This week, a subject close to my heart: the Samsung sponsorship of Chelsea Football Club. This week the Korean chaebol announced it had announced an extension to its 8-year association with the European Champions, meaning that by 2015 it will have been the club’s main sponsor for ten years, the longest-serving shirt partner in the FA Premier League.
I should obviously declare an interest at this point. I worked very closely with Samsung in my time at Chelsea and worked with Peter Kenyon to extend the initial deal from 2010 to 2015. I am biased but I think it’s a great partnership that has worked brilliantly for both parties and I’d like to explain why.
When the first deal was done in 2005, Samsung and Chelsea were in a very similar place. Chelsea had just been bought by Roman Abramovich and were about to embark on the most exciting time in their history. Samsung had recovered from the Asian economic downturn in the 1990s and had made some very tough decisions: they wanted to transform their business by shifting emphasis from their traditional strengths in B2B engineering to become a global player in the consumer electronics market.
Aside from the obvious “blue” links, both parties had global ambitions and wanted to innovate. Chelsea’s previous shirt partner had been Emirates – itself a premium global brand, but with a very narrow consumer focus. Chelsea wanted to work with a brand with a worldwide B2C audience. Samsung had put sponsorship at the forefront of its growth strategy and had become a sponsor of the 2000 Sydney Olympics. The relationship with the IOC continues to this day but Chelsea provided a week-in, week-out platform for Samsung to address its major strategic objectives.
Those objectives were to accelerate brand awareness in key markets and to shift the perception of the brand from being a “me too” manufacturer to being a world-class, premium consumer electronics brand. Whatever your thoughts of Chelsea may be, the immediate on-field success of the early Abramovich years with the all its big names, allied to Chelsea’s historical location as a fashionable and wealthy London district transferred effectively to Samsung.
Within three years, Samsung had achieved a 30% market share in the Western European flat screen market, destroying the long-held positions of traditional manufacturers. Albeit aided by the transition from SD to HD and from CRT to flat screen technology, to put this into context, the European CE market was then growing at a rate of 5% per annum. By the time Sony launched its Bravia TV, 75% of its components were provided by Samsung. It’s a phenomenal corporate success story and whilst Samsung’s corporate growth plans, marketing and the quality of the products themselves were the main drivers, sponsorship played a significant role.
We always looked to be an active partner in the relationship. Working jointly on a five-year plan we set out working out how to achieve our respective objectives. Some of the ideas we came up with required rights not contained in the contract, but our view was that what was good for the sponsor was good for us. By the time I left Chelsea in 2011, Samsung had activated in more than 60 markets around the world. Given that outside of the UK, the club only has a small office in Singapore, it is reliant on its sponsors to help build relationships with fans and help convert them into customers.
The fan reaction was also positive. Those who see sponsorship as a necessary evil appreciated that Samsung were in it for the long-run and through their support of numerous grass roots and CSR initiatives they were seen to be interested in more than just the stardust. Samsung recognised the need to add value to what can be quite an emotive relationship and did so effectively both on matchday and more widely.
When Samsung renewed the relationship in 2010, it was the first time that Chelsea had ever extended a shirt sponsorship. The club had to prove to the market that it could deliver and the uplift in the financial terms were strong, especially given the economic climate and Chelsea’s position relative to other clubs.
The relationship with Chelsea helped transform the perception of Samsung, allowing it to shift its price points significantly upwards, adding margin to volume growth and contributing to its phenomenal success story. Likewise, Chelsea has enjoyed a long-term partnership with one of the world’s fastest-growing and best-known blue-chip brands which has been a key contributor to its own growth in the same period.
Sponsorship is about far more than sticking a logo on a jersey, taking the biggest cheque on offer and waiting until the deal is ready to be renewed before returning to the table. Of course the recently-announced Chevrolet deal with Manchester United has raised everyone’s expectations about what can be achieved from a financial perspective. From a pure marketing view I think that the Samsung – Chelsea relationship is a powerful case study of how sponsorship should work.
Follow Ben on Twitter @ben_wells1
