The Biggest Club in The World is …

So, which is the biggest club in the world? Real Madrid, Barcelona, one of the emerging Asian clubs or one of the South American mega-clubs? This interview with Benfica’s president Luís Filipe Vieira is illuminating to say the least!

BRAND Loyalty

Luis Maia talks with Sport Lisboa e Benfica’s president Luís Filipe Vieira about the club’s changing fortune, which has seen the membership rocket since he put in place a marketing and PR campaign that saw the club’s membership rise to over 170,000, more than the likes of Manchester United and Barcelona
Portugal has only ten million inhabitants, and it is estimated that half of them support Sporting Lisbon or Benfica. The Guinness Book of Records verifies that the club’s total of 170,000 registered members even surpasses the kind of numbers that Manchester United and Barcelona can boast. And yet, just three years ago, few would have believed a forlorn European power could have put in place a marketing and PR campaign that would bolster their fan ranks and transform the club’s fortunes so significantly. President Luís Filipe Vieira was one of the few who did. He even sold some of the membership cards himself …

FB: After becoming Benfica president in 2003, what was your first priority?
The supporters have to be any club’s first priority, and that approach really started making sense to me when I was in charge of Benfica’s Sports Society for two years. During my time there, I had the opportunity to visit several of Benfica’s fanclubs, both in Portugal and abroad. It quickly became clear to me that people recognised the Benfica brand and message in a very passionate way, yet held no real connection or affinity with it as an institution. I’m quite sure this was the result of former Presidents who were keen to maintain a distance between themselves and supporters, and who would certainly never venture outside of Lisbon to visit groups. So the crucial factor behind our supporter drive would be the notion of letting people into a huge family, making supporters and members feel that they are important, and to be close to them.

FB: So how specifically did you go about convincing club supporters to become members?
The idea was to create ‘Kit Benfica’, and this was born when I visited the home of a fan in the United States. Despite living thousands of miles away I was amazed by their passion for our club, and I asked myself what could I do to help them actively participate in its existence? It had long been obvious that it was difficult for supporters located abroad to become members and maintain their commitment. Incredibly, if a fan wanted to start or renew their membership they would have to come to the stadium, so the support of those who lived away from the city often lapsed. The membership card scheme was therefore started with no such ties, and more than that, featured benefits that could be used anywhere in the world. It’s a simple concept; people would see our promotional campaign and pay for the card, and could immediately begin taking advantage of a number of incentives and discounts from our commercial partners, in everything from restaurants, banks and petrol stations, to shops, and leisure providers. This fidelity card scheme furthered the notion that you were allowed to be a fan and not come to the stadium, because the savings created by being a Benfica member were to be enjoyed anywhere. Of course, such an idea is nothing new in general commercial terms, and all of the world’s biggest companies have a schemes similar to this, but the attachment to a historical and communityreliant brand ensures that we would retain a passion within our adherents.

FB: In your promotion of ‘Kit Benfica’, did you aim the unique selling point as encouraging supporters to experience the passion again, or for them to enjoy a number of financial benefits?
Always the passion, no doubt about that. That is why we are here, after all. It was a new way for them to help us and for us to help them, and it came across well. The passion for the club was (and still is) the main vehicle to gain new members, and as I explained to people, it made no sense to be a fan but not a member, because the incentives and benefits were huge. During one of my visits out to meet the club’s fanbase, in the city of Leiria, I even had a supporter of Sporting Lisbon – our biggest rivals – ask to buy three kits for the discounts he and his three friends would receive from their local restaurant. The man told me that as soon as his work in that area was finished he would get rid of the membership cards immediately!

FB: How can you protect against membership lapses then?
I think this phenomenon happens in every club. There are 5%-10% of members who will stop buying the kit, and this is natural. In the meantime though, our project continues to grow stronger and our recruitment rate is far in excess of anything that we lose. We know it is difficult to change mentalities, because people only look after football, and for them, football is only about winning. If Benfica are winning, life is wonderful, and by that same principle, if the team are losing, less people come to us. This can never be changed, because the club is like a car and the football team is the accelerator.

FB: Does that mean the pressure remains intense to succeed, particularly now the club have recently ended their 11-year wait for success.
The pressure is always there because fans and members are very demanding. For us and for the club, the biggest thing was to see Benfica regain credibility, both in Portugal and abroad. That’s our biggest victory. We have given ourselves an easier path to walk upon, whereas before the arrival of the current regime, everyone said that Benfica was bankrupt and a spent force. In the early days we made compromises with the banks in order to organise the club’s debts, knowing that we would soon be proving our perceptions correct through a new stadium and new supporters. It’s true that our development has been through a marketable company project, but it’s similarly true that its success depends on the team’s results.

