SAS: Making Magic In Orlando
Sports analogies don’t really work when it comes to business. Admit it, how many time have you sat in a meeting rolling your eyes while your manager says things like, “we need to hit it over the fence!”, or even more cringe-inducingly, “it’s 4th and 10, and the clock is running!”?
A retail business operates in a cycle of continuous improvement that never stops. In Retail there’s more than one competitor “on the field” at any time, there isn’t a clock, and there are no time-outs. And can you imagine New England Patriots quarterback Tom Brady in the huddle saying, “that’s OK, Gronk. Let’s keep running that play until you catch it!”? There are no do-overs in professional sports, but that’s pretty close to how retailers operate every day.
Despite the differences, there are things that retailers can learn from sports franchises. Most importantly, sports franchises are learning that it’s not necessarily “the product” (the home team’s performance) that matters most to consumers – it’s “the experience” that counts. This first came to me some years ago in San Diego. I was attending a conference at the Omni Hotel, which is directly across the street from Petco Park, home of Major League Baseball’s San Diego Padres. No one would ever accuse the Padres of putting a top-tiered team on the field (in the last 5 years, the team hasn’t gotten closer than 16 games behind the division-leading team), but I love baseball and the conference was winding down, and so I decided to catch a few innings.
Being a fan of the beleaguered Oakland A’s, a team that has been trying to negotiate with local municipalities to build a new stadium for years to replace the old-and-tired Oakland Coliseum, I was delighted at how fun and family-oriented the San Diego venue is; it’s more like a theme park than a baseball diamond. In spite of the fact that the Padres aren’t particularly exciting (and in fact they were getting beat when I was there), the park was near capacity, with lots of activity - not in the stands, but in the community areas where families congregated. It was a pleasant evening at the park, where a baseball game was also being played.
The Orlando Magic Story
Earlier this month, I attended a SAS analyst conference in Naples, Florida. One of the case studies featuring SAS analytics was presented by Jay Riola, VP of Strategy for the NBA’s Orlando Magic. He shared how the sports franchise is using SAS software tools, including Customer Intelligence 360, to analyze data in order to personalize the fan experience through segmentation analytics and targeted marketing.
Riola explained how the team has designed its mobile app to enable fans to customize their experience in a kind of a la carte way. The heart of the Orlando Magic app is the Magic Marketplace, which helps fans customize their Orlando Magic experience:
“Make your Magic experience unforgettable! Shop the Magic Marketplace from the Orlando Magic app and get access to once-in-a-lifetime Magic experiences, including visits from the Orlando Magic Dancers and STUFF, seat upgrades, dining, merchandise and more!”
In a one-on-one meeting, Mr. Riola described how fans can use accumulated “Magic Money” to customize the experience (Magic Money is a form of currency which is earned by season ticket holders who cannot attend a game and release their tickets for re-sale or can be earned by fans through the team’s rewards program). The point of this program is to not only offer an engaging total experience, but (by virtue of the fact that fans opt-in to the system) to understand who the fans are and what works best for them. The system can perform segmentation analyses to identify those that are likely to renew, and those that are likely to upgrade. From there, the company can develop very personalized and targeted campaigns intended to further engage fans and (as Jay said) “help drive game attendance.”
With the Magic’s on-court performance over the last five seasons not being where they want it to be, the team has wrapped a commodity product with an extraordinary experience. So, despite the usually high correlation between winning and attendance, the Orlando Magic have experienced solid attendance and high satisfaction scores for fans attending games at Amway Center.
Retail As Entertainment
Retail and professional sports are both in the entertainment business. In sports, the “product” is the game, but “the experience” is what sells. RSR team has made the point countless times that retailers also need to focus on “the experience,” especially when the assortment is full of commodity items and prices are transparent. Retailers are learning that to create an entertaining experience both inside and outside of the four walls of the store, they need to emulate how consumers entertain themselves in today’s world – via Internet-connected mobile digital devices that connect them to a world of images, sounds, and information, 24x7. Then, retailers need to carefully observe how customers react to their experiences and correlate them to sales, constantly experimenting and tweaking the offer.
None of this can happen without maintaining “an unwavering focus on performance” (not just analyzing sales numbers), and by gaining an understanding
of customer behavioral patterns that result in greater sales and more loyalty. As SAS Director of Marketing Natalie Osborn stated, “great experiences don’t just happen.”
Obviously, SAS sees the opportunity, and it explains why the company is making headway in penetrating the Retail market with its solutions