Within the sports industry, it is my opinion that collegiate athletics trails far behind its “major league” counterparts in the NHL, NFL, NBA and MLB when it comes to analytics (and those leagues aren’t nearly as sophisticated as other industries: consumer packaged goods, pharmaceuticals, etc.).
Though that may initially sound negative, however, I see it as an opportunity: by taking a few steps into the analytical world, collegiate athletics could tap a potentially enormous growth opportunity, and generate substantial new revenues.
Many signs point to college athletics moving in the right direction on the business front. Fan avidity is at an all-time high, perhaps due to the ease of obtaining team-specific content via mobile; and we’re hearing more and more frequently about schools hiring large, experienced agencies to manage their ticketing and sponsorship operations in an effort to grow revenue. Turnkey has recognized this growth for some time now, and has begun creating products and services specifically to cater to what we see as a potential “boom” market.
However, this increase in analytical sophistication isn’t the norm at every big-time university. I recently visited a top athletic department and was shocked to learn how elementary their business operations appeared. The staff informed me they still operate in a world of “hard tickets”, tear tickets at the gate, do not scan tickets to validate entry, and do not have an online platform for ticket holders to manage their accounts. This also means they do not practice dynamic pricing/variable pricing, analyze donor behaviors in relation to their ticket purchases, cultivate a database of consumers tied to their athletic department, or perform any type of retention modeling to identify at-risk accounts.
By not availing themselves of some of these practices, it is my estimation that this university is leaving millions of dollars in real and opportunity revenue on the table.
This experience led me to question if athletic departments at public institutions have a responsibility to maximize revenue opportunities using methods that have been proven successful across the professional sports industry. Though these efforts require time and money, especially at the outset, they ultimately lead to organizations operating more efficiently and producing revenue, which all institutions should strive for. After all, revenues from collegiate athletics provide for many facets of public institutions. For example, there are many parts of the University of North Carolina that benefit from the revenues produced by the men’s basketball program. If the UNC athletic department has opportunities to grow that revenue, is it their responsibility to jump on those opportunities? I think so.
If they haven’t already, all collegiate athletic departments must begin the evaluation of dynamic pricing, loyalty programs, database marketing, lead scoring, and more. Growing revenue by 3%, 5% or 10% would be significant – well worth the initial investment – and would benefit a large number of stakeholders across the university.