FB: How quickly is ‘Kit Benfica’ driving membership recruitment then?
We had 94,714 members on the 22nd of May 2005, while now we have in excess of 170,000. Benfica’s excellent performance in the Portuguese Liga this season will push this figure towards 200,000 over the summer, I am certain. Overall we plan to reach 300.000 members and we are very confident of achieving such a total. Although we rely on the team winning to a large extent, the expansion of the club is not purely determined by it, and that is a mindset we have been keen to take.

FB: So through the bankruptcy, do you now feel that the club has successfully recovered its reputation under your guidance?
It is curious that the construction of the stadium was seen by many people as a problem for the club, but in reality it became the solution itself because of the income it generates. Benfica was seen as bankrupt, but we had succeeded in building a stadium costing 162million Euros, and always in the knowledge that sponsorship and ticketing would be repaying the investment, and are now seen as crucial assets for the club. The Youth Academy cost 16million Euros and it is associated to a financing project that will totally pay the debt by 2011. Raising new talent for our team and for the international market was fundamental to the overall drive of the club, and one that essentially ends with the supporters. I have my way to deal with people and I think that I am in some way bound to supporters, and they feel the same about me. We are preparing the future.

WHAT IS ‘KIT BENFICA’?

‘Kit Benfica’ is the basic product that has helped elevate Benfica to lay claim to the world’s biggest Supporters Club. It costs 55 Euros and offers a membership card which offers discounts in more than 4,000 commercial outlets, plus a club DVD, squad poster, reductions on Benfica products, tickets for two matches, a cap or scarf, and a visit to the stadium. The kit can be bought in 2,400 different locations as well as on the internet, not to mention any one of the 200 ‘fan houses’ both in Portugal and abroad. Being a member of Benfica cost 12 Euros per month.

OTHER KEY REVENUE STREAMS AT BENFICA

Benfica’s former stadium had a capacity of 120,000, the biggest in Europe. While the new ground can accommodate only 65,000-seated, the income of just 2,500 spectators at the stadium is enough to reach 80% of the record gate receipts of the old. Thus, one of the biggest problems of a club that owes 315million Euros became an important solution, as ticketing accounts for 40% of Benfica’s income. Of the other revenue streams, member quotas come second, and sponsorship third. Other income includes merchandising in fourth and finally TV rights, representing only 7.5% of global incomes, compared to almost half of overall income for most of the biggest European clubs. Although many European sides have enjoyed the benefits of exclusive television channels for years, in Portugal this scenario is still a way from becoming a reality. Plans are gradually being put in place and Benfica will be the first Portuguese side to have their own channel and the ability to communicate to the club’s nine million fans abroad.

‘STARTING FROM GROUND ZERO’ – MIGUEL BENTO, MARKETING DIRECTOR
When the president asked me to join the team, he told me that he only wanted people willing to start from ground zero. We had to leave everything that had been done in history. That was the way to regain credibility and to gradually grow a profitable business. And that method has gone forward, as we seek to constantly question everything we have already done, and will strive to do. The success of the team determines how fast we can reach our goals, but the difference now is that Benfica has a project. We have a new stadium which is the main source of income and has brought the fans to our side. Other Portuguese teams only started to care about their fans when we started our campaign, and the benefits of up to 5,000 new members a month can clearly be seen. The future is to situate Benfica sideby- side with the big European sides. We are at a disadvantage when we compete against the five main European markets; the UK, Germany, Italy, Spain and France. But both on and off the pitch, putting ourselves up against those sides is only going to make this club better. We are working hard to find a way to reach 200million Euros of annual income, more than twice Benfica’s earnings last year, but we have a plan in place and we know we can achieve this. This can certainly be aided by the growth of our merchandising arm, though we already sit as no.4 in the world for the sale of Adidas products. And whilst in the ground itself noone could afford to pay for overall sponsorship of the stadium, we were innovative enough to section off sponsorship options for areas of seating. Our information systems can track our supporters and help us research and understand their habits, allowing us to target them with relevant marketing strategies. For example, we know which fans will come to the matches, who will still come when the team is losing, who might venture out if it is raining, or those who are typically unable to make midweek matches. We have found that sensitive marketing in football has become as important as what happens on the pitch, because the game is about so much more than ninety minutes

From Football Business

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