Author: Michael J. Diacin
Michael J. Diacin, Ph.D.
University of Indianapolis
1400 E. Hanna Ave.
Indianapolis, IN 46227
Michael J. Diacin is an Associate Professor in the Department of Kinesiology, Health, and Sport Sciences. His research interests include sport management education and curriculum.
The Coronavirus and Sport Management Pedagogy; Developing Student Learning Opportunities Based on Participatory Sport Businesses Impacted by the Pandemic
The presence of the Coronavirus and subsequent mandates to suspend operations has affected ownership, employees, and customers of community-based sport and recreation focused business. When operations resume, these businesses will aim to accomplish objectives of attracting new and repeat customers. These businesses will need to create messages in order to reassure consumers and create incentives in order to entice customers to return. The purpose of this essay is to articulate challenges community-based sport and recreation businesses will face when permission to resume operations is granted and propose tactics that could be utilized in order to rebuild the customer base. In addition, this pandemic provides an authentic learning opportunity for students in sport communication/management programs. As a result, suggestions for developing a learning opportunity for students based on community-based sport and recreation business affected by Coronavirus related shutdowns will be offered.
Keywords: sport, business, participatory, messaging, incentive, COVID-19, authentic learning
The Coronavirus pandemic has affected businesses around the world, including businesses that are part of the sports industry. Globally, the sports industry has been estimated to be worth approximately $600 billion. Within North America, the estimated value of the sports industry is $75 billion (3). Included in this industry is the participatory sport sector. This sector includes businesses that provide opportunities for people to engage in activities on a first-hand basis. Participatory sport businesses include commercial fitness centers, golf courses, family entertainment complexes, and a multitude of other operations that provide instruction and participation opportunities for children and adults.
The focus of this essay will be upon participatory sport businesses. Included in this essay is the impact of the virus on consumer spending. Government interventions and the resulting impact upon these businesses and employees will also be discussed. Challenges that participatory sport businesses will face when permission to resume operations is granted will be addressed. These challenges include customer readiness to return as well as occupancy and social distancing protocols that could impact revenue generation. Finally, student-learning opportunities based upon participatory sport businesses impacted by the pandemic will be articulated.
Participatory sport businesses are dependent upon consumer spending in order to sustain their operation. These businesses depend on consumers purchasing memberships, rental agreements of various durations, and/or paying fees on a per visit basis in order to access the programs and equipment offered by the business. Consumer spending is critical to these businesses in order to pay for expenses such as the compensation of the workforce (e.g., wages, health insurance) and operation expenses (e.g., utilities, maintenance, and advertising). Unfortunately, for these businesses, consumer spending has either reduced dramatically or stopped altogether.
Consumer spending reductions have in part occurred as a result of rules that have been established by local governments in order to restrict movement and slow the spread of the virus. “Stay at home” orders have been enacted in 42 states between mid-March and mid-April of 2020 (6). A limited number of businesses deemed “essential” have been permitted to remain open; however, participatory sport businesses have not been deemed as essential. As a result, they have been required to close or significantly alter their operations. For example, some golf courses have remained open; however, patrons have been prohibited from renting carts. Many other businesses have not been permitted to allow customers to enter the business altogether. These alterations have resulted in significant reductions to revenue, as customers have been either unable or unwilling to spend money at these businesses.
The pandemic has resulted in significant impacts upon business owners as well as their employees. Simply surviving the period of time during which operations have been suspended is a challenge to many small business owners because overhead costs still accumulate during a time when revenue is not generated. As a result, the furloughing of employees has occurred as businesses attempt to minimize operating costs. These actions to reduce the workforce and as a result, payroll costs, has affected managerial and non-managerial workers. Employees ranging from seasonal, part-time workers to full-time managerial employees have been furloughed. At businesses where employees have not been furloughed, pay reductions have occurred for those who have been able to remain (2). Overall, in excess of 40 million workers in the United States have lost their jobs because of the pandemic since mid-March 2020 (5).
A limited number of non-essential businesses in a few states have been permitted to reopen as early as the end of April 2020 and additional businesses will reopen as authorities in their respective states lift restrictions. Upon reopening these businesses will encounter numerous challenges. These businesses will be challenged to attract new and reaffirm existing customers, many of whom might be hesitant to patronize the business. For those who do return, the business will face significant challenges with regard to protecting customer health. In addition, the business will be limited with regard to occupancy. These occupancy limitations, which will be necessary to ensure social distancing, will serve as a limitation to revenue generation at a time when revenue generation has been severely hampered.
Some businesses might be able to resume their operations and see many of their existing customers return as well as see an influx of new customers. Conversely, it is also possible that many other businesses will encounter difficulty with regard to getting customers to reengage. These customers might perceive an unnecessary risk and will abstain from patronizing the business. Therefore, an initial challenge for participatory sport businesses is to get patrons, especially those who might feel hesitant, to return to the business.
