Company: XanGo, LLC
Contact: John Digles, XanGo's Chief Marketing Officer
Location: Lehi, Utah
Industry: Consumer packaged goods, B2C
Annual revenue: $1,000,000,000
Number of employees: 700
Quick Read:
XanGo, LLC prides itself as a company of firsts. Founded in 2002, it was the first to market a beverage containing mangosteen, a Southeast-Asian fruit that contains xanthones, which purportedly aid cartilage and joint function, maintain intestinal health, and boost the immune system.
In November 2006, it also became the first to land a jersey-front Major League Soccer sponsorship, a landmark deal that is changing the face of professional sports in the US.
But alongside the many opportunities lay inherent risks: It was the first US sports sponsorship of its kind, and there was no model or promotional framework to follow—nor any guarantee that the American public would welcome such advertising.
With the help of sports-sponsorship specialist Amplify Sports and Entertainment, XanGo rose above those challenges, and in the process succeeded in increasing sales and brand recognition, doubling its distribution and securing a reputation as a company of firsts.
Challenge:
Soccer appeared to be a natural fit for XanGo, a global multi-level-marketing organization that places a strong focus on health and family. "Organically, we love the game," said XanGo Chief Marketing Officer John Digles. "We're an international company, and many of our people attend games worldwide."
The timing, too, seemed right. Ghana's Freddy Adu was about to be traded to Real Salt Lake (XanGo's home team), and David Beckham was getting ready to sign with the LA Galaxy. "We took a gamble that soccer would grow in the US, and we wanted to be an active participant in that growth," said Digles.
XanGo had three main goals when it set out to publicize the first US sports sponsorship of its kind:
- Increase brand awareness (XanGo products had hit the market only four years prior).
- Expand its distributor base (the company primarily generates sales through a multi-layer, multi-level marketing structure).
- Gain public approval (although jersey-front logos were common in Europe and abroad, it was a level of sponsorship not previously seen in American sports outside of NASCAR).
"We understood the potential for backlash," recalled Digles. "We wanted to make a clear message that, yes, we are the first to do this [in the United States], but this is a long-running soccer tradition."
With this in mind, XanGo was further determined to show that it was a strong partner to Real Salt Lake and a true supporter of the game—not simply an advertiser in pursuit of only its own agenda.
Campaign:
Digles called on Amplify Sports and Entertainment, LLC, a New York City-based sports marketing and sponsorship firm, to assist with the Real Salt Lake sponsorship deal. The strategic marketing and PR campaign that Amplify developed would come to include the following:
- Special coverage on ESPN2: In early 2007, Real Salt Lake owner Dave Checketts appeared on ESPN2's "Cold Pizza" morning show to promote the groundbreaking partnership between XanGo and his team to an audience of 89 million homes.
- XanGoSoccer.com: XanGo helped kick off the MLS season in April 2007 with a new Web site designed to educate fans about soccer and simultaneously strengthen the company's affiliation to both Real Salt Lake and the sport in general. The site included information on the rules and history of the game, a regularly updated blog, and links to purchase tickets, jerseys, and XanGo Juice products, as well as additional links to the company Web site.
"As a sponsor, we wanted to be active in filling the stands with people who understood the game...This gave them a 'crash course' to learn all the rules so that they could actively participate and cheer, and it created more fans as a result," said Digles. - A company-sponsored practice field: In July 2007, XanGo dedicated a natural turf practice field built to Real Salt Lake specifications in the vacant space adjacent to its company headquarters. Described by Digles as a place for the team to stay "game ready," the field also serves visiting teams and the RSL Utah Under-17 and Under-16 youth leagues.
- The World's Largest Jersey: At the practice field dedication ceremony, XanGo announced its World's Largest Jersey promotion, wherein fans were invited to sign a 22x15-foot inflatable replica Real Salt Lake jersey that would be present at every home and away game, as well as community events, youth soccer tournaments, and XanGo distributor conventions.
XanGo pledged to donate $10 per signature, up to $2,000, to the National Ability Center (NAC). In the two months that followed, over 1,000 fans, distributors, and employees signed the jersey, and XanGo presented the check to NAC at the September 19, 2007 game against the LA Galaxy. The jersey continues to tour with the team and has become a "powerful visual, symbolic that XanGo is here in force," said Digles.
XanGo also began strategically scheduling its recruitment meetings to coincide with Real Salt Lake games and inviting potential distributors to attend the game, tailgate around the World's Largest Jersey, and "see the company in action," Digles said.
The company further made a point of involving and mobilizing its distributor base to help boost game attendance; some 3,000 distributors were expected to attend the July 2008 game in Chicago.
Bottom-Line Results:
XanGo's and Amplify's plan for pioneering and publicizing the first US soccer team sponsorship succeeded in generating significant recognition for the XanGo brand. It has also become a model for other companies following suit.
As of July 2008, sponsorship deals had been signed with nine more teams, including the LA Galaxy (Herbalife), Chicago Fire (Best Buy), DC United (Volkswagen), and (premiering next season) Seattle Sounders FC with Microsoft's Xbox 360 Live.
As the first, XanGo continues to receive incremental publicity with each new deal.
Thanks in large part to this campaign, XanGo exceeded its growth projections for 2007 by hitting $1 billion in cumulative sales—not bad for the company's fifth year in business—and it is on a similar growth track for 2008. The company has also doubled its sales force to 1,000,000 independent distributors since signing the deal in November 2006, and it reports that signups in 2008 are surpassing last year's totals.
"The jersey sponsorship was definitely part of that," said Digles. "It made a lot of people take a closer look at our business and was a significant brand and credibility factor for us."
Indeed, around 20% of new distributors identified the jersey sponsorship as a compelling factor in their choice to join the organization, and well over 70% of all distributors mention the sponsorship in their sales efforts.
Further results included $37,000 worth of additional media and non-media exposure due to the World's Largest Jersey campaign (which accounted for 15% of XanGo's media coverage during Real Salt Lake game broadcasts), as well as a noticeable lift in XanGo's Web traffic.
Lessons Learned:
- Create a healthy partnership: No doubt the sponsorship itself helped Real Salt Lake financially, but XanGo also went on to proactively bring in new fans, increase crowd turnout at games, and invest in the club's future with a professional turf practice field. These moves set a strong example for subsequent MLS sponsorship deals, positioned XanGo as a true partn
