Aug. 8, 2012
Before LeBron James, before Dwayne Wade, before Shaquille O'Neal, there was the Market Research team!
Of course I am kidding, but in 2002 I arrived at the Miami Heat as an entry level Market Research Analyst in the newly formed Market Research department. At this time, now head coach Erik Spoelstra was only 2 years removed from being the video coordinator, and was working as the head Scout. We were also struggling on the court with one of the worst records in the NBA. Although the team was not performing well, the Miami Heat executives were developing a strategic plan to carry the franchise well into the future.
What many may not know about the Miami Heat, is that along with Pat Riley and the basketball side of the operation, the ownership and business executives with the Miami Heat are as good as any in all of professional sports. Although I was not involved at the strategic planning level, I was able to have a court side seat as the Miami Heat leadership team made some very key strategic moves to advance its franchise during this time.
First, if you know the South Florida market, you know that the fans can be somewhat fickle, and there is an abundant of entertainment options for the community to gravitate towards in South Beach. The Heat knew that it had to be more than just a pure basketball product to be successful in South Florida. As the Miami Heat executives made an analysis of their current situation, and who they wanted to be as a franchise, they understood that true entertainment would need to be a focal point.
The Heat decided to make entertainment, South Beach style, a daily focus of the organization. The Heat hired the top South Beach DJ in DJ Ire, it invested in premium game atmosphere assets such as special lighting, music, and special effects technology. The Heat implemented singles nights in the premium club area after games, and had one of the most exciting "street teams" in the entire league. The entertainment atmosphere with white-out promotions in South Beach fashion, where combined with the strategic initiatives to place some of the most famous celebrities in all of the world courtside for every game. Everyone knows about LA and Jack Nicholson, but South Beach started to develop its own unique atmosphere as well.
Now that the strategic plan to focus on creating an atmosphere that could compete with other South Beach entertainment options was in place, the Miami Heat analyzed its business operations and sales practices as well. Not only did the Miami Heat make an aggressive push with its game entertainment, it also developed one of the most sophisticated sales divisions in all of the NBA. The Heat built one of the most expansive call centers in all of pro sports, developed sophisticated market research techniques, devoted considerable resources to database base operations, and contracted several third party consultants to establish its marketing & sales model. The sophistication of the marketing & sales process was much more advanced than what most professional sports team was were doing during this time. One of the key pieces to the sales plan was based on the fact that the South Florida region has over 6 million (Palm Beach to the Florida Keys) residents. With the dedicated resources, and focus on new market research techniques, the Miami Heat worked to build its qualified database with every potential buyer in the region. The Heat executives and third party consultants actually went through three CRM systems that were custom built for the Heat during my short time there.
So what do these strategic planning initiatives mean? Well first it means they had a plan, second their plan matched not only their vision, but matched up with the challenges and opportunities that the Miami Heat were presented with as a franchise in the South Florida market. I do not think it is vital to go into the details of a SWOT Analysis, but it is easy to see that one was performed during this time of the Heat's strategic planning process.
Now I am not claiming that the Heat's business plan is the sole reason why the Miami Heat has won two NBA championships since this time. Of course drafting Dwayne Wade, trading for Shaq, and signing LeBron James would account for that. With that being said, the Heat executives and owner Micky Arsion are strategic thinkers, and always have a well thought out plan. Finally, always remember, a well thought out strategic plan, effects an organization in the long run, not just the short term.
Next week we will go into strategic planning blog #4 with The University of Texas, at San Antonio (UTSA), and how a formally unknown Division I program is starting to make waves...