Segmenting Major League Baseball Fans to Drive Strategic and Brand Planning Decisions

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Download the presentation slides Eric Paquette delivered at the annual SABR Analytics Conference describing the marketing and branding strategy work Copernicus did with the Cleveland Indians.

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Segmenting Major League Baseball Fans to Drive Strategic and Brand Planning Decisions

  1. 1. Segmenting MLB Fans toDrive Strategic and BrandPlanning DecisionsCase StudyMarch 9, 2013
  2. 2. Introduction to Copernicus Copernicus is a marketing consulting organization that uses front-line experience, consumer insights, and advanced data analytics to develop, plan and implement transformational marketing strategies. By ―transformational‖ we mean strategies that change brand trajectories, career paths and sometimes entire companies and even industries. 2
  3. 3. SituationCleveland hit hard by economic downturn  At least four Fortune 500 companies were acquired or relocated  Cleveland had 2nd largest population decline since 2000  Median Household income declined 16% from 2007 – 2011
  4. 4. Situation  Ballpark Design (135 suites) not suited for current corporate climate  Season ticket product is becoming increasingly less relevant to our fan base  Fans have become increasingly accustomed to discounted tickets  Attendance not rebounding to prior levels in winning periods for the team  Need for a better understanding of fans to guide marketing and improve the fan experience No one goes Back to back downtown Cy Young‘s anymore traded Harder for me to justify spending Stars of the ‗90‘s on games
  5. 5. Isn‘t this all about winning?
  6. 6. What is Segmentation? Dividing an audience – in this case fans – into distinct groups that sharea common set of characteristics.
  7. 7. Why Segment?Could these two possibly want exactly the same things when they attend a game?
  8. 8. Why Segment?Different types of fans contribute significantly different amounts of revenues.
  9. 9. Why Segment?“The most important strategic decision is targeting—nail this and everything else falls into place.‖ - Phil Kotler ―If you‘re on the wrong train, every stop is the wrong stop.‖ - David Verklin―A great talent, sailing in the wrong direction will, like the lost pilot breaking the speed record, reach the wrong destination all the more quickly.‖ - Bill Bernbach
  10. 10. Approach Conducted 1,400+ online surveys with area fans From geography that represents the best opportunity for incremental attendance Indicating a fan level of 3-5 on a 5 point scale Tier 1 Tier 2 Ashtabula Tier 3 Lake Cleveland Gathered from several sources Cuyahoga Geauga Erie Trumbull – General Population survey panels Lorain Portage Summit Huron – Single game ticket buyer databases Medina Mahoning – Season ticket holder database Ashland Richland Wayne Stark Holmes Carroll Tuscarawas Executed in concert with MLBAM
  11. 11. Multi-Dimensional and ―Profit-Directed‖ Approach CREATE Hundreds of Variables TEST Variables to see1. Category which ones are Attitudes predictive of:2. Category  Ticket spending EVALUATE Hundreds of SELECT Behaviors  Likelihood to buy solutions using the Optimal Season Tickets statistical and3. Needs in Team/ managerial criteria Solution Experience  Price Sensitivity/ Promotion Focus4. Lifestyle  Advocacy /5. Psychographics Influence6. Demographics7. Media behaviors
  12. 12. Analytics Factor Analyze Normalize Test Segment• Remove • Prevent survey • Identify the most • Using k-means ―redundancies‖ scale issues useful clustering to in the data segmentation develop variables segments • Evaluated statistically and managerially
