the financial times: march 16 2004
Raising the game:
Travelex has made a name by shunning corporate ads
and concentratingon arts and sports sponsorship. And
it's all down to a marketing department of one
Anthony Wagerman is a one-man corporate marketing machine. "You're looking at Travelex's marketing department," says the marketing director of the privately-owned foreign exchange specialist, best known for its airport outlets.
Wagerman is solely in charge of the day-to-day running of the group's branding, marketing and communication, although he is careful to add that final marketing decisions are made by Lloyd Dorfman, the founder and chairman.
"The secret of our success is that we have very short reporting lines. It's just Lloyd and me, which leads to very quick decision making, and has helped us getting last-minute deals," he says.
In line with the simplicity of the decision making structure, the group's marketing strategy is also uncomplicated in that it focuses principally on sponsorships, which are negotiated by the M&C Saatchi agency.
Travelex spent around oe5m last year, sponsoring the Toyota Formula One racing team, the Cricket World Cup coverage on Sky, the Travelex season of Pounds 10 tickets at the National Theatre, and the Rugby World Cup coverage on ITV. The sponsorship figures are far smaller than some of the deals involving large sporting events and famous athletes, but they have brought Travelex far greater exposure than it envisaged, says Wagerman.
Indeed, he says that the sponsorships have been very effective, delivering seven to eight times worth the money spent in terms of brand recognition and increase in the company's business. "It's relatively small beer in spend terms, but we have tremendous value for money."
Travelex was founded in 1976 by Dorfman, who opened his first bureau de change in Southampton Row, near the British Museum. Since then, the group gained access to UK airports, and has expanded into Australia, Asia and America. It bought Thomas Cook's financial services arm in 2001, and is valued at around oe1bn, making it one of the UK's largest privately-owned companies. Dorfman owns around two-thirds of the group, with venture capital com- pany 3i holding the remaining third.
"After we bought Thomas Cook, we decided to up our game," says
Wagerman, who joined Travelex in 2000. "We made some corporate ads
but quickly realised that these weren't working as well." The group's
first sponsorship came with the Australian cricket team, who were visiting
the UK on the 2001 Ashes tour. "We were the second most photographed
brand in the UK that summer, and we signed a five-year contract to sponsor
Australia's tours."
The oe2m deal sponsoring the Australian cricket team's overseas tours brought in more dividends than Travelex had initially hoped for, as cricket fans placed them alongside other sponsors such as Pepsi, which sponsors India, and Vodafone, which sponsors the England team. "You are identified with the company you keep. We don't have an enormous budget but we are punching above our weight," says Wagerman.
Being recognised as a global player in the business to business arena has become a priority for Travelex. Although most of us will recognise the brand from its airport currency exchanges, about 80 per cent of the group's business already comes from its business services, namely offering foreign exchange services for the big UK banks such as Barclays and Royal Bank of Scotland. To that end, gaining presence in international sporting events has been important. "People get the reassurance that you are a global player and big enough brand (for them to do business with.)"
The group also struck lucky by sponsoring the ITV Rugby World Cup coverage for a reported oe3m. Although it didn't sponsor the England team, it saw full benefits of the team's victory - the audience grew with each England win, and businesses and consumers thought they had in fact been team sponsors. "I had people writing to me asking for signed kit by Johnnie Wilkinson," says Wagerman, adding that the group's online retail business grew 10-fold after the World Cup.
"They're quite canny in choosing properties which are synonymous with what they do," says Matthew Osmon, director of sports sponsorship firm Redmandarin.
So what is the key to a successful sponsorship? Wagerman says that companies shouldn't be too emotional about it, adding that neither Dorfman nor he are sports fanatics. "It's not that we don't care, but we're not sentimental about it. I feel very sorry for marketing directors who have to follow up a decision made by a chairman who loves cricket or rugby. They have to come up with an intelligent explanation." Other factors include never being afraid of asking the basic questions such as "why not", "by when" and "how much". "We questioned everything. It also helped that we were novices, which almost allowed us to do so."
Wagerman says Travelex is on the verge of signing another arts sponsorship although he is not saying what it is. The key to effective arts sponsorship is to be innovative. Unlike some more conventional sponsorship of the arts by large companies, the oe1m three-year deal with the National Theatre to offer oe10 seats, has received considerable publicity.
The group, which has withdrawn from the Toyota F1 deal in order to focus on its north American business, is still looking for sponsorship ideas for the continent. "After we cancelled Toyota we got dozens of calls from US motor sports, but most of them were way off target. We need bold and unique ideas, but haven't found anything there yet."
©The Financial Times (London) 2004
