Thursday 12 July 2012

Open Letter to Drew Brees (Lifetime Value vs ROI)




The New Orleans Saints  vs Drew Brees contract negotiation is a perfect metaphor for my frustration with marketing right now. This post is a rally call for marketers and brands to work on Lifetime Value instead of ROI.

The ROI limitation 
As Brees’ current $60M/6 yr contract ends, both sides are at an impasse because of a $6.25M overspend on the NEW contract.  Let’s look at the latest numbers reported by ESPN:
  • Brees demand:   $20.5M X 5 yrs  =  $102.5M
  • Saints offer: $19.25M X 5 yrs = $96.25M 

I’ve been here before, and I know right now that  no President, CEO, CFO, CMO would entertain a marketing plan to ‘overspend’  by 6%, (and if you were having a really bad day could trigger a request for  a 6% underspend!). So here’s an innovation for Brees....combine contracts, current ($60M)  + new ($102.5M) AND change the story:

Lifetime Value Rocks!
  1. Brees should reframe his discussion as LIFETIME VALUE, and use different language.  He MUST avoid referencing ‘current’ or ‘new’ contracts .  These contracts do not impact what he delivers to the Saints.  
  2. He needs to go in right now and TELL THE STORY that he’s only asking for $14.8M a year.  
  3. He should use these words in every statement “My lifetime playing and leadership value to the Saints is $162.5M over 11 years”. 
The lifetime value story is TRUE.  Marketers must be brave enough to tell this story about their strategies and plans. Those that do will be seen as leaders, and marketing will be rewarded as a respected growth driver for the business…..

Those that don’t, well you know who you are. Enjoy fighting with your ROI tools that still wont make the calculation work for you!



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