Experiencing a major sporting event in person is a hard-to-describe experience for a fan. When your team is winning, a feeling of euphoria rolls through the stadium or arena. I have hugged and high-fived complete strangers when a game-winning shot goes in or someone scores a game-winning touchdown in the final seconds. On the other end, a loss brings a communal sense of disappointment – and sometimes tears.
The in-stadium experience is what brings many fans through the turnstiles time and time again. They come in droves wearing jerseys of their favorite player, braving the rain and cold to see their beloved teams play. This isn’t anything new to sports teams. But how they are using analytics to increase revenue from the fanatics is new...and exciting.
At the MIT Sloan Sports Analytics Conference last week, noted author Tom Davenport published a SAS-sponsored research paper outlining how teams and leagues are embracing analytics. In it, he outlines five “frontier approaches” that those teams and leagues are using to increase fan loyalty – and increase revenue:
- Variable ticket pricing
- Personalized web content
- Season ticketholder segmentation
- Social media analytics
- Marketing optimization
Variable Ticket Pricing
Airlines and rental cars companies have been using variable ticket pricing for years. Certain seats and vehicles have more value to some travelers than others. Sports teams are benefitting from a similar model. Davenport references a recent report that says “26 of 30 Major League Baseball teams are using some sort of ticket pricing analytics for more flexible pricing.” It’s not just better seats or nights and weekends. The analytics behind this is how much more fans will pay to see a game against a marquee opponent compared to a cellar-dweller.
Personalized Web Content
When fans aren’t watching a game in person or on TV, they’re often reading about the team online. Personalized web content is an area where teams and leagues can connect to their fans – and create cross-sell and up-sell opportunities. “The goal is to not treat all fans as if they were alike, and to develop increasingly targeted approaches to marketing based on a fan’s history and past purchases,” Davenport says. Imagine seeing your favorite player’s jersey pop up for purchase or deals on game tickets for the days that you have been in the past. Makes it easy to click “buy,” doesn’t it?
Season Ticketholder Segmentation
Speaking of tickets, season tickets are critical for teams each year. With thousands of seats that must be filled for each game, knowing that the most expensive and desirable seats are sold sure does make marketing and planning easier. Teams like the Orlando Magic are using season ticketholder segmentation to both identify which ticket holders are likely to renew as well as those likely to lapse. Davenport also looks at one of the most successful NFL franchises, the New England Patriots, which are incorporating marketing analytics into the mix by exploring “which channels in what sequence are best to communicate with season ticketholders.” The results speak for themselves – a 97 percent renewal rate!
Social media analytics
Teams and leagues learn what their fans really think about teams, players, trades and the in-stadium experience with social media analytics - not just listening, but by accurately discerning tone and sentiment. Here’s a great example: The Phoenix Suns currently sit in seventh place in the NBA’s Western Conference. This proud franchise has missed the playoffs for three seasons, so its fan base is especially excited this year. After a recent win over the Atlanta Hawks, the Suns’ Facebook page included positive comments about the team, coach and players:
While it’s normal for fans to be excited after a win, social media analytics takes words, phrases and conversations from a variety of online channels to deliver deeper, more holistic insights into what’s being said about a team or league. A team might not lower prices based on one comment, but if there is a negative trend about ticket or concession prices, having that information will help executives make an informed decision about how to proceed. Davenport’s take? Teams aren’t yet utilizing automated analytics of social media content, but this is a frontier practice likely to grow substantially over time.
Many businesses derive great value from using marketing optimization - especially if their segmentation is complex or customers are active across multiple channels. Sports teams have not yet embraced optimization, so it remains a high-impact growth area precisely because their business models have become more complex. One potential impact is on game-day promotions and ticket sales. For example, understanding which profile of customer is likely to respond to a promotion of bobbleheads versus food & beverage discounts could be a very effective way to maximize the lift in same-day ticket sales and fill more empty seats and increase merchandise receipts. According to Davenport’s research, the Cleveland Indians are one team that use marketing mix models to dig deep into how they should optimize their marketing programs and budgets. Somewhere, there’s a Nick Swisher bobblehead doll nodding in approval.
The MIT Sloan Sports Analytics Conference last week highlighted areas in every major sport where analytics are making an impact on the field and in front offices. Tom Davenport’s paper not only outlines where it’s happening today, he also paints a positive picture for the future. And while professional sports teams and leagues still use the eyeball test – what you see is what you get – to make decisions, putting data and analytics to work will open up a world of additional possibilities and outcomes.
