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Loyalty system, part 4: How can your sponsors take advantage of the system

Beside your sponsors also being your fans and hopefully using the system like a regular fan, we will explain how companies can use Gamedayz Marketing System to improve their ROI and how it can help your club to make more money.

How can sponsors benefit from the loyalty system

If you do not recognize the terms customer acquisition cost (CAC) or customers life time value (CLV), it can be the key to new partnership and more revenue!

Customer acquisition cost is a term used to describe the cost you pay to get a paying customer. For example: You spend 1000 $ on marketing and get 100 customers. This means that your CAC is 10 $.

If you spend 500 $ on radio advertising and 500 $ on advertising via social media, with the same outcome. Then your CAC is still 10 $.

But the question is how many customers come from which channel. Maybe 10 customers come from Radion and 90 customers from social media. This means that your CAC via radio is 50 $ per customer, while on social media your CAC is 5.5 $.

Lets say that each customer spends 40 $ at your store. This would mean that you are losing money on the radio advertising and making money on via social media. You basically subtract the the CAC from what the customers are spending.

Radio: 40 $ - 50 $ (CAC) = -10 $

Social media: 40 $ - 5.5 $ (CAC) = 34.5 $

Then you realize quite quickly that you want to spend more money on social media and less on radio advertising.

How can this be applied to your club?

Now replace social media with your club. If a company can put an offer in your loyalty system, you will be able to prove how many of your fans your club is generating to their store. You can then charge for the company to be included in the system + an extra fee each time the coupon is used. This allows you to provide more data and prove the effectiveness of the sponsorship.

Ex. 200 $ to be seen in the system per year + 1 $ per used coupon

If you then have 1000 fans who goes to that company per year, the CAC will be: 200 + 1 * 1000 = SEK 1200 $

If the company then has an offer: "buy for at least 10 $ and get a 20 % discount There revenues will be: 10 $ (income) - 2 $ (discount) * 1000 = 8000 $ But is it worth it? With this example a company would pay your club 1200 $ and that would generate 8000 $ in revenues to the company. Which equals a profit of 6800 $ If you can show how many customer your club is generating each year to a company they would quickly understand the value your club is giving. Summery

This was just a simple calculation, showcasing how your club can make new revenues streams by improving the what to offer your sponsors. The system is built to help your club to create new and more effective sponsor packages to attract news partners and make more money.


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