
For any baseball team, making the World Series is a pretty dependable way to boost revenue. But when the Boston Red Sox seemed a long fly ball from this goal, the team still had something else going for it other than slugger David Ortiz: big data analytics.
Ryan Scafidi, manager of financial planning and operations for the Red Sox, says, ‘Not only are we driving bigger profits, we are better able to monitor, manage and reduce operating costs.’
The Sox have implemented several cloud-based technologies from providers such as Host Analytics, MicroStrategy and Microsoft Dynamics to slice and dice data on ticket sales, as well as revenue from merchandise, food and parking. The tools also help the company reduce expenses, by pinpointing how many ticket takers, ushers and security personnel it will need for a particular game or game series, based on past experience.
The World Series champs access voluminous structured and unstructured game data on the weather, the opposing team, the day and time of the week and various pre-game promotions. Algorithms let then the team forecast how best to allocate resources based on expected fluctuations in demand.
When data points to ‘Dollar Beard Night’
One unexpected benefit of using cloud-based technology: marketing can go to work building innovative promotions designed to smooth out the ups and downs or drive ancillary sales from concessions—the software allows the team to measure these cross-channel effects. One example from last year, which got fans through the ticket gates, was Dollar Beard Night. Anyone who showed up at Fenway Park with a beard—real or fake—got in for a dollar to that night’s game against the Baltimore Orioles.
“We had a chunk of tickets that hadn’t been bought so we decided to offer them at a buck apiece and then measure the revenue this generated for the concessions,” says Ryan Scafidi, manager of financial planning and operations. “We had another promotion—Kids Eat Free—where we measured ticket sales revenue. We then make this data comparable to other data we’ve amassed and crunch it into insight.”
Recovering from a frustrating season
In this regard, the Red Sox are as sharp in the back office as they are on the field. Nathaniel Rowe, research analyst, enterprise data management, at Aberdeen Group, says there is significant economic value in what the club is doing, data-wise. “Top-performing companies are leveraging data to embrace new ideas, seize opportunities quickly and solve pain points,” Rowe explains. “Data is the new oil, and it reflects how valuable information is to a business in this day and age.”
By divining ways to better understand customer behaviors, preferences and sentiments, organizations are able to glean what they like and dislike, he adds. “When customers are happy, they come back,” Rowe says.
They certainly came back to Fenway Park last season, although early on there were plenty of empty seats. The prior season, the Red Sox were mired in a mess chalked up to former manager Bobby Valentine, who generated more than his share of fan frustration for the team’s poor performance and some questionable decisions. “The bad publicity didn’t help us as the season began,” Scafidi acknowledges. “Our renewal season tickets were down, making it all the more important that we leveraged the data metrics to drive profitable business growth.”
Creating digital fan profiles
That’s all in the past now, he says. “We’re already capturing and analyzing financial, marketing and demographic data from this past season to make projections on what 2014 will look like,” he says. “Obviously, after winning the Series, we’re taking orders by the minute, but we’re still `pounding the streets’ with the knowledge of who our target audience is to offer the appropriate packages to them.”
Among the insights gleaned from last season’s data is a digital profile of fans who prefer games on the weekend or day games versus those who prefer afternoon or evening, how people get to the ballpark when specific teams are visiting, and the games at which families are more likely to attend.
As for the return on the investment in the technology tools, Scafidi says the, “The benefits far exceed the investment. Not only are we driving bigger profits, we are better able to monitor, manage and reduce operating costs.”
While he won’t divulge how much money the team has saved or earned as a result, the Sox are confident about where they’re headed. In other words, don’t shave the beard