The National Basketball Association’s (NBA’s) Orlando Magic are helping to lead the sports industry into the age of advanced analytics software, team officials said.
Fresh off its recent move to the state-of-the-art Amway Center, a brand new arena in the heart of downtown Orlando, the Magic organization is currently engrossed in a comprehensive data warehousing and advanced analytics project designed to increase revenues by giving decision makers a better understanding of what makes fans tick.
The Magic have been using analytics software as the backbone of their dynamic ticket pricing program since the 2009-10 basketball season, said Anthony Perez, the team’s assistant director of business strategy. Dynamic ticket pricing aims to determine the true value of a ticket -- and price it accordingly -- based on several variables such as the day of the week, the difficulty of the matchup and recent team performance.
The team is now expanding the analytics program by implementing a data warehouse and using advanced techniques like predictive modeling, customer segmentation and near real-time decision making to address an even wider variety of business and marketing issues. Perez said the project will ultimately give the Magic “a better handle on what drives the renewal decision for season ticket holders and how we can drive more retail business -- those sorts of things.”
Advanced analytics project presents data warehousing challenges
The team is designing a new data warehouse to pull in a wide variety of information about ticket sales, operations, retail sales, sponsorships and fan demographics from both internal and external source systems. But getting outside vendors like Ticketmaster to accommodate the technological requirements of the Amway Center and the new data warehouse took some doing, Perez said.
The Magic initially experienced difficulty when trying to pull information from Ticketmaster Archtics, a software platform that allows sports organizations to manage ticket-related data while providing customer relationship management (CRM) features, marketing tools and reporting functionality. When the Magic attempted to download approximately 600,000 customer records from the Archtics database, Perez said the projected download time was around 70 hours -- an unacceptable number when the goal is to access information in near real time.
“We’ve had some challenges with the Amway Center just because of the level of technology that we’re using there,” Perez explained. “Ticketmaster, for example, isn’t dealing with other teams that have gigabit connections, so we asked them for a gigabit router and we’ve gotten it now."
Perez added that he thinks the Magic’s efforts along these lines will break down barriers for sports teams that choose to implement advanced analytics technology in the future.
“I think we’re already saving them some pain,” he said. “The two months that we just spent with Ticketmaster is two months that the next team won’t have to spend.”
Choosing advanced analytics software vendors
In the Magic’s first major foray into analytics, the organization decided to buy a basic IBM SPSS license as well as the SPSS Decision Trees module. Perez said the organization uses that software primarily to determine if season ticket holders renew their tickets.
But not long ago, Perez attended a conference and heard a speaker from SAS talk about its new packaged product, SAS for Sports. The discussion left Perez feeling like the Orlando Magic could be doing much more with advanced analytics software than just looking at ticketing-related issues.
SAS’s technology appealed to Perez partially because of the data warehousing initiative that would ultimately go along with it. SAS wanted to pull in and analyze information from a wider variety of disparate sources than IBM-SPSS -- or any other vendor they considered -- and Perez said that opened up new opportunities to get to know the fans better.
“We’re going to pull in our retail information and we’re looking eventually to do some other data feeds whether it’s with Microsoft Dynamics, which we have right now as kind of our CRM platform, and some other things so that we get that single customer view,” Perez said. “That wasn’t anything that we could do with SPSS.”
The Magic ultimately decided to move forward with SAS for Sports. The package includes SAS Marketing Automation, for planning testing and executing marketing campaigns and SAS Enterprise BI Server, which includes customizable dashboards and reporting functionality. The package also includes statistical and data mining tools.
How the Magic will use advanced analytics in the future
The Orlando Magic seem to have no trouble selling out games, but a little insurance in the form of advanced analytics software never hurt anyone.
Once the analytics software is implemented, it will be used in part to identify first-time game attendees and target them with special deals or marketing campaigns designed to get them to come back again. The technology will also be used to target season ticket holders with marketing campaigns designed to get them to move to a better section.
“It’s about tracking data at the individual level,” said Craig Duncan, manager of SAS for Sports. “In some cases, if a [sports organization] can move people from attending two games per year to three games per year, that means a significant jump in revenue.”