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.
Marketing Optimization
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.
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