Segmenting MLB Fans to

Drive Strategic and Brand

Planning Decisions Case Study

March 9, 2013

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

Situation

Cleveland 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

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

Stars of the ‗90‘s

Back to back

Cy Young‘s

traded

Harder for me to

justify spending

on games

No one goes

downtown

anymore

Isn‘t this all about winning?

What is Segmentation?

Dividing an audience – in this case fans – into distinct groups that share

a common set of characteristics.

Why Segment?

Could these two possibly want exactly the same things when they attend a game?

Why Segment?

Different types of fans contribute significantly different amounts of revenues.

“The most important strategic decision is targeting—nail this and everything else falls into place.‖

- Phil Kotler

Why Segment?

―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

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

Gathered from several sources

– General Population survey panels

– Single game ticket buyer databases

– Season ticket holder database

Executed in concert with MLBAM

Cleveland

Cuyahoga

Lorain Erie

Huron Medina

Sum

mit Portage

Geauga

Lake Ashtabula

Trumbull

Mahoning

Stark Wayne Ash

land

Ric

hlan

d

Holmes

Tus

cara

was

Carroll

Tier 1

Tier 2

Tier 3

Multi-Dimensional and ―Profit-Directed‖ Approach

CREATE Hundreds of

Variables

1. Category

Attitudes

2. Category

Behaviors

3. Needs in Team/

Experience

4. Lifestyle

5. Psychographics

6. Demographics

7. Media behaviors

EVALUATE

Hundreds of solutions using statistical and

managerial criteria

TEST Variables to see

which ones are

predictive of:

Ticket spending

Likelihood to buy

Season Tickets

Price Sensitivity/

Promotion Focus

Advocacy /

Influence

SELECT

the Optimal

Solution

Analytics

Factor Analyze

• Remove ―redundancies‖ in the data

Normalize

• Prevent survey scale issues

Test

• Identify the most useful segmentation variables

Segment

• Using k-means clustering to develop segments

• Evaluated statistically and managerially

Analytics

We use correlation analysis to identify the variables that are useful segmentation variables.

Games

Attended $ / Ticket

Likely to buy

Season Tix Advocacy

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 -..33

X Owners owe it to their fans to spend money .02 .03 -.03 -.01

X I only want to follow a winner .01 -.02 .02 -.04

Five Fan Segments

Family Man Phil

Value Victor(ia)

Homