2000: Brand-building power draws nongolf firms
Wednesday, November 30, 2011
At first blush, it doesn’t seem to make a lot of sense for an international energy company to spend more than $10 million a year on professional golf endorsements and sponsorships.
What could hat-and-shirt deals with a pair of middling touring pros possibly do for a business like that? And how much could it benefit from being a presenting sponsor of a season-ending PGA tournament?
Apparently, a lot.
“It has gone very well for us,” said Paul Bowers, senior vice president and chief marketing officer for Southern Co., an Atlanta-based corporation with annual revenues of nearly $25 billion. “Our name recognition has increased up to 20 percent since we got involved in the game four years ago.”
Name recognition was a primary reason why Southern Co., which has endorsement contracts with Billy Andrade and Joe Inman and is the presenting sponsor of the Tour Championship as well as the official energy company of the PGA Tour, initially linked up with golf. Fred Couples, Davis Love III and Phil Mickelson recently appeared in a Southern Co. television advertisement, but Andrade and Inman are the only PGA Tour pros who wear Southern Co. logos.
“The energy industry is deregulating in the U.S., and as that happens the market for power in this country is becoming more and more competitive,” Bowers said. “As that market continues to open up, we as a company would like to have some recognition out there. We want people to know . . . we are more than just a regional firm that covers the Southeast. We are an international company with operations on five continents, and we do business all over the U.S.”
Southern Co. wants to gain name recognition with people that are “energy decision makers” for their main customers: industrial companies, municipalities and utilities.
“We matched up our market research on those individuals and what they like to do, and we determined that golf was the best way to reach them,” Bowers said. “We are not selling to the retail market, but rather the wholesale market, and the people who make decisions on where they get their power like golf.”
An association with golf also gives the company excellent opportunities to entertain customers and reward employees. And it enables Southern to get involved with charities such as the East Lake Community Foundation, which was started in 1995 to revitalize the inner-city East Lake community where the fabled East Lake Golf Club, site of the 2000 Tour Championship, is located.
Prior to this year’s event, for example, Southern Co. sponsored a one-day junior golf tournament at a newly built nine-hole course across the street from the East Lake course layout. Southern Co. also made a significant contribution to the foundation.
Nongolf companies have been getting involved with golf sponsorship for years, and they have been attracted for similar reasons.
“It provides an opportunity to build a lot of business-to-business relationships in a comfortable environment,” said Doug Pirnie, senior vice president at the International Management Group. “It allows you to reach a target audience with a very desirable demographic, not only to raise name awareness but also to sell goods and services. And by affiliating with a sport like golf, it tends to elevate a company to a more upscale-type product.”
Invensys PLC, a London-based controls and automation company with annual revenues of $16 billion, is in the midst of a three-year, $14 million sponsorship of The Invensys Classic at Las Vegas.
“One of the main reasons why we did this is that Invensys is a new name for a company formed by a merger,” said Roy Schumacher, vice president of business development for the business, which is listed on the London Stock Exchange. “And we felt that golf would give us a way to get that name out to our potential customers, many of whom we found to be avid golfers.”
The Las Vegas event provided Invensys other benefits, too.
“In addition, we used it as a way to entertain and educate some members of the press and make a splash in the financial community,” Schumacher said. “We brought maybe 50 members of the financial media out to Las Vegas and gave them an introduction to our company.”
Finally, Invensys employed the Vegas tournament, which the company sponsored for the first time in 2000, as a way to show off their new, Internet model home, a sort of futuristic “smart” house with remote-controlled appliances and utilities.
“We got a lot of notoriety for that, a lot of interest, and that had a lot to do with our having it at our golf tournament in Las Vegas,” Schumacher said. “To us, golf works.”
And it seems to work for a lot of companies who otherwise have nothing to do with the sport.