The challenge to get patrons to return and hesitancy with returning could be influenced by demographics associated with the customer base that supports the business. Some businesses, such as commercial fitness centers, have a customer base of adults who independently decide to patronize the business. Some businesses are largely supported by youth participants whose parents make decisions on their behalf. Businesses that typically have a predominately youth customer base could include dance studios, as well as businesses providing instruction in gymnastics and cheerleading. In addition, some participatory sport businesses offer a variety of team activities and/or individual activities. These businesses have clientele from both youth and adult demographics. Tennis clubs, bowling centers, and golf courses provide instruction as well as individual and team competition opportunities to both youth and adult participants. Many other businesses provide instruction and participation opportunities in basketball, baseball, soccer, and martial arts for customers of all ages.
In addition to the challenge of getting customers to patronize the business, an additional challenge will be to keep them safe once they have entered the business. It could be anticipated that customers would have concerns with regard to whether or not the business is safe to enter because Covid-19 is easily transmissible from person to person. Furthermore, the virus can survive on surfaces, ranging from several hours to several days (1). Pieces of equipment, building fixtures, and commonly accessed public areas all present potential hazards to one’s health. Although essential, the patrons who pass through the doors serve as potential threats. Therefore, personnel would be challenged to neutralize the hazards that will develop because of customers’ presence at the business. Appropriate precautions, such as common-sense best practices of thorough and frequent cleaning to public areas (e.g., locker rooms, restrooms), frequently touched fixtures within those areas, and equipment would be essential in order to provide patrons with the safest environment possible.
In addition to enhanced cleaning procedures, an additional challenge would include the implementation of occupancy limits in order to accomplish social distancing protocols. Although necessary, achieving profitability while complying with new restrictions such as operating with occupancy restrictions would also be a significant challenge. Methods of regulating occupancy could differ based on the nature of the operation. Some participatory sport businesses have a large percentage of customer traffic that utilizes the business on a walk-in basis, such as a commercial fitness center. A business of this nature could encounter peak visitation periods; therefore, it would need to implement systems in order to limit the quantities of patrons inside the facility. Within some participatory sport businesses, controlling the influx of traffic would be easier within operations that utilize appointments. A facility that offers lessons by appointment would have a greater amount of control over customer ingress.
Despite the potential negative impacts on revenue, occupancy limits would better allow for social distancing to occur. Social distancing entails patrons keeping the recommended six feet of distance from one another. Locker rooms, cafes, areas where fitness equipment is present and open rooms for activities such as yoga would need to be managed. It would be difficult to rely entirely on patrons to comply; therefore, an additional challenge for business personnel would be to enforce social distancing protocols or adjust the operation when social distancing is not likely. For example, participation in a “socially distant” game of basketball does not seem particularly feasible. As a result, the businesses might need to suspend activities where social distancing would be unlikely.
Although the impact of the Coronavirus has been extremely detrimental to many businesses, it can provide an excellent platform for valuable learning opportunities. In this case, students could take on the role of a participatory sport business owner or managerial member who would be faced with tremendous challenges to rebuild the business. Students could engage in a project in which an actual participatory sport business near the university would serve as the platform upon which the project is based. If possible, added realism could be accomplished if students were charged with actually connecting with and assisting the business owner and/or management and developing the project with that specific business.
Numerous benefits could be achieved as a result of engagement in a project of this nature. Students would be challenged to think critically about ways to attract and reaffirm customers. Operating in ways that would adhere to occupancy limits and achieve social distancing protocols would require careful consideration and planning and would further challenge students to employ creativity, resourcefulness, and critical thinking. Since many businesses could face financial hardship because of not operating for several weeks, students would be challenged to implement numerous tactics to rebuild the business while being mindful of limited financial resources. In addition, students would be able to engage in the tasks of message creation and dissemination as well as incentive creation in order to reassure customers and entice them to return.
The following paragraphs outline components that could be integrated into a project focused upon a local participatory sport business. Within this sector, many nuances exist from business to business. These nuances include activities that take place at the facility, ancillary services that are offered, the demographics of the customer base, and other variables. Therefore, this content is intended to serve as a general guide. The content could then be tailored to the specific business.
Ideally, students would be working with an actual business and collaborate with business personnel. Prior to the students’ engagement in the project, the faculty member should first consult with business personnel in order to learn of their needs and suggest the ways in which the students could assist. The needs of the business could be communicated to students by business personnel, perhaps through a guest speaking appearance, or by the faculty member.