  13. 13. Analytics We use correlation analysis to identify the variables that are useful segmentation variables. Games Likely to buy $ / Ticket Advocacy Attended Season Tix I am an expert on baseball .45 .30 .18 .38 I have been a fan since I was a child .35 .39 .21 .24 I pay careful attention to the game .38 .28 .23 .27 I only go to the big games -.25 -.42 -.19 -..33X Owners owe it to their fans to spend money .02 .03 -.03 -.01X I only want to follow a winner .01 -.02 .02 -.04
  14. 14. Five Fan Segments Family Man Phil Affluent Alan Value Victor(ia) 16% 17% 17% Event Emily Homebody Hank and Helen 23% 28%
  15. 15. Alan and Phil represent just 33% of fans but 81% of revenues. Relative Value of Indians Fan Segments Affluent Alan 2% 4% (STH) Alan 15% 15% (Non STH) 22% 29% 34% Family Man Phil 16% 25% Value 26% 17% Victor(ia) 28% 29% 23% Event 28% 25% Emily 21% 18% 27% Homebody Hank & 19% 13% 15% 23% Helen 9% 5% 4% 5% 2% 2% 2% Indians Fans % Of Attenders (Attended % of Attendance % of Ticket Revenue % of Total Revenue* 1+ games in 2011) (2011) (2011) (2011) 15S10c, Q3, Q7, Q23, Q25 *Total Revenue = Tickets + Indians’ share of concessions + Merchandise sold at Progressive or Indians Retail Location
  16. 16. Plenty of growth opportunity remains with Alan, Phil and Victor Most Recent Game Attendance 11% 35% 27% 2011 77% 74% 81% 27% 63% 2009-2010 9% 38% 10%Haven’t Been in the 12% Past 3 Years 13% 17% 7% Affluent Alan Family Man Phil Value Victor Event Emily Homebody Hank & Helen
  17. 17. Alan and especially Phil are less volatile spenders than Victor Intended Ticket Spend During Pre-Season Post-Season .500 Season Rebuilding Volatility Favorites Contenders Season Ratio Affluent Alan $1,062 $948 $601 $492 2.2 Family Man $749 $657 $429 $370 2.0 Phil Value $624 $535 $318 $243 2.6 Victor(ia) Event Emily $219 $175 $142 $115 1.9 HomebodyHank & Helen $148 $113 $74 $56 2.6 17
  18. 18. We can understand the purchase decisions for our key targetsPercent of Game Attenders Affluent Family Value Event Home Total Respondents Alan Phil Victor(ia) Emily Hank & Male 60% Helen Female 40% Female Male (353) (281) (252) (144) (74) Who Comes Up With The Male 68% 70% 60% 54% 56% Idea to Go To a Game 37% 63% Female 32% 30% 40% 46% 44%Distribution of “Say” in the 42% Male 61% 64% 59% 49% 54%Decision to Go to a Game 58% Female 39% 36% 41% 51% 46%Who Typically Purchases 33% Male 76% 73% 63% 59% 59% Tickets to the Game 67% Female 24% 27% 37% 41% 41% Base: Those who attended games as a family. 18 Q18, Q19, Q20
  19. 19. We know when they buy tickets Days in Advance Typically Purchase Tickets Affluent Family Man Value Event Homebody Alan Phil Victor(ia) Emily Hank & HelenBefore the season started 35% 6% 6% 2% 8% During the season, but 18% 15% 9% 12% 12%more than a month before 3-4 weeks in advance 14% 17% 12% 18% 7% 1-2 weeks in advance 14% 20% 20% 18% 18% <1 week in advance 10% 20% 27% 22% 22% On game day 12% 22% 26% 28% 32%Average # of days 24.6 13.7 11.8 13.4 14.3in advance 19 Q6
  20. 20. Seat location preferences can enable us to better orchestrate the fan experience whenthey arrive at the Field – and ticket product offers. Fan Composition by Seating Area 19% 30% 28% 41% 35% Affluent Alan 60% 27% 19% 20% 29% 26% 23% 30% 19% 42% Family Man Phil 22% 22% 22% Value Victor(ia) 12% 10% 18% Event Emily 3% 8% 8%Homebody Hank & Helen 4% 3% 5% 4% 4% 9% Field Box Lower Box Lower Upper Box Upper Bleachers Reserved Reserved Note: Only seating sections with sufficient sample sizes were included in this analysis. 20
  21. 21. We know who the season ticket holders are, and presumably where to find more. Segment Distribution Affluent Alan 17% Family Man Phil 16% 72% Value Victor(ia) 17% 91% Event Emily 28% 20%Homebody Hank & 23% Helen 7% 4% 2% 4% Overall Current STH Lapsed STH 21
  22. 22. We can learn why they own and how they use their season tickets Reason for Buying Season Tickets Actual Use of Season Tickets 5% 10% 16% 13% 19% Business Business and Pleasure 87% 90% 84% 76% Pleasure Current STH Lapsed STH Current STH Lapsed STHQ27, Q28 22
