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How demographics helped Richmond Football club double its membership


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In the information age, you would think location matters less. In fact it matters more. Demography helps you understand how to be in the right place at the right time which is often the key to success in business. We will illustrate this with a case study that shows how Richmond Football Club became one of the top three clubs in the AFL for membership size by employing demographic evidence to inform its strategy.

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How demographics helped Richmond Football club double its membership

  1. 1. How demography helped Richmond Football Club double its membership base February 2016
  2. 2. Knowledge of “place” can convey a powerful strategic advantage. Strategic direction can be informed by observing broad demographic trends. Successful implementation will be determined by understanding local nuances.
  3. 3. For the last twelve years I’ve been working with largest team of demographic experts in Australia. Their job, and their passion, is to understand how demographic change will affect every part of Australia - – the nation, every state, region, and city; each suburb, neighbourhood and city block. We call this their “knowledge of place”. My job is to use their “knowledge of place” to answer our client’s strategic questions. Like Richmond Football Club. Who wanted to double its membership … In five years … In a highly competitive landscape.
  4. 4. You are strategists I’m a demographer Strategists often employ demographers to tell them about the broad trends occurring in society … …and the opportunities and threats that these pose for business.
  5. 5. Any demographer worth their Salt … can tell you Australia is in the midst of a population boom the likes of which has not been seen since the gold rush. 2006 was a watershed year – when long-held demographic patterns and cycles changed – seemingly overnight. Demographically there is a new reality which has important implications for all businesses. These changes are being driven by both economic and social events. They are reshaping our society.
  6. 6. On the economic side, there has been a step change in levels of overseas migration to Australia, driven by good economic times. The pre-2006 reality has migration adding, on average, 100,000 people to the population each year. The post-2006 reality has migration adding, on average, 200,000 people to the population each year. DOUBLE the old reality. Despite the end of the mining boom, we are unlikely to return to pre-2006 averages. However, the end of the mining boom is leading to a redistribution of growth – back to Sydney and Melbourne. After decades of playing second fiddle, Melbourne is seriously challenging Sydney for the dominant position.
  7. 7. On the social side, Australia is in the midst of a baby boom, the like of which has not been seen since the post WWII boom. And think what a massive impact that boom had on every aspect of society. Since 2006 there have been 50,000 more children born in Australia every year than long term averages (the orange bars). The first of these kids started primary school in 2011. They will start high school this year. By 2026 there will be 705,000 more children in our schools than there are today. Think how many new schools that translates into… And the business opportunities for children’s products and services …
  8. 8. Several years ago we presented this growth scenario to our clients, the Catholic Education Office – responsible for all Catholic schools across Victoria. First they asked us to check our numbers. Then they had to completely rethink their “business as usual” strategy, and start planning for new schools and acquiring land. The state system is yet to catch up. Jeff Kennett may well rue the day he closed 220 schools in Victoria based on a trend rather than recognising the low point in a cycle.
  9. 9. The combination of these economic and social drivers means that the dominant population group– the aging baby boomers – has been caught up by two other groups. There are three growth markets to focus on – retirees, home-builders (driven by migration) and children (driven by the baby boom). This is good news for Australia. This means growth. This means opportunity. Often strategists think this is all the demographic information they need to get started on their strategic work ….
  10. 10. Who? How? What?
  11. 11. And it is an important starting point. Understanding broad demographic change helps you answer three important strategic questions… Who should I provide my products and services to? What services should I focus my efforts on? How will I build the business to take advantage of the changes afoot? For our client, Stockland, the property developer, it means diversifying from building housing estates on the urban fringe, to adding retirement villages and medium density housing to their product mix. Answering these three questions helps you set your strategic direction.
  12. 12. Where? When?
  13. 13. BUT, the success of these strategies can be determined by answering two more questions. Where should I locate my business activity/retirement villages? When is the best time to enter and exit a location? Location and timing matter.
  14. 14. Strategy of Place This piece of the strategic puzzle is referred to by Harvard Business School professor, Juan Alcacer, as the strategy of place.
  15. 15. “Many companies don't understand that what works in one location may not work somewhere else.” “Geo-mistakes sap energy out of an organization and cause it to lose focus on what it was doing well in the first place.” “…especially when it means siphoning time and attention away from an existing successful business.” “…take a long-term, strategic view of location decisions.” Juan Alcacer, Professor of Business Administration, Harvard Business School
  16. 16. Our client, a large retailer, places strategic importance on being first to market in new residential growth areas. If they build too late, they lose their first mover advantage. But if they build too early, and there’s not enough population to support their store, it can cost them upwards of half a million dollars per annum. Timing is critical to strategic success.
  17. 17. What makes location decisions so tricky? After all, most organisations provide their products and services to people from a place. Schools, for example, provide education to children in suburbs. The problem is that places respond to broad demographic trends differently. Remember those 705,000 additional school children? Despite the huge growth in school-age children nationally, not all suburbs will be affected by the baby-boom in the same way. Some suburbs will actually experience a decline in this age group. Knowing where and when to respond requires a detailed “knowledge of place”.
