Goal! How Adidas Scored $2 Billion by Serving Their World Cup Clientele
Blog Post › Innovation that Creates New Value
Every four years, the world’s largest sporting audience turns their attention to another World Cup. And, with every tournament comes a new, official ball.
Adidas — who has produced every official match ball since 1970 — caused a fervor in 2010 when they introduced a ball that was revolutionary in design, but was condemned by players and critics for its erratic movement through the air; a bi-product of its irregular stitch pattern, which significantly affected the ball’s trajectory when in motion.
According to a CNN report, Italian goalkeeper Gianluigi Buffon called the Jabulani (Adidas’ official name for the ball used at the South African World Cup) a “ridiculous kiddie’s bouncing ball.”
Adidas had two choices: rebrand and repackage the Jabulani for the 2014 World Cup, which would incur a minimal cost outside of production, or invest significant resources to improve the product, thereby protecting their most valuable asset: their brand reputation.
Intent on customer satisfaction, Adidas selected the latter and listened to their clientele — in this case, 600 of the world’s top players, among 30 teams in 10 countries over two-and-a-half years1— and went back to the drawing board.
By investing significant time and resources, including time inside NASA’s Ames Fluid Mechanics Laboratory to conduct wind tunnel testing, the German-based company redesigned the ball from stitch-to-stitch.
In an interview with the BBC, Adidas football director Matthias Mecking says the company has done “extensive analysis and the results have shown consistent and predictable flight paths with hardly any deviation.”
And the customers are satisfied too. English forward Wayne Rooney, one of the biggest names in the sport, was a fierce critic of the Jabulani. According to the Daily Mail, Rooney is a “big fan” and gave the new ball a “thumbs-up” while testing it during training camp in May.
The payoff? Approximately $2 billion in projected World Cup related sales, according to FOX Business, fueled by the Brazuca — Adidas’ name for the current ball — of which they expect to sell 14 million copies.
“The Brazuca is selling right now for $160 to $170. And Adidas can’t get them out fast enough,” says John Eric Goff, a physicist at Lynchburg College in Virginia, in an interview with NPR.
By elevating customer satisfaction, and investing in their marketing effort to get the word out regarding their improved product, the company has seen dramatic returns. For those of us at Insigniam, this comes as no surprise, given the dramatic results witnessed by a client — a Quebec-based airline — who recouped the cost of investing in customer satisfaction and loyalty to the tune of an estimated $350 million in revenues.
Whether it’s sporting goods used on a world stage, or an airline that transports customers around the world, the ability of a company to drastically boost profits by strategically investing in areas customers deem most necessary is a powerful and effective way to catalyze results.