  23. 23. We know how different STH groups value different STH amenities. Current STH Lapsed STH Prospects Loaded value on ticket  Discounted pricing vs.  Access to best seats single game tickets Post Season ticket priority  Post season ticket priority  Access to Best Seat Ticket exchange Dates Locations  Discounted season parking pass Complimentary suite Rental  Ticket Exchange Dates
  24. 24. Link to Media / Databases to find them with offers Directly Linked to Ticket databases Tools for Future Scarborough for Scored Research/ Monitoring Media Planning
  25. 25. How can it be stable when fan emotions are potentially so volatile?Segments must be defined carefully  Use stable characteristics of people  Not unstable perceptions of the team
  26. 26. Segments have fundamentally altered the Strategic Planning Process ―Give me the freedom of a clear strategy‖ - Bill Bernbach  The targets are integrated as part of the strategic planning process  Strategies and tactics under consideration are evaluated against Alan and Phil  Of four 2013 strategic priorities, two specifically target Alan and Phil
  27. 27. Increased understanding has changed Indians priority and focusWHO they target, WHAT they message, and HOW they reach them….Business plans tailored towards improving Alan / Phil experienceMarketing / Communication messages are created with Alan / Phil in mind and testedamong those fan segments for feedbackMedia and promotional plans have been optimized to tailor to Alan / Phil media habits  Influences creative  Influences media selection  Influence flighting of advertisingNew Social Suite devoted to Phil and his family
  28. 28. In Park Experience is now being tailored and improved for Affluent AlanNew Premium Club (2013 Debut)  New construction of exclusive 100 seat premium game viewing experience. Best seating for best customers.New seating product in lower bowl  Where Alan sits with more of what he wants  More comfortable patio style seating with semi-circle table Tailoring scoreboard entertainment, music, usher interaction towards Alan for certainsections or on certain gamesRefreshed advertising to focus on tradition of baseball/Indians, the greatestattendance motivator for Alan
  29. 29. In Park Experience is also being tailored for Family Man Phil….New Kids Clubhouse (2012 Debut)  Suite Renovation: Kids area for kids to play, parents can still watch and enjoy game  97% satisfaction with area and 15% of attendees would not have come to game without it Programming area of the park to be completely family focused: Family friendly ushers,increased mascot appearances, tailoring F&B to families, and creating uniquemusic/scoreboard entertainment for family heavy daysIncreased promotional giveaways / activities that are trip drivers for Phil: Fireworks,Wearable giveaways, Dollar Dog nightsPreparing to launch a comprehensive youth marketing plan for Phil‘s family
  30. 30. Key barriers are being have been identified and are being loweredIntroducing new parking and concession value offers Working with the city to provide easier and improved transportationalternatives for fans
  31. 31. Insights have armed key sales forces Corporate partnerships both have and can demonstrate a clear understanding of whois in the ballpark  Increased credibility with prospects and renewals  Enhanced target identification for the sales force – companies that seek Alan and Phil as their targets  Improved customization of partner opportunities for Alan and PhilSTH sales force have tailored scripts for STH renewals and prospecting
  32. 32. A good old fashioned trade…. Your Name Here SVP, Marketing & Brand Segmenting MLB Fans to My New Favorite MLB Team Drive Strategic and Brand 4 Park Drive Planning Decisions MLB City, SW 99999 Case Study March 9, 2013 Trade Analyzer
  33. 33. Eric Paquette, Sr. Vice President (617) 449-4189 Eric.Paquette@copernicusmarketing.com http://goo.gl/7zfa7

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