With regard to oversight and guidance, both the faculty member and business personnel could participate in giving guidance/answering student questions throughout the process. At some point, an initial review of student generated content would take place. The faculty member could provide the initial review of ideas before they are presented to the business personnel. The main purpose of this review is to provide initial feedback to the students and suggest clarification of ideas if necessary. Once the faculty member provides the initial authorization to move forward with ideas, the students would then present them to business personnel. Both the faculty member and business personnel would participate in the evaluation of the students’ ideas. Some “back and forth” between the students and the business would be encouraged in order to modify ideas that would best serve the business. If the work is being done with an actual business, the personnel at the business would ultimately decide on whether or not to approve and subsequently move forward with the students’ ideas.
A key aspect of this learning opportunity would be connected to objectives. Two categories of objectives are output and impact objectives (7). Output objectives focus on quantities, such as a number of mentions made by mass media outlets or “likes” to content posted within a social media platform. In addition, a number of visits to the web site of the business could be considered an output objective. Although awareness of and interaction with content generated by the business is desirable, it must be followed by consumer behavior that is desired by the business. Therefore, impact objectives would also be established. For example, the behavior of customers acting upon the content they consumed in the form of actually patronizing the business would be a critical impact objective. Given the extended period of reduced customer traffic or no customer traffic at all, the accomplishment of impact objectives pertaining to customer traffic would be most critical to the business. A measurable aspect of the impact objective could be a target number with regard to customer traffic at the business. This activity could be tracked, therefore allowing the business personnel to know if the target housed within the objective was reached.
Ultimately, the objective the business aims to accomplish is to have customers return to the facility and engage in the various offerings that are available at the business. Both output and impact objectives would be supplemented by measurable targets. In order to achieve the measurable targets housed within the overarching objectives, business personnel would need to engage in various tactics. Tactics are actions taken in order to achieve a desired outcome (7). With regard to this learning opportunity, students would be responsible for proposing tactics that business personnel would engage in order to achieve the stated objectives. For example, they could engage in the tactics of creating content for social media platforms, web sites, and advertisements that could be aired on local television stations, radio stations, and/or newspapers. Students could create content and propose methods to disseminate the content in order to achieve various output objectives in the realm of customer engagement as well as impact objectives in the realm of customer behavior. Next, the students would propose tactics that could help the business meet their desired targets. Students would need to argue for reasonableness and feasibility of their ideas and would also be challenged to think critically with regard to ideas that would not only be helpful for the business, but also would be realistic to accomplish.
A specific tactic in which students could engage is the tactic of creating messages. Messages could be developed to not only communicate key pieces of information to their publics, but also achieve desired behaviors from their publics. The content of the messages embedded within social media pages, web sites, and other outlets would be critical to generating awareness, educating, and informing. Communicating new rules and regulations, such as social distancing protocols, would be examples of message content designed to educate and inform. Messages could also impact attitudes and influence behaviors. The business would be challenged to overcome customer safety concerns; therefore, messages that convey the importance of customer safety and the steps taken to protect it would be critical.
With regard to the student learning opportunity, the students could attempt to create the messages they believe would be effective in not only educating and informing the customers but also impacting their attitudes and influencing their behaviors. There would be a challenge to assure patrons who are now more cognizant of viruses that every precaution is being taken on their behalf and that it is safe to visit the business. The wording within messages that would effectively convey the importance of safety protocols to the customers would be critical to gaining their patronage. Within participatory sport settings, the reader of such messages would be adults choosing to patronize the business by their own choosing or adults who would be making the decision to patronize on behalf of their children. Therefore, the messages related to customer reassurance must first recognize the hesitation readers would have with regard to putting themselves or their children in a potentially dangerous situation and then explain actions that would be taken in order to provide a safe environment.
After messages have been created and disseminated through various outlets, data would need to be collected from customers who responded to the messages in the form of patronizing the business. The process of collecting this data from customers who commit to a membership would be fairly easy to accomplish because they are providing contact information as a part of their membership and could be asked to agree to be contacted by staff as a condition of the membership. For businesses that accept walk-in traffic instead of members, acquisition of customer data could be collected as part of a signed liability waiver. The customer would be requested to provide contact information and agree to be contacted as part of the terms and conditions established by the business.
It could be a challenge to acquire customer contact information in settings where neither memberships nor liability waivers are utilized. For example, patrons who visit a bowling alley on a walk-in basis are not asked to submit a liability waiver as a condition of participation. The business personnel could request contact information to be given on a voluntary basis in order to gain insight regarding the customers’ decisions to patronize the business. This information could be collected at the time when customers arrive and make first contact with an employee. This arrangement would require efforts to be made on the part of the personnel to collect the needed information and would also be dependent upon the customer choosing to cooperate.
