Fighting for growth: growing the core of UFC
As a martial arts practitioner, I love watching the mixed martial arts (MMA) in UFC (Ultimate Fighting Championship). And I'm not alone, with 500 Million homes in 175 countries also tuning in, according to Fast Company.
MMA is a sport where two warriors fight in a cage for 3-5 rounds of 5mins each, until one of them is knocked out, taps out (surrenders) or win by points (like in boxing). The sport has been around for approximately 20 years. Fighters are usually specialists in one style, but also develop others like Brazilian Jiu-Jitsu, Muay Thai, Boxing or Wrestling.
The UFC brand was created in 1993 by a bunch of businessmen and martial artists. After not much success it was then bought by its current owners, Lorenzo Fertitta and Dana White, for u$s 2 million in the early 2000s. It has since grown into a $600million business. For perspective, that's bigger than Real Madrid or The New York Yankees!
So, what are the growth drivers behind this bloody successful brand? They are very much in line with our Grow the Core principles:
1) GET THE PRODUCT RIGHT
Immediately after buying the franchise, Fertitta and White began a process to rehabilitate UFC´s image by increasing safety measures (more rules during the fights) and working with states to lift bans on the sport.
They also borrowed inspiration and excitement from WWE (World Wrestling Entertainment). “WWE had mastered the ability to use televisión to suck people into a story line” Fertitta said. That means adding drama and real stories for each of the fighters.
2) DRIVE REACH for PENETRATION
UFC have focused on driving distribution, to increase the brand's reach. As Marshall Zelaznik, the UFC´s director of international development says “if you are selling a can of Coke, you want it in every shelf. In our world, every shelf means a free-to-air broadcaster.” The UFC market development model includes assessing regions that look promising in terms of where fighting is already being produced. Then, they start educating government and agencies about safety rules. After that, UFC makes deals with local broadcasters by providing free content.
3) PREMIUMIZATION
Their strategy is to use free-content to hook viewers, as done with the partnership with Fox. Then, when fans are educated, they are turned into paying viewers through charging to view top fights, playing on the storylines of star UFC fighters to fuel pay-per-view revenue. The result is a solid pay-per-view system, where a successful event can reach 700,000 buys at around $50 each.
4) CORE EXTENSION
By mid 2000´s, UFC developed “The Ultimate Fighter” reality-TV program, where a group of fighters lived together and fight in teams against each other…and for a contract. The program not only became a top rated show, but also helped increase awareness about the franchise.They kept renovating it, by smartly including top rival UFC fighters as trainers/mentors.
The future offers some tough challenges to UFC, like how to renew their current biggest stars and to stop slipping pay per view decline due to pirate live-streaming. But as Dana White says, “fighting is in our DNA”, so I´m sure they will keep fighting to keep the core growing.
In conclusion, the UFC story shows how the principles of growing the core can be applied to any business, whether it be a consumer product or a sporting franchise.
