Persuading Customers to Spread the Word

Few companies have succeeded in building their names and logos into fashion statements. Because the Cowboys, along with the Yankees, Lakers, Detroit Red Wings, and Notre Dame, are consistently among the most popular teams as measured by the sale of licensed apparel, they have succeeded in doing just that. Because they have, the Cowboys have created an incredibly unique and lucrative brand building opportunity through which everybody wearing Cowboys merchandise is essentially paying Jones for the opportunity to market his team.

As long as a company has the necessary marketing acumen and the resources to support it, it can take advantage of merchandising its name, provided it is committed to exercising control over everything that has its brand name attached to it.

Jones realized the value of managing his own merchandise operation. He took advantage of a provision in the NFL's new 10-year, $250 million apparel deal with Reebok by removing the Cowboys from the NFL's leaguewide merchandise deal. The Cowboys were the only team choosing to design and market their own merchandise. According to Jones, the decision boiled down to the issue of expertise. Jones thinks he can market and sell the Dallas Cowboys better than anyone else and is a staunch believer that the Cowboys can promote the apparel, and the apparel can promote the team.

This philosophy was on full display in July 2002 when the Cowboys announced that the J. C. Penney Co. would become the team's official apparel retailer throughout Texas, as well as New Mexico, Louisiana, Arkansas, and Oklahoma. Historically, this five-state region has accounted for more than half of the team's apparel sales in the United States.

However, this vision and strategy regarding the sale of merchandise was not new to Jones; in fact his perspective on marketing merchandise dates back nearly a decade.

In 1994, Jones worked hard to convince the league to allow him to debut a double star jersey for the traditional Thanksgiving game. Thanks to the approval and hard-core sales push, the Cowboys sold more than 130,000 of the jerseys in a single week. Today, such specialty commemorative jerseys are commonplace, and generate significant incremental revenue.

Creating additional, and sometimes subtle, opportunities to make contact with an organization's customers by offering them something unique and of value can help drive sales.

In the 1960s, former New York Jets owner Leon Hess wanted to devise a way to thank the customers of his east coast gas station chain. After establishing a relationship with a toy manufacturer, Hess started selling miniature Hess trucks at his stations. Over the years, additional products, such as Hess fire engines, buses, and vans, were offered. By 2001, a Hess helicopter, motorcycle, and cruiser were available.

Although Hess intended to use the toys as vehicles to brand the company, he also restricted output, which resulted in the products becoming valuable collectibles. In fact, several hundred Hess vehicles are typically up for bid at any given time on eBay and some pieces from 1964 have sold for more than $2,000. Dealers have even emerged who sell replacement Hess toy truck parts.

It's great advertising that reminds customers not only to come back every year to buy the latest model, but also to make it their service station of choice on a year-round basis.

Jones also undertook a transportation-related marketing and branding program. Toward the end of the 2001 season, the Cowboys announced that they would create a specialty license plate bearing the Cowboys blue star. Although regional universities had previously undertaken the same initiative, the Cowboys program had a twist $25 of the additional license registration fee of $35 would be given back to the city of Irving, where the Cowboys play. The proceeds could then be used to either fund stadium renovation or construction.

This quasi-merchandising program provides the Cowboys with two great benefits: It subtly markets the team statewide, and provides a facilities improvement fund that is dedicated to enhancing the fan experience.

Hess and Jones have tactically utilized the creation and sale of merchandise to extend their brands, building additional awareness while increasing revenue.