Marketing

Start With Why: Application of Sinek’s Golden Circle Model to FC Schalke 04

FC Schalke 04 | Source: facebook.com/S04 | Date: 28 December 2015

Source: facebook.com/S04

Building long-term relationships with consumers has become one of the critical issues for marketers (Kotler and Armstrong, in Shank, 2002:383). Hence, relationship marketing should be considered an integral part of the marketing approach for any marketer that takes the company’s mission seriously. In regard to sports audiences, Rowe and Hutchins (in ed. Billings and Hardin, 2014:10) state that “With the rise of “new” or “social media,” the concept of the audience itself has been thrown into question, with the capacity of individuals to communicate via blogging, Twitter, Facebook and other forms of “chat” suggesting for some that the institutional media are now outmoded in their capacity to create, maintain and influence audiences.” Sanderson (in ed. Pedersen, 2013:57) underlines the previous statement by explaining that social media enables sports fans to conveniently and actively communicate parasitical interaction directly to [sports brands]. With reference to relationship marketing it can be interpreted that the rise of the social web has emphasised the weight of the connection between brands and their followers, as well as consumers.

Various pieces of literature that focus on relationship marketing and communication in the business of sports have been produced (ed. Billings and Hardin, 2014; Bridgewater, 2010:46-78; Bühler and Nufer, 2009; Ferrand and McCarthy, 2009; Fullerton, 2007:538-571; ed. Pedersen, 2013; Pritchard, in ed. Pritchard & Stinson, 2014:123-141; Rein et al., 2006:231-261; Schwarz et al., 2013:333-355; Shank, 2002:383-384, 415-417; Spoelstra, 2001:170-186), which helps marketing professionals in sport organisations identify the necessary components and maximise the lifetime value of a fan – or, a consumer. As I described in the blogpost Customer Equity: Why BSC Young Boys fans might have one of the highest customer values in Swiss football, “There is an obvious relationship between the investment a company makes in a customer relationship and the return that investment generates (Grant, 2008:324). Kotler (2003:76) claims that the aim of customer relationship management is to produce high customer equity, which Rust, Lemon and Zeithaml (2004:110) define as the total of the discounted lifetime values summed over all of the firm’s current and potential customers. (2015)” Hence, it is highly advisable not to neglect the importance of a proper relationship marketing and communication approach.

Relevance and ‘stuff’ that solves consumer problems

Simon Sinek Start With Why graph page 56

Source: Simon Sinek, Start With Why (2009), p.56

Books such as Purple Cow: Transform Your Business by Being Remarkable (Godin, 2003), Start With Why (Sinek, 2009), and The End of Business As Usual (Solis, 2012) have recognised the fact that various companies and organisations have not approached relationship marketing effectively and have therefore missed out on opportunities to properly connect and stay connected with their consumers. Solis (2012) stresses, “The answer to what customers value lies in context. (p.35)” and continues, “The future of business will be defined by relevance. (p.45)”. Solis (2012) details, “Content is important, but it is no longer king. Context is king and is the key to earning relevance. (p.46)” Similar, Godin (2003:4) extrapolates, “As marketers, we know the old stuff isn’t working. And we know why: because as consumers, we’re too busy to pay attention to advertising, but we’re desperate to find good stuff that solves our problems.” The important parts to remember from these quotes are ‘relevance’ and ‘stuff that solves our problems’. In a nutshell, a marketer should ask her- or himself, ‘Why should consumers and fans care about our brand, product, or company?’

In his 2009 book Start With Why, Simon Sinek found an alternative perspective to existing assumptions about why some leaders and organisations have achieved a disproportionate degree of influence, which he calls The Golden Circle. According to Sinek (2009), any company faced with the challenge of how to differentiate themselves in their market is basically a commodity, regardless of WHAT they do or HOW they do it (p.47); people don’t buy WHAT you do, they buy WHY you do it (p.42); [as an organisation] you have to know WHY you do WHAT you do (p.65). Adapting Sinek’s statement to fit the context of a football club, it means that football is a commodity and that fans and spectators don’t buy WHAT the club does – the actual football action on the pitch –, but WHY the club does it. A good example is given by Italian Serie A club, Juventus FC. Here an extract from the club’s mission statement: “The club’s underlying purpose [– the WHY –] is to provide supporters with the highest level of enjoyment possible by continuing a winning tradition that has been established during a glorious history spanning over 100 years. (Juventus.com, accessed 2 January 2016)”

Sinek’s Golden Circle applied to FC Schalke 04

#S04Moments2015

Source: twitter.com/s04_en

The German Bundesliga side FC Schalke 04 provides a detailed mission statement – see here: www.schalke04.de. An exploration of the application of Sinek’s Golden Circle model to the 7-times German Bundesliga champions is given in the following sections.

