MT243 Unit 10 Renewal Case Example

Seventy-Nine Percent of Target at $199 a Member: A Unit 10 Renewal Case for a Credit Union's Marathon Partnership

[Student Name]

Purdue University Global

MT243: Sport Sponsorships and Sales

Unit 10 Renewal Case

[Instructor Name]

[Date]

The Harbor Point Marathon Weekend, Meridian Lakes Credit Union and every result, cost and term are composite and illustrative; the sources cited are real.

Prepared for the credit union's marketing and finance chiefs by the marathon weekend's partnership office

Results Against the Scorecard

The partnership produced 1,420 attributed new members in its first year, 79 percent of the 1,800 target we agreed. We missed the target, and this case begins there because the rest of the results should be read in that light.

Every figure below is measured against the scorecard both sides signed in June, using the counting rules agreed then: only new households, one code each, and only accounts opened in the sixty days after the race. Those rules held for the whole year, and neither side asked to change them once results began to arrive, which is the reason the figures can be compared with the target at all.

Delivery

The marathon weekend met every delivery obligation but one. Bibs, arches, the event title, both dedicated emails, all eight group runs, the expo booth and the cheer zone were delivered as promised. Livestream logo time came to 870 seconds against the 1,000 promised, because a camera failure at the finish cut the recovery zone shot for part of the broadcast. Under the agreement, that shortfall earned a make-good, and we sent an additional dedicated email to the 39,000 runners in November.

Outcomes

Attributed new members: 1,420, against a target of 1,800.

Cost per attributed member: the rights fee of $165,000 plus activation of $118,000, a total of $283,000, divided by 1,420 members, gives about $199.30 per member. You shared in confidence that a member won through your digital advertising costs about $240. The partnership acquired members at about 17 percent less.

Awareness: in the four new branch areas, awareness of Meridian Lakes in your quarterly survey rose 9 points between July and November. In the rest of the metro, it rose 3 points over the same period. The 6-point difference is the best estimate of the event's effect, though the survey samples are small. Olson (2010) found that awareness gains from sponsorship are strongest when the sponsor and event fit well and the audience is engaged with the event, which is consistent with the gain being concentrated near the branches that hosted runs.

Employee engagement: 164 employees volunteered at the cheer zone, the expo and aid stations, against 120 planned.

Which Tactics Worked

The event codes show which tactics produced members.

Expo station: 610 members

Post-race follow-up email: 470 members

Branch group runs: 190 members

Finisher photo page: 150 members

The expo station and the follow-up email together produced three in four attributed members. The branch runs produced fewer members than hoped but drew 1,160 runner visits to the four branches, which may help awareness in ways the codes do not capture. The finisher photo page produced the fewest members for its cost: at $19,000, it cost about $127 per member, but most runners downloaded photos without looking at the offer.

Two tactics did most of the work, and one cost more than it returned.

Why the Target Was Missed

The target was set without history, and it assumed every tactic would perform about equally. The expo station was open only during expo hours, and lines were long on Saturday afternoon, so some runners left before opening an account. The photo page drew attention to the photos rather than the offer. And summer heat cut attendance at three of the eight group runs.

The Proposal

We propose renewing for two seasons at $170,000 a year, a 3 percent increase, with these changes.

Cut the finisher photo framing and use its $19,000 to expand what worked. Double the expo station's staff and tablets and extend its hours into Friday evening. Send the follow-up email in two waves rather than one, at two days and three weeks. Move the group runs to May and early June, before the heat, and add a fall run in the week before the race.

Keep the target honest. Year two's target should be 1,700 members, based on year one's results with the expanded expo and email, not the 1,800 that was a guess.

In the decision model Jensen and Cornwell (2017) tested, sponsors who saw a partner adapt to results were less likely to walk away, and this proposal is built as that kind of adaptation.

Risks of Renewing

Renewal carries risks the credit union should weigh. The awareness gain rests on small survey samples, and a second year may show a smaller difference as the branches become familiar for other reasons. The expo station's results depend on runners having time to open an account during a busy weekend; if registration falls, so will the station's yield. And the cost per member compares favorably with digital advertising only while digital costs stay where they are. We suggest the credit union keep its option to exit after year two, as in the original agreement, and judge year two by the same counting rules.

What Not Renewing Would Mean

If the credit union does not renew, the presenting rights will be offered to other financial institutions in the spring, and the category exclusivity it holds would pass to a competitor. The four new branches would lose the one event in the metro that reaches their target households in person. The members already acquired would stay, but the awareness gain in the branch areas, built over one season, would have no event to sustain it. We do not present this as a threat; it is the practical consequence the finance team should set against the renewal fee.

The Relationship

Beyond the numbers, your branch managers have told us the group runs helped their new teams meet their neighborhoods, and the cheer zone was the most popular volunteer event in your company's year. Farrelly (2010) found that relationships end when partners stop investing in them, and we would like to hold quarterly planning meetings in year two rather than the monthly check-ins of year one, which your team found too frequent in the quiet months.

Recommendation

The partnership missed its member target but acquired members more cheaply than your digital advertising, raised awareness where you needed it most and engaged more employees than planned. We recommend renewal for two seasons on the terms above.

References

Farrelly, F. (2010). Not playing the game: Why sport sponsorship relationships break down. Journal of Sport Management, 24(3), 319-337. https://doi.org/10.1123/jsm.24.3.319

Jensen, J. A., & Cornwell, T. B. (2017). Why do marketing relationships end? Findings from an integrated model of sport sponsorship decision-making. Journal of Sport Management, 31(4), 401-418. https://doi.org/10.1123/jsm.2016-0232

Olson, E. L. (2010). Does sponsorship work in the same way in different sponsorship contexts? European Journal of Marketing, 44(1/2), 180-199. https://doi.org/10.1108/03090561011008664