June 15, 2010
AMR Team Evaluates an Online Marketing Program for Big 5 Sporting Goods
Recommends pay per click program and revised email methods
LOS ANGELES -- Big 5 Sporting Goods is a familiar name to consumers across the western United States where the firm operates almost 400 stores. Big 5 has traditionally relied heavily on print advertising but, this year, the firm enlisted a team of students in UCLA Anderson's Applied Management Research (AMR) Program to determine the most effective online marketing tactics for increasing in-store sales.
Students David Esterly, Hong Sung Han, Dan Pulver, Jessie Reder, Stacy Siele and Meredith Stiglitz met with Big 5's CEO Steve Miller and senior management during several visits to the firm's corporate headquarters in El Segundo, CA. The team was asked to develop strategies to help Big 5 attract new customers and increase loyalty among existing customers.
The team was advised by UCLA Anderson Assistant Professor Richard Saouma. "This team is passionate about sports marketing," said Professor Saouma. "They jumped on the opportunity to contribute to Big 5, and the firm met all of our questions and comments with enthusiasm. Because online marketing is relatively nascent, the team frequently conferred with faculty and alumni. After 20 weeks of research, and the satisfaction of seeing many of their suggestions implemented, the students shared a valuable learning experience that could never be duplicated in the classroom."
The first phase of the project involved researching the online marketing options available via professional journals, library databases, Web sites and interviews with UCLA Anderson faculty. The team divided these options into seven categories ...
- E-mail marketing
- Pay per click advertising
- Search engine optimization
- Display advertising
- User-generated content
- Social networking
The team's secondary research revealed that pay per click (PPC) advertising is regarded as being a leading way to attract new customers, while e-mail marketing is considered the best way to increase customer loyalty. These two categories became the focus of the project.
PPC is advertising delivered by a search site such as Google or Yahoo!. The advertiser pays the site each time a user clicks on an ad and is delivered to the advertiser's landing page.
To determine the importance of adding PPC to Big 5's marketing mix, the Team implemented a trial PPC campaign in a test market and compared the results with a similarly-timed print advertising campaign. The results of the trial PPC campaign were positive, including a favorable return on investment. Given these results, the team recommended that Big 5 implement PPC after some further testing to develop ad content and keywords.
The team tested the effectiveness of the firm's e-mail campaign by sending surveys to 75,000 members of the Big 5 E-Team Program, which provides information to customers who have opted to receive special offers and promotional materials by e-mail. The survey produced demographic, preferential and behavioral information, which suggested that there was room for improvement in the frequency, format, and content of Big 5's e-mails. Effective messages catch the attention of a reader immediately, are easy to understand and deliver something of value.
The team recommended that Big 5 accommodate customer requests related to the frequency and type of e-mail content they receive. They also recommended that Big 5 limit each e-mail to one key message. Finally, they suggested that Big 5 collect more information about customers' preferences, spending habits and demographics when they sign up to receive e-mail messages from the firm in order to better design and segment future mailings.
The students presented their recommendations to Big 5 in a written report and oral presentation to the company's senior executives. "This project provided a very timely and useful perspective on our Internet marketing strategy," said Big 5 CEO Steve Miller. "These students have provided valuable insight and I think the impact on our customer base expansion will be meaningful."Contact Information
Media Relations, (310) 206-7707, firstname.lastname@example.org