Just imagine what it could do for your business - let us show you how. Give us a call or drop us a line. And thank you for following!
I have a challenge for you - guess which of these three email offers below are what I consider "sloppy marketing." Base your decision on these demographics- the recipient is a 50-year old married male with two kids at home, has stable employment, is a homeowner with a good credit rating, active in social media, and is an active volunteer in the community (Boy Scouts, PTA, etc.).If you answered all three - you're correct! And I shared all 3 of them with friends on Facebook and Twitter with appropriately sarcastic commentary. I really have nothing against the providers of these three services, but they were delivered to the wrong person for whom no time is the right time.
In the case of offers #1 and #2, I just couldn't imagine how they might consider me a target for those services unless they did no targeting at all. I suspect the latter, which to me is inexcusably sloppy marketing.
In the case of offer #3, I applaud the marketer's ability to discern my impending 50th birthday, but there's a big chance that someone facing that milestone might not embrace their upcoming status as being 50+. Even if I were not happily married and if I were interested in meeting 50+ singles, seeing "seniorpeoplemeet.com" in my inbox is just not something I welcome.
There really is no excuse for sloppy marketing. It's wasteful and potentially damaging because your customers will laugh at you and share their bad experience with your brand and it ripples outward from there. Do you really want potential new customers to roll their eyes when they see one of your offers? Of course not.
The way to avoid that is to use the data we have and make informed decisions with marketing analytics. The data is available and we have the means to be better at marketing in ways that include answering good questions such as these:
- Which offer types resonate with our different customer segments? What offers should come next?
- How are our marketing initiatives performing today? How about in the long run? What can we do to improve our iniatives?
- How do our marketing activities compare with our competitors’? Are they using channels that we aren’t using?
- Are our marketing resources properly allocated? Are we devoting time and money to the right channels? How should we prioritize our investments for next year?
For more details, watch this video of noted thought leader and best-selling business author Tom Davenport being interviewed by HBR's Angelia Herrin. It's called Marketing Analytics and the Big Data Advantage. It's longish, but moves quickly and is worth watching.
As always, thank you for following and let me know what you think!
It's easy to see how a newcomer to "Retail's BIG Show" could be a bit overwhelmed. The booths are big, attendance is booming and there are "hot and new" solutions everywhere you turn. But as I've walked the halls and looked at what's being promoted, I've noticed a few trends that matter for marketers in any industry.
1. Omni-channel is everywhere!
This event is all about connecting with customers, wherever they are and however they buy. The schedule sign outside the room where SAS' Big !deas sessions will be held shows four of six presentations will cover the topics of omni-channel, multi-channel or cross-channel. The message is loud and clear – it's up to retailers to provide consumers with multiple purchasing and engagement options: online, in stores, on the phone and mobile. And “omni-channel” means that it’s increasingly more than one channel simultaneously. Retail might be leading the way on this, but many other industries could benefit from improving their relationships with customers by making it easier to research, buy and interact with them.
2. Mobile is here to stay.
This shouldn't be news to anyone, but it's obvious walking around the halls of the Javits Center. Lori Shafer and former NRF chairman Bernie Brennan discussed this very topic in the EXPO hall. But there are lots of exhibitors here sharing their solutions, too. Everything from in-store point-of-sale transactions to online product catalogs, so mobile is certainly a hot topic this week.
3. Size doesn't matter?
Looking at conference-goers' badges is always a fun game at these types of events, as in "Hey, buddy. My eyes are up here!" I've seen lots of company names from retail outlets at my local mall and nearby shopping centers. But I've also seen a lot of smaller and not-well-known company names. It goes to show that the technology on display this week has applications for the Fortune 500 as well as SMBs. Don't we all want to optimize revenue? Or predict future inventory levels? Or know the best promotional price for a product? I love seeing so many companies embracing technology to work smarter and know how to connect with their customers.
Do you think there are lessons here for other industries? Please share a comment and let me know where you can see another application. I've got some more walking around to do, but I'll keep my eyes open for some more trends.
Tweet it to read it
If you want to share any insights you've had at #nrf13, tweet it using the show hashtag and @SASretail. Then, stop by the SAS booth to get a complementary copy of Tom Davenport's latest book, Enterprise Analytics: Optimize Performance, Process, and Decisions Through Big Data. It can help you implement large-scale analytics faster, avoid serious missteps and capture far more value.