Steelers, Penguins, Pirates use analytics to boost business
June 18, 2014 10:16 PM
Penguins new GM Jim Rutherford has said one of the first things he wants to focus on is analytics.
By Michael Sanserino / Pittsburgh Post-Gazette
Move over, Moneyball.
The analytics movement that transformed the way executives manage sports rosters has moved to the business side of the industry, where ticketing and marketing executives are gathering detailed information about fans to help sell season-ticket packages and enhance relationships with sponsors.
At this point, teams know a lot more about their fans than they did 10 years ago — age, gender, hometown, favorite player, favorite food, clothing sizes and even beer preference — and it’s allowing them to get creative in their promotional efforts.
“The sports industry has been late to the party to use data to drive decisions,” Kevin O’Toole, the Cleveland Cavaliers senior director of business intelligence, said at the Sports Facilities & Franchises and Ticketing Symposium, held last week at the Marriott City Center Downtown.
The industry has come to embrace the strategy. “It has outgrown its walls at this point,” said Drew Cloud, the Pirates executive vice president and chief sales and marketing officer. “It is here to stay and growing at an epic rate in sport business.”
In many ways, sports teams are following the example of retailers, which long have used rewards programs and other incentives to gather information about customers and increase business.
“It’s a little bit of a Big-Brothery approach,” said Josh Brickman, director of strategy and analytics for Monumental Sports and Entertainment, which owns and operates the Washington Capitals of the NHL, the Washington Wizards of the NBA, the Washington Mystics of the WNBA and the arena that houses all three.
Mr. Brickman said the strategy has made teams more responsive to fans, enabling them to tailor all aspects of the fan experience based on information about customers.
There are a variety of methods to gather information about fans. The Penguins launched a mobile app called PensPoints in February 2013, a loyalty app that rewarded fans for attending games, buying food and merchandise, purchasing items from team sponsors and even for watching or listening to the team’s broadcast partners.
For fans, the motivation to sign up for the loyalty program is simple: Earn points doing things fans normally do, and then redeem them for Penguins merchandise.
With more than 87,000 members and about 38,000 active users of the app during each of the team’s 82 games, the Penguins have been rewarded with a treasure trove of data.
Since the launch, the Penguins have tracked 4.2 million unique fan activities, said David Peart, senior vice president of sales and service. Fans have spent $2.4 million on Penguins merchandise using the app and $3 million in associated sponsorship revenue, including $300,000 in promotions directly linked to the app.
The team also gets a clearer picture of each fan, many of whom buy tickets on the secondary market with no direct ties to the team.
Other teams, including the Pirates, are using digital ticketing, which replaces physical, paper tickets with bar codes that generate on mobile devices. Digital tickets give teams a better idea of the identity of each fan who enters the stadium or arena.
Cole Gahagan, executive vice president of client revenue at Ticketmaster North America, said customers purchase an average of 2.7 tickets per Ticketmaster transaction. Traditionally, teams knew only the identity of the individual who made the purchase, and often those tickets had been resold on the secondary market.
With digital ticketing, teams can better track the identities of individuals who walk through the turnstiles, and they can use that information to track fan behavior over time. Some teams even encourage fans to scan their digital tickets at points of purchase.
Eventually, teams hope to use so-called beacon technology to track fan movements in an arena or a stadium. On Tuesday, Pittsburgh-based YinzCam, a mobile app that drives in-game fan engagement, announced a partnership with Gimbal, a San Diego company that uses customer proximity to drive interaction. The two will team up on a geo-tracking platform that will engage fans as they move about.
Using the data
For now, most of the industry’s focus has been on aggregating data.
“I have all this data; what am I going to do with this?” said Mark Plutzer, vice president of ticketing for MLB Advanced Media, the league’s interactive media and Internet company. “You can’t have that conversation until you accumulate it.”
However, once data is accumulated, many struggle to figure out how to use it.
“Everyone’s obsessed with big data, and don’t get me wrong — the more data you have the more you can do — but it’s about usable data,” said Russell Scibetti, vice president of product strategy for KORE Software.
Teams use customer management relationship software, similar to the kind KORE Software offers, to synthesize data collected from a variety of “touchpoints.” Those might be ticketing transactions, concession and merchandise sales or even social media interactions.
The Vancouver software company has about 70 professional sports team clients in North America, including the Penguins and Pirates. Each software module costs teams $36,000 annually, with a $75 monthly fee per authorized software user.
The Pirates employ a four-person analytics team in the ticket sales and marketing departments. Using data collected via digital ticketing, fan surveys, sales trends, past attendance figures and weather forecasts, the analytics team works with ticketing executives to forecast future attendance and modify sales techniques.
The Steelers also use analytics in various departments throughout the organization, spokesman Burt Lauten said.
The Cleveland Cavaliers have converted more than 90 percent of their ticket inventory to digital tickets, and that gives the basketball team’s business side an advantage. Two hours before each home game, the ticketing staff pulls a list of the most recent ticketholders and emails them with game information.
The team also encourages fans to stop by sales tables in the arena, and ticketing sales representatives use customer and ticket information to make seat visits during games. The method has increased leads for season-ticket packages, Mr. O’Toole said.
Sam Gerace, CEO at Veritix, a Cleveland-based digital ticketing, event marketing and management firm, said season-ticket sales teams have three times the close rate when they are equipped with behavioral profiles.
The Boston Red Sox, which developed a loyalty app similar to PensPoints, dramatically changed fan behavior through a promotion.
The team realized more fans used Visa credit cards for transactions at Fenway Park, while team sponsor MasterCard accounted for just 20 percent last season.
Through a promotion this year that offered fans bonus rewards points, MasterCard now accounts for 40 percent of those transactions, making it the most-used credit card at Fenway Park, said Tim Zue, the team’s vice president of business development.
“The data accumulation is the first step,” said Bryan Perez, president of digital, ticketing and media for AEG, a Los Angeles-based sports and entertainment company that owns and operates numerous venues and franchises worldwide.
“Processing all that data and doing it in right and insightful ways is not incredibly easy, but it’s not impossible either.”
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