With regard to how patrons would be contacted, several contact methods could be employed. Personal contact with customers, whether it be via email, social media platforms, or telephone could occur. A brief survey could be distributed to customers if done via email or survey questions could be asked over the phone. Platforms such as google survey allow for the creation of free surveys. With regard to the information that would be sought from the customers, questions would be asked that would pertain to the messages they received, the sources where the messages were received, and the influence of any of those messages upon their decisions to patronize the business.
Discovering which pieces of communication were engaged in by the customer would be critical. The channels through which the pieces of communication were sent, the messages embedded within those pieces of communication, and the messages that resonated with the customers and helped them feel comfortable with engaging or reengaging with the business would be important so that the business (as well as the students assisting in this project) would be able to measure the effectiveness of these efforts. At the start of this process, the business personnel would have communicated customer traffic targets that would need to be reached in order for these efforts to be defined a success. Once the targets were established, the creative work would be done with the goal of reaching those targets. Numerous messages would be sent through various channels in order to get the receiver of the messages to become a patron. Some messages would be created and channels utilized in order to attract customers who patronized the business before shutting down and some messages would be created and disseminated in order to attract people who did not have any previous association with the business. The data collected from both existing as well as new customers would be helpful in determining what messages and channels were most effective in reaching the customer traffic targets. If customer traffic targets were not reached, then students would be further challenged to create new messages and propose new dissemination channels to the business personnel in order to reach desired customer targets.
In addition to the process of messaging in order to reach customer traffic targets, a potentially beneficial but challenging tactic to attempt could include the offering of incentives. Incentives are items of perceived value that are added to an offer in order to encourage a behavioral response. In addition, incentives are offered to people or groups who are insufficiently motivated, indifferent, or resistant with respect to a proposed behavior (4). The offering of incentives could be beneficial in accomplishing the behavioral objective of attracting new patrons or getting prior patrons to return. In this situation, customers might be hesitant to patronize the business. Therefore, the business could offer the consumer an incentive that will change the action from staying away to patronizing the business.
A challenge associated with offering incentives is that they result in some cost to the business. Because of the extended closure, participatory sport businesses have not been generating revenue. As a result, it would be difficult to offer incentives immediately upon reopening. Since the practice of offering incentives during a time of financial weakness would be difficult to execute, students would be challenged to develop incentive arrangements in order to generate patronage without incurring a significant upfront cost to the business. A plan in which the incentive would be awarded after multiple visits or after the purchase of multiple units of a good or service could be considered. Similar to a “frequent shopper” arrangement where the incentive is awarded once certain conditions are met; an incentive plan like this could generate repeat customer traffic during a time when businesses might be challenged to get customers to return. An arrangement such as this could benefit the customer because it would result in a cost savings if the customer continues to patronize the business on a repeated basis. As with any incentive plan, the business would incur a cost in some form; however, a benefit of offering a “frequent shopper” incentive plan is that the incentive would not be offered at the beginning of the arrangement. Instead, it would be offered at a later time, which would allow the business some time to build revenue before providing the incentive.
In summation, the presence of the Coronavirus has resulted in unprecedented impacts upon society. Consumer spending has decreased significantly as a result of the closure of businesses deemed non-essential. In addition, the closure of these businesses has resulted in record levels of applications for unemployment assistance. Because sport and recreation focused businesses are not deemed essential, the pandemic has significantly affected owners of these businesses as well as their employees. Many participatory sport businesses operate with thin profit margins and have experienced major interruptions to their revenue streams. The financial losses that have resulted during the closure could result in some participatory sport businesses not resuming their operations after permission to reopen is granted. For those that attempt to reopen, they will be challenged to rebuild their customer base. If customers return, the occupancy limitations that would have to be adhered to in the foreseeable future would serve as a threat to profitability. As a result, these restrictions could result in limitations to incoming revenue and subsequently the permanent closure of these businesses.
The pandemic has resulted in many negative impacts upon participatory sport businesses; however, the situation provides an excellent learning opportunity for students in sport communication and sport management majors. The development of a plan to help businesses that are in a difficult situation would be an excellent opportunity to enhance students’ creativity, resourcefulness, and critical thinking abilities as they attempt to engineer solutions for a business that faces numerous challenges. The development of objectives, tactics, messages, and incentives would be worthwhile aspects for students to engage in as they might work in participatory sport businesses after graduation. Therefore, the opportunity to think about ways to rebuild businesses that have been so greatly affected by the pandemic and develop new operating procedures would be beneficial in their professional development.
Applications in Sport
This topic could be of interest to and findings of use to sport management faculty who teach in sport management or sport communication programs who are seeking a new learning opportunity for students in the areas of public relations and consumer incentives. The focus upon the Coronavirus pandemic provides an authentic platform for sport management and communication students who could be tasked with finding ways to restore a participatory sport business that has been greatly affected by extended closures.
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