The Orlando Magic shoots for higher revenue with SAS® Analytics
Professional sports teams in smaller markets often struggle to build a big enough revenue base to compete against their larger market rivals. By using SAS® for Patron Value Optimization, the Orlando Magic has achieved the seventh-highest revenue in the National Basketball Association, despite being in the 20th largest market.
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Director of Business Strategy
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The Magic accomplishes this feat by studying the resale ticket market to price tickets better, to predict season ticket holders at risk of defection (and lure them back), and to analyze concession and product merchandise sales to make sure the organization has what the fans want every time they enter the arena. The club has even used SAS to help coaches put together the best lineup.
"Our biggest challenge is to customize the fan experience, and SAS helps us manage all that in a very robust way," says Alex Martins, CEO of the Orlando Magic.
The Orlando Magic uses SAS to help manage the basketball team by analyzing the efficiency of certain lineups. "The 'Moneyball' approach, if you will," says CEO Alex Martins.
The challenge: Filling every seat
Perez' group takes a holistic approach by flowing data from all revenue streams (concession, merchandise and ticket sales) and outside data (secondary ticket market) to develop models that benefit the whole enterprise. "We're like an in-house consulting group," explains Perez.
In the case of season ticket-holders, the team uses historic purchasing data and renewal patterns to build decision tree models that bucket subscribers into three categories: most likely to renew, least likely and fence sitters. The fence sitters then get the customer service department's attention come renewal time, Perez explains.
Speed to insight is particularly important. The Magic uses a heat map, supported with SAS, that is constantly updated to show how many seats are still available in each section of the arena as game day approaches. Everyone on the business side has access to this data in near-real time from a portal, which allows marketing, for instance, to make quick decisions about offering specials to fill the seats. "We can't wait till the end of the day to know what we need to do to sell tickets for a game that is in just a few days. SAS allows us to use that data as quickly as possible," Perez explains, adding that the heat mapping is also examined throughout the season to plan pricing and packaging for the following season.
Ease of use helps spread analytics message
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.
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Director of Business Strategy
The Orlando Magic wanted to identify season ticket holders at risk of not renewing and then optimize ticket pricing to pump up revenue.
SAS® for Patron Value Optimization
The Magic has grown revenue, optimized ticket pricing and gotten a better understanding of lifetime customer value.
“"We have the seventh-largest revenue stream in terms of ticket sales of all 30 teams and we're the 20th largest market in the NBA. It's because we can take data and analyze it so effectively."”