  18. 18. So how can you feel confident that you are investing in the right place at the right time? Demographers study how broad demographic trends will play out in each suburb, neighbourhood or community. Watch the video to learn more…
  19. 19. There’s a bit more to that video, but I hope that snippet gave you an insight into the “knowledge of place” that demographers can bring to those tricky where and when questions.
  20. 20. Now that we’ve set the scene, here’s how we applied our “knowledge of place” to give Richmond Football Club a strategic locational advantage.
  21. 21. Football in Australia is not a typical sports market. It’s not like in the USA where each elite team “owns” the fan base in a whole state.
  22. 22. In Victoria there are ten clubs in one state, all competing for fans. This is a strategic challenge for the AFL. How do they encourage clubs to grow the total membership pie rather than taking fans from each other? It’s a strategic challenge for each club. They have to decide where to build their fan base in this highly competitive landscape. Do they focus on areas where support for the AFL and their club is strong? OR… Do they look for areas where AFL is not strongly supported, and build a new fan base – a longer term strategy?
  23. 23. In the last five years, Richmond has been the most successful club in the AFL at building membership. How did they do it?
  24. 24. We need to go back to 2008 to a decision made by the previous management team. Richmond’s home ground at Punt Road was not available for training during the cricket season. The club was looking for an out-of-season training ground. The location of alternate training grounds is an important strategic decision for a club. It’s an opportunity to engage with people in a new location. The management team selected Craigieburn in Melbourne’s northern growth corridor. They hoped to tap into the rapidly growing population and a brand new facility, provided by the council and property developers.
  25. 25. A bit about Craigieburn. Craigieburn is on Melbourne’s northern fringe, 35 km’s from the CBD. It sits in the centre of a fast growing residential area. Forecasts show it will grow by 78,000 people by 2031. Sizeable growth – and very attractive to those looking to grow with it. Many of the new residents will be young families with children – kids the right age to make their allegiance to a football team. And they were in the right socio-demographic bracket to be able to afford club membership. It all looked very good.
  26. 26. But fast forward several years and this decision was not bearing fruit. People in Craigieburn were not supporting the Tigers. It looked like it was going to be a long, slow burn to build a fan base there. It was disheartening AND expensive to take a full, elite football department out to training six times a year and only 300 people to turn up to watch.
  27. 27. In 2010 a new, progressive management team started at Richmond. Headed up by CEO, Brendon Gale with Cain Liddle as his GM of Consumer Business. They set an aggressive growth strategy to double their membership in five years. They decided to revisit the Craigieburn decision. But if they were going to convince their Board and the AFL to support a new strategic direction, they needed strong evidence to support any change.
  28. 28. Areas with more than 400 RFC members, 2011
  29. 29. They started mapping members by suburb across Melbourne. Mapping your data is powerful. Straight away you can see a strong spatial pattern of membership in the east and southeast. (The gap around Dandenong can be explained by the large numbers of migrants from non-English speaking backgrounds there.) And you can see that despite all the effort, very little inroads had been made into Craigieburn. So now they have a map showing where current supporters live – but it doesn’t tell them where to build their future fan base. Football is generational – you tend to support the team your parent’s supported. Low hanging fruit are the children of past and current members. So the question is, where are they?
  30. 30. Cain had been to a talk by demographer, Bernard Salt, and realized that demographics may be able to answer his question. He wanted to work with a firm who could take the broad demographic trends Bernard had talked about and apply them to their business and local market. .id started work with the club in 2011.
  31. 31. Forecast population growth 2011-2036
  32. 32. We were immediately struck by the Craigieburn decision. Why would Richmond, a club with a long history in the inner southeast, go north? To a demographer, it was clear why Richmond were struggling to gain traction there. But, unless you had demographic expertese, it would be an easy mistake to make. The northern growth corridor is one of the fastest growing parts of the city. AND it was full of young families. Why wasn’t it working?
  33. 33. Strongest net movements of people between 2006 and 2011, Melbourne Source: ABS, Spatial Analysis & Research Branch of the Victorian Department of Environment, Land, Water & Planning (Research Matters Bulletin, Issue 64)
  34. 34. Each of us makes individual decisions about where we will live at different times in our lives… … as students, when we start a family, when we retire. This feels personal, but as the video showed, collectively it creates predictable and measureable patterns. These patterns are shown clearly in this map of where people went when they changed their address. What an incredibly clear pattern it is. Demographers get very excited about this sort of thing! You can see how strong the north-west (green arrows) versus south- east (yellow arrows) divide is in Melbourne. People who live in the southeast, do not tend to go north or west when they move house.
