In Europe, soccer superclubs such as Real Madrid and Manchester United have created a virtuous circle of success. Vast revenues from sources such as broadcast fees (Exhibit 1) permit them to acquire top players who make winning more likely. Winning teams, in turn, enjoy higher revenues.

Top European clubs have, on average, budgets that are 20 times larger than the budget of a typical Swiss soccer club. The top clubs also have much bigger stadiums and, on average, seven times more spectators (Exhibit 2). As for the value of television rights, the gap between big and small countries is a factor of 20—and it is growing every year (Exhibit 3). How then do clubs in smaller markets such as Belgium, Portugal, Sweden, and Switzerland set in motion the virtuous circles of the superclubs?

The Swiss Premier League comprises 12 clubs, which have a total budget of about $50 million; the biggest club’s budget is $13 million, that of the smallest $1.6 million. A Swiss soccer club typically has four revenue streams: ticketing, merchandising and licensing, television rights, and sponsorship. The main costs are player salaries, the organization of games (including catering, security, and ticketing), out-of-town travel, and marketing. Transfers of players from one club to another can either make or lose money.

To break out of the rut, a team in a secondary market must follow the lead of bigger sports teams all over the world and become much more serious about marketing. One Swiss club has moved in this direction by introducing corporate packages and a customer loyalty program. The corporate package is a comprehensive "soccer match experience" sold to groups. It includes elements like transportation, food, drinks, and opportunities to meet players.

The customer loyalty program aims to get all customers to attend more games and to encourage people who hold season tickets to renew their subscriptions. Since information on season ticket holders is already available, the program focuses on gathering data about purchasers of individual tickets. At the end of each season, at a special ceremony, the president of the club will give footballs signed by the team to the fans who have attended the largest number of games.

To attract more spectators to the stadium, this soccer club has also used other tactics, including newspaper advertisements offering people who hold tickets to the upcoming game free entry to the next one if the team loses. In addition, the club has increased its points of sale and introduced new ticket categories, such as family tickets. Everyone who buys tickets in advance or enters the stadium at least an hour before a game starts gets a free hot dog. The stadium features new snack stands, and brief interviews with players are broadcast over the public-address system before, during, and after the game. Outside the stadium, spectators can paint themselves with the team colors at the club’s expense.

The improved marketing effort seems to be paying off. In a single season, the club’s revenues will rise by 20 percent, including a 400 percent increase in catering revenues. The cost of organizing a game has declined by 10 percent. Ticket sales before the day of the game have soared. Attendance is also on the way up: a match in April attracted 12,900 spectators, more than twice the average number of spectators at a Swiss soccer match.