Nike Running Club
Building Grassroots Fans to Generate Buying Power
The recession has most companies scaling back their advertising budgets, but Nike is investing big in a different marketing approach: cultivating loyalty at the grassroots level.
Building Grassroots Fans to Generate Buying PowerBy Sherry Lee, Chao-Yen Lu
From CommonWealth Magazine (vol. 412 )
Every Tuesday night at 8, rain or shine, a disparate group of 150 Taipei residents in shorts and sneakers assembles outside Nike's flagship store in the city's Xinyi District to warm up for a run.
Mostly strangers before joining the group, they have generally been drawn to the Nike Running Club over the past year by word of mouth. What began as an intimate group of 15 joggers has now grown tenfold.
The long string of runners clearly stands out as it winds its way along the red brick pavement in front of Taipei City Hall and around the National Sun Yat-sen Memorial Hall on a three-kilometer jog. The club includes members as varied as a high school freshman who joins family members on the run after school and a computer engineer who has run 50 full-length marathons.
Indeed, the waiting list of would-be participants has become too long, as even companies like Panasonic Taiwan have heard of the club and registered to join. Nike has launched one group that runs seven kilometers on Thursday nights, and has arranged special corporate outings that are already booked until next March.
The running club now meets every Tuesday and Thursday night, and Nike provides a trainer to help interested city residents develop specialized knowledge on how to warm up, run, and cool down. Most importantly, the activity is free – fully sponsored by the sportswear giant.
Nike sneakers are generally synonymous with basketball, but the running club reflects the company's interest in reinventing the image of its running shoes.
The current economic downturn has compelled many companies to scale back their marketing budget, but Nike refuses to surrender to the difficult economic environment, spending more than NT$1 million a year to sponsor running clubs in Taipei and Kaohsiung.
Monica Chen, BRS Nike Taiwan Inc.'s PR supervisor for marketing, describes Nike's marketing strategy as appealing to the "grassroots." The company believes that only by initiating close interaction with consumers at the grassroots level and forging a long-term relationship can it successfully strengthen customer loyalty.
"It's no longer about simply seeing a consumer buy something and carry the bag out the door. Marketing today is thinking about whether that consumer will come back," Chen says.
Nike is betting that if a company takes good care of its customers, they will become its brand managers and influence others by talking up the company wherever they go.
Steering Clear of the Hard Sell
Buying Nike products is not a prerequisite for joining the running club. The Nike "swoosh" is not visible on the running shoes of one of the club's regulars, a 65-year-old woman surnamed Mao. She first became aware of the Nike brand and its distinctive logo through her granddaughter and then joined the club. Though she has yet to buy any of the company's products, when asked what her impression of the brand is, she replies, "This brand gives back; it doesn't just sell products."
Though Nike does not consciously promote its products to club members, it has observed over the past year that the group has not only expanded participation, but also changed consumer behavior.
The key to getting people to join the club is its emphasis on a "specialized" running experience. That pulls together a number of like-minded jogging enthusiasts who develop a running habit that becomes an indispensable part of their routine. Almost inevitably, they eventually purchase Nike items.
The club members often meet or jog on their own after the group run and exchange information on running and running gear. But even more important to Nike, they recruit their relatives and friends to join the club.
"This is building up from a base, constantly cultivating a group of loyal fans, who then expand the power of the brand," says Winnie Lan, the brand development director of Ogilvy & Mather Taiwan, amazed by the more than 100 people she sees running together every Tuesday night from her office near Nike's flagship store.
Aside from the emotional pull of the interaction with others, the running club also offers a "rational" experience. Before every run, Nike invites club members to try on new pairs of shoes and then critique them after using them for the jog.
"Even if the new shoes get lousy reviews, they still provide important information," says Lin Chien-hsing, a clerk at Nike's flagship store who is himself a big fan of the Nike brand.
In an era that stresses competition, Nike tries to make the most of every opportunity it gets to interact with customers.
At the company's flagship store, where personalized service is the norm, smiling store clerks get down to help customers tie their shoes or offer high fiber crackers and water to customers who have just finished their run.
That personalized experience extends to the running club. As consumers directly participate in the group, they come to identify with it both emotionally and intellectually, and develop a brand preference. But it is easy to wonder if the running clubs, which frown on promoting sales of Nike products, actually help boost revenues.
Cheng Kon-Fah, a professor at National Chung Cheng University's Graduate School of Marketing Management, says consumers go through five steps in embracing a brand, evolving from "awareness" and "knowledge" to developing a "liking" and then a "preference" before making a purchase. The Nike Running Club at the very least gets the runners to the "liking" stage, he says.
Lin Chien-hsing observed that many runners wore shoes from competing brands when they first joined, but switched to Nike shoes after participating for about half a year.
"It's really helped sales. They come every week and it's hard for them not to buy something," Lin says.
Most companies may be squeezing their advertising budgets to cope with the economic downturn. But Nike has found a relatively inexpensive way to mobilize an army of runners who promote the brand by word of mouth, building deep brand affinity and generating customer-attracting power.
Translated from the Chinese by Luke Sabatier
Chinese Version: 累積粉絲群 創造購買力