Selling

How The NBA Hornets Posted A Double-digit Sponsorship Score

Retail partnerships, smart targeting help NBA team overcome tough sales environment. 1/12/09: The NBA New Orleans Hornets have increased sponsorship revenue by more than 20 percent this season by taking measures other properties seeking to overcome the challenging selling environment might want to explore.

The team has added more than 30 new sponsors to its roster, including Blue Cross and Blue Shield of Louisiana, NAPA Auto Parts and Rouses Enterprises LLC’s eponymous supermarket chain. It also has re-signed 20 existing partners to higher level commitments.

The Hornets plan to secure more sponsors for the remainder of the season through vendor programs with Rouses and Walgreen Co., an existing sponsor.

While a successful ’07-’08 season on the court and continued corporate interest in partnering with New Orleans properties as a way of demonstrating community support post-Katrina have no doubt played a role in the team’s sponsorship success, the organization has built on those factors by employing some new sales strategies:

Sign retail partners. Recognizing sponsors in the retail category can help open doors to packaged goods and other types of companies eager to build relations with their trade accounts, the Hornets focused on securing a supermarket partner and building a deeper relationship with drugstore chain Walgreens.

The team has secured a handful of new partners for the Walgreens program, including Golden Enterprises, Inc.’s Golden Flake snack chips; Magic Seasoning Blends, Inc.; and The Dr. G.H. Tichenor Antiseptic Co.’s line of oral hygiene products.

The retail programs allow the Hornets to access funds beyond traditional advertising and marketing budgets.

“In a time when advertising dollars are harder to access, properties can work with retailers to access other pockets of money such as merchandising or vendor support dollars,” said Tom Ward, the team’s vice president of corporate sponsorships. “Having a retailer on board makes packaged goods brands much more amenable to becoming involved with us.”

“We really felt the Hornets represented a local opportunity, and it’s a great vehicle to engage our vendors and drive sales,” said Scott Miller, Rouses’ CEO, who also took the tie for brand building following the company’s late ’07 acquisition and subsequent rebranding of 17 former Sav-A-Center stores, which doubled the chain’s size and gave it its first locations in the city of New Orleans.

Rouses is paying a cash fee to the team in exchange for exclusivity in the grocery category. It also is providing end-cap displays and ads in its weekly circulars for Hornets-themed vendor promotions at its 35 locations throughout Southeast Louisiana and Mississippi’s Gulf Coast.

The team, which will retain all revenue from vendors who purchase packages, has bundled Rouses’ promotional inventory with its own to create four month-long platforms (see sidebar for details). Rouses and the Hornets place the total promotional value of each package at $125,000.

The two organizations are currently trying to secure four vendor partners, each of which would have its own platform during a specific month. The program was scheduled to start this month, however “we got off to a late start so we will likely double up in March and April with non-competing categories and separate promotions,” Ward said.

Walgreens’ vendor program works in a similar way to Rouses’, said Ward, noting the chain will provide display space in its 150 stores throughout Louisiana. The retailer did not pay cash and does not receive category exclusivity, he added.

Target recession-resistant categories. Following conventional wisdom that economic uncertainty causes consumers to hold on to their vehicles longer, Ward reached out to companies in a category that should benefit from the situation: auto parts. The idea paid off with a new partnership with NAPA.

In addition to categories that are expected to weather the economic storm, the team continued to target other categories on its prospect list.

For example, Ward contacted businesses in the energy exploration industry. That effort paid off in a deal with LLOG Exploration Co. and an expanded deal with Hornbeck Offshore Services. The two local companies are using their ties to demonstrate corporate citizenship, gain hospitality opportunities and recruit employees, he said.

Offer team business to incent new sponsors. Ward brought on Blue Cross and Blue Shield after learning the franchise was in the market for a new health plan provider.

“Our health insurance contract was up, and we sent out an RFP that included the health care contract with the sponsorship component,” he said. “We want to do business with companies doing business with us.”

Expand on-site sales rights. First-time on-site sales rights account for roughly 30 percent of the team’s new sponsorship revenue, Ward said.

New partners this year include Emeril’s Homebase LLC and Bourbon Enterprises’ Best of Bourbon restaurant groups, as well as Treasure Group Food Service LLC’s Sake Café and Crystal Hot Sauce. The addition of Treasure Group marks the first time the venue has sold sushi and hot sauce, Ward said.

Other sponsors that sell food in the arena include Cheeburger Cheeburger Restaurants, Inc.; Copeland’s of New Orleans, Inc.; and Domino’s Pizza, Inc.

The Hornets late last year retained Octagon Worldwide to sell naming rights for the New Orleans Arena. The venue is owned by the State of Louisiana, but the team controls marketing rights. Sources
Rouses Enterprises LLC, Tel: 985/447-5998
New Orleans Hornets, Tel: 504/593-4700

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