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The trend of using analytics in sports to improve on-the-field performance is continuing to grow, but it's not stopping there. Taking a cue from coaches, managers and trainers, the front-office staffs of some teams are adopting analytics tools to help improve business operations, an application that they believe will provide big off-the-field wins.
For example, the New York Mets baseball team recently launched an initiative based on technology from SAS Institute Inc. to analyze fan data in order to optimize customer engagement efforts. The team is gathering fan data from its own merchandise website, other team and league sites, and social media channels in an effort to develop a deeper understanding of what fans care about and how to engage them more effectively.
Lou DePaoli, the Mets' chief revenue officer, said in an email interview that the team is still in the data collection stage of the project, so it's unclear how effective the initiative will be. But he hopes it will be possible to personalize marketing campaigns and stadium experiences for fans.
"Our primary goal is to better understand who our fans are on more of an individual level and factors that impact their overall satisfaction," DePaoli said. He added that the new analytics tools should allow him to drill down into fan profiles to better understand them and then to use profiles of existing fans to target marketing campaigns to other people who share similar characteristics but currently aren't buying game tickets or merchandise.
Business side slow to get into analytics game
Data analytics could present teams with a big business opportunity. There is a tradition of using analytics in sports to boost team performance on the field going back to at least the mid-1990s, which was touted by the book and movie Moneyball. But the data-driven approach has been slow to cross over to the business side.
Now, though, the total sports entertainment industry is generally estimated to be worth a collective $750 billion, and organizations are starting to see analytics as a way to help them claim their fair share -- or more -- of that money.
"Because of the prevalence of the smartphone and social media, the consumer is expecting personalization from all aspects of their entertainment," said Ben Shields, an MIT lecturer and co-author of The Sports Strategist: Developing Leaders for a High-Performance Industry. "The smart organization is saying, 'I see that's the expectation.' Executives have an obligation to use the data."
Shields said the traditional method of increasing ticket and merchandise sales and media rights fees was simply to put together a winning team. And while that approach still works and is obviously the preferred way, Shields said sports organizations can still operate as successful businesses even when their teams don't compete for titles. The Chicago Cubs baseball team is a good example: It sells out every home game and has legions of dedicated fans but rarely competes for a championship. The Cubs haven't won the World Series since 1908 and last played in it in 1945.
Multiple sports analytics business plays to call
There are a number of ways that adopting analytics can improve organizations' business performance. Shields said analyzing social media data and interacting with fans on social platforms helps teams hear and respond to the voice of the customer. Many teams are also implementing dynamic ticket pricing, which uses algorithms to adjust prices depending on how much demand there is for individual games. Organizations can also send out personalized messages, including stats updates to fans while they're at games, based on an understanding of their preferences derived from analyzing previously collected data on fans with similar profiles.
All of this can help an organization operate more profitably, but reorienting a business to focus more on data can be difficult, particularly when its employees have little experience basing business decisions on data. Shields said teams should start slow, perhaps using simple self-service business intelligence tools, and then consider more sophisticated BI and analytics software at a later stage.
And even with the opportunities and potential benefits for organizations to become more data-driven, Shields said teams should still leave room for executive intuition in the decision-making process. Unlike in some other industries, there are things in the sports business that can still be hard to quantify in an actionable way, like the effect of a player unexpectedly tweeting directly at a fan. That means front-office executives need flexibility to respond to some things on the fly when applying analytics in sports.
"[Analytics] is just another data point," Shields said. "We have complex problems to solve, and to get to where we need to be, it's going to be a combination of quantitative data and qualitative decision making."
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Join the discussion: Do you think sports analytics is just a trend or here to stay?