-in
  • Digital key
  • Direct booking

Not Offered

IHG Rewards

Tiered Earn and Burn Loyalty Program

  • Club (0-7)
  • Gold Elite (7 nights, 7,000 points)
  • Platinum Elite (30 nights, 30,000 points)
  • Spire Elite (55 nights, 55,000 points)

Food & Beverage

Credit Cards

Car Services

Car Services

Credit Cards

Hotel Stays

Offers

Airline

Food & Beverage

Car Services

Experiences

Hotel Stays

Shopping & Retail

1 year

• Direct booking

• Manage Your Stay

• Access member-only rates

• Check account status

• Redeem

• Enjoy offers

Digital check-in and checkout

Not Offered

Incorporate the digital loyalty program initiative into the digital business strategy

By incorporating digital loyalty into the overall digital business strategy, using Info-Tech’s methodology the organization will discover the value-driven approaches to digital transformation that allows the business to identify what aspects of the business to transform, what technologies to embrace, what processes to automate, and what new business models to create. This approach to digital transformation unifies digital possibilities with fan experiences.

Impact and results:

  • Design a strategy that applies innovation to the business model, streamlines and transforms processes, and makes use of technologies to enhance interactions with customers and employees.
  • Use digital for transforming non-routine cognitive activities and for de-risking key elements of the value chain.
  • Create a balanced roadmap that improves digital maturity and prepares you for long-term success in a digital economy.

Download Define Your Digital Business Strategy

Info-Tech Insight

Taking the perspective of an end user who interacts with your products and services, as it is different from the view of those inside your organization, is one of the most critical steps of a holistic business plan and strategy.

Validate the organization’s position on the digital experience roadmap

Follow the digital experience roadmap for a successful business transformation. If you find that the organization has skipped some steps of the roadmap, consider stepping back to ensure the business is properly aligned and prepared for digital transformation.

1

Sports League or Entertainment Business Reference Architecture

2

CIO Business Vision Diagnostic

3

IT Staffing Diagnostic

4

Business Aligned IT Strategy

5

Discover High-Value Fan Experiences

Industry Trends Report

6

Digital Business Strategy

7

Accelerate Through Digital Fan Engagement Report

8

Off-Field Data Reference Architecture

9

Frictionless Checkout

- Digital Transformation Technology Report

10

Enable Dynamic Visual Experiences and Drive Business Sustainability with Digital Signage & IPTV

11

Grow Your Top Line With A Digital Loyalty Program

You are here

Research Contributors and Experts

Fowler, Ty

Director of Loyalty

Kansas City Chiefs

Nikonorc, Sergio

Director of Sales & Partnerships

Kangaroo Rewards

Singh, Rohit

Consultant

NextBee - Community Platform

Swiatkowski, Hubert

Global Partnerships Manager

Open Loyalty

Bibliography

Bond Loyalty. “The Loyalty Report 2020” Bond Loyalty, 2020. Accessed 8 August 2022.
Canadian Press. “Habs launch loyalty program for fans” Sports Net, 16 Oct 2014. Accessed 29 August 2022.
Elrawi, Amr. “Customer loyalty in sports: Turning your customers into lifelong loyal fans” Oracle, 9 Dec 2021. Accessed 8 August 2022.
Huang et al. “Why Customer Experience Is Key for Loyalty Programs.” MIT Sloan Review, 2 July 2018. Accessed 1 Sept 2022.
MacDonald, Steven. “HOW A CUSTOMER EXPERIENCE STRATEGY HELPS SCALE REVENUE GROWTH (AND ACHIEVE PROFITABILITY)” SuperOffice, 16 August 2022. Accessed 1 Sept 2022.
MLB. “Red Sox Rewards” MLB, n.d. Accessed 29 August 2022.
Montreal Canadiens. “Club 1909” Montreal Canadiens, n.d. Accessed 29 August 2022.
Morgan, Blake. “50 Stats That Show The Importance Of Good Loyalty Programs, Even During A Crisis” Forbes, 7 May 2020. Accessed 21 July 2022.
Movable Ink. “Emotion is the Notion: How Emotional Loyalty Drives Business Results with Movable Ink and Oracle CrowdTwist.” Movable Ink, n.d. Accessed 10 August, 2022.
Murray, Hunter. “BOSTON RED SOX: THE HUGE LOYALTY OPPORTUNITY IN SPORTS” Loyalty & Reward Co, 22 August 2021. Accessed 4 Nov 2021.
Oszi, Tamas. “Customer Loyalty Programs: A Definitive Guide With 13 Actionable Steps (2022)” Antavo, 30 June 2022. Accessed 12 August 2022.
PwC. “Sports industry: ready for recovery?” PwC, 2021. Accessed 8 August 2022.
Qualtrics. “The ultimate guide to customer loyalty” Qualtrics, n.d. Accessed 8 August 2022. Red Bull Racing. “The Oracle Red Bull Racing Paddock” Red Bull Racing, n.d. Accessed 29 August 2022.
Sponsorship. “The Ins and Outs Of Team Loyalty Programs” Sponsorship, 2017. Accessed 4 Nov 2021.

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Author

Elizabeth Silva

Contributors

  • Hubert Swiatkowski, Global Partnerships Manager, Open Loyalty
  • Rohit Singh, Consultant, NextBee
  • Sergio Nikonorc, Director of Sales & Partnerships, Kangaroo Rewards
  • Ty Fowler, Director of Loyalty, Kansas City Chiefs
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