WHAT

Sinek (2009:39) defines WHAT as follows: “Every single company and organization on the planet knows WHAT they do. This is true no matter how big or small, no matter what industry. Everyone is easily able to describe the products or services a company sells … WHATs are easy to identify.” Sinek (2009:67) stresses the importance of the consistency of WHAT by stating that with consistency people will see and hear what a company believes.

This is the result, the proof of the actions taken in HOW to reach WHY. The end product or service visible to the consumer, the fans. In the case of Schalke 04, based on simple observation, the ‘WHAT they do’ is:

to produce professional football entertainment.

That includes the game played in the stadium, as well as the stories, analyses, and drama told before, during, and after the match.

The next step will explore HOW the club achieves the production of their product.

HOW

According to Sinek (2009), “Some companies and people know HOW they to WHAT they do. Whether you cal them a “differentiating value proposition,” “proprietary process” or “unique selling proposition,” HOWs are often given to explain how something is different or better. Not as obvious as WHATs, many think these are the differentiation or motivating factor in a decision. It would be false to assume that’s all that is required. (p.39) … HOWs are the actions you take to realize [the belief of WHY]. (p.67)”

#S04Moments2015

Source: twitter.com/s04_en

In their mission statement (schalke04.de, accessed on 3 January 2016), Schalke 04 mention various factors that explain HOW the club takes action to realise its belief:

First, the club wants to remain true to its name, Football Club Gelsenkirchen-Schalke 04 e.V., its colours, blue and white, its organisational structure as a club, and to its home at Schalker Markt in Gelsenkirchen. The club shall within the financial means at its disposal enable its supporters from all social backgrounds to participate in the life of the club and attend matches and acknowledge its social responsibility. Every one gives their best for the club, whether they are players, employees, members or fans. Every one stands by FC Schalke 04 with conviction in good times and bad.

Furthermore, interaction and dialogue with each other shall be based on respect, equal terms, tolerance, and trust, and the decision-making authority remains with the officials named for that purpose in the constitution. Schalker reject discrimination and violence and show racism the red card and actively promote tolerance and fairness.

In conclusion, the collective goal is sporting success, and the aspiration of a long-term concept for all Schalke 04 teams shall remain intact regardless of changes of personnel. In order to shape the roots of the club’s future, which lie in its past, Schalke 04 actively invests in sporting development, retention of members, fans, employees and sponsors, business development, and social responsibility.

Now we know WHAT Schalke 04 does and HOW they do it. The next step will try to find statements of WHY the club does WHAT it does in its mission statement.

WHY

Sinek (2009:39) elaborates, “Very few people or companies can clearly articulate WHY they do WHAT they do. When I say WHY, I don’t mean to make money–that’s a result. By WHY I mean what is your purpose, cause or belief? WHY does your company exist? … And WHY should anyone care?”

Schalke 04 answers the questions concerning the WHY in its mission statement (schalke04.de, accessed on 3 January 2016). The club explains,

“From its local origins Schalke 04 has evolved into a club whose many “thousand friends” now stand together all over the world. We are Schalker everywhere; some by birth, but all of us from the heart. Schalke has always been a melting pot of different cultures and nationalities and that is how it should always be. …

shared passion for the game and for Schalke 04 and pride in our tradition is what unites us at Schalke. Ever since the club was formed we have lived out emotions very intensively. Collective elation and collective pain are important and valuable parts of our identity. This passion should also be imparted to the employees of the club, regardless of whether they are in the sporting area or in other areas. …

We stand by our FC Schalke 04 with conviction in good times and bad. We are proud to be Schalker!

And that last statement hits the WHY-nail very hard on the head: Because we are proud to be Schalker! …and all the other legitimate answers to the question WHY does the club do WHAT it does.

IMHO

I am well aware that basically any football club can answer Sinek’s questions in the same way that we answered them in this exercise with Schalke 04. Nevertheless, I searched for answers to the above-mentioned questions on various club websites, forums, and through Google search queries and could not find much concrete information from popular clubs. The simple fact that Schalke 04 publicises its detailed mission statement with answers to HOW and WHY they do WHAT they do is proof that at some point the club’s management spent time to think about these crucial questions. In the case of other clubs we do not know if they actually explored and wrote down answers to those questions.

In addition, the Schalke 04 brand ranked #14 in the Forbes Soccer Team Valuations 2015 (forbes.com, accessed on 3 January 2016) with a team valuation of $572m, and it ranked #13 in the Brand Finance Football 50 2015 (brandfinance.com, accessed on 3 January 2016) with a brand value of $302m. These rankings portrait the appeal of the Schalke 04 brand, which can be attributed to the business efforts of the club. Furthermore, having hosted the third-largest home-crowd in the 2014/15 season of the German Bundesliga with an average attendance of 61.578 (stadionwelt.de, 2015) it seems safe to state that the club is doing a good job at communicating WHY they do WHAT they do to their local community, which seems to care about and share the belief of Schalke 04. Definitely a good example in regard to Simon Sinek’s Golden Circle model.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s