  35. 35. Strongest net movements of people between 2006 and 2011, Melbourne/ RFC members
  36. 36. Richmond’s traditional fan base is in the inner southeast. As each generation of Richmond fans grows up and starts their own families, they are most likely to look for a house they can afford, on the same side of the city as they grew up. Demographers call this outward sectoral migration. Here you can clearly see people who live in Richmond strongholds fanning out across the east and southeastern suburbs. The next stop on this outward journey was Cardinia.
  37. 37. A bit about Cardinia. Cardinia is on Melbourne’s southeast fringe, 55 kms from the CBD. The main town is Pakenham. It is fast growing residential area. Forecasts show it will grow by 80,000 people by 2036. Many of the new residents will be young families with children – kids the right age to make their allegiance to a football team. And they were in the right socio-demographic bracket to be able to afford club membership. It all sounds very good. It all sounds very familiar. It sounds a lot like Craigieburn. BUT there are three important differences…
  38. 38. Areas more likely to support RFC than other AFL clubs
  39. 39. First, there is low hanging fruit… People in Cardinia like AFL. It ranks in the top three areas for AFL participation. Craigieburn, featured in the bottom three. Added to that, people in Cardinia already like Richmond. Existing residents of Cardinia support Richmond at a higher rate than other teams in the AFL. This indicated that fan engagement would provide a fast return on investment.
  40. 40. Areas from which Cardinia gains its population
  41. 41. SECOND - There was a generational advantage. Migration data confirmed that Cardinia was gaining its new population from areas where Richmond already had a strong following. These are the children of past and current supporters, setting up their own homes, and bringing up the next generation of potential fans. This bodes well for the future.
  42. 42. Areas with more people than average from non-English speaking backgrounds
  43. 43. THIRD - Cardinia does not gain its population from new migrants to Australia, who would take longer to bring into the footy fold. We knew from previous work with the AFL that areas, where many families come from non-English speaking backgrounds, have the lowest membership rates. In Cardinia, only 7% of the population came from non-English speaking countries. This compares to 24% across Melbourne in general and 27% in Craigieburn. Richmond does have a longer term strategy involving new migrants, but that’s another story.
  44. 44. The evidence was clear and compelling. The biggest future opportunity to attract fans and revenue were in and around Cardinia.
  45. 45. But, with the lessons from Craigieburn still fresh, the Richmond Board needed to be convinced of any changes in direction. Having the evidence presented by people who could view their business through a demographic lens gave them the confidence to proceed. They could see how patterns in the way people live in different parts of the city, clearly explained the patterns they were seeing in their own data. It gave them the missing part of the story. The hardest thing was convincing the players to make a 50km journey on a bus to go to training!
  46. 46. Next, the evidence ensured that the AFL supported re-engineering the boundaries for compulsory player clinics and school visits, so that Richmond focused on the southeast growth suburbs. This was an important acknowledgement from the AFL that they were supportive of the decision.
  47. 47. Richmond also needed the Shire of Cardinia to partner with them – Cain recalls, “When Brendan (Richmond CEO) called the Shire CEO, he had a strong narrative and compelling evidence – so the conversation quickly turned to how they could help each other meet their objectives…”
  48. 48. For the council the advantages are clear: Football brings people together and strengthens the community. It can enhance the health and well being of residents who participate. And if offers families an affordable and fun entertainment option.
  49. 49. So how did it go? I guess I gave the punchline away at the beginning… The club broke membership records every year for the last five years growing 9% per annum. In Cardinia membership has grown 26% per annum since 2012. As a result, membership doubled from 36,000 in 2010 to 72,000 in 2015. Richmond is now the third largest club behind Collingwood and Hawthorn, despite not having finals success (there’s always this year…) First year member retention is the highest in the league and overall retention ranks consistently in the top three.
  50. 50. The community is right behind them.
  51. 51. And the players are happy. When the team goes out to Cardinia for training, 4000 people show up to watch. Which makes that 50km bus trip all worthwhile. By understanding local demographic patterns, as they related to their business, Richmond ensured that their effort was being channeled into the right place. Organisations are often looking for technology or innovation to deliver the big win. Richmond got a 100% upswing from understanding place.
  52. 52. Seven ideas to take-away…
  53. 53. Knowledge of “place” can give you a significant competitive advantage. Strategic direction can be informed by observing broad demographic trends. Successful implementation will be determined by understanding local nuances. Not all growth is the right growth. You need to understand what is driving it. Change happens in cycles, not trends. Mapping your data with demographic data provides powerful insight. Evidence presented as narrative can convince others to support you.
  54. 54. Should you talk to a demographer? “If they’re with another AFL club – I’d say don’t do it!!” “But if I ever went to another club, it would be one of the first calls I’d make.” Cain Liddle, GM Consumer Business, Richmond Football Club
  55. 55. Download a copy of our ebook, Three Growth Markets in Australia, for an overview of broad demographic changes. Speak to an .id consultant to understand how local nuances can provide a locational advantage for your business.
  56. 56. Thank you to Brendon Gale, Cain Liddle and RFC and Go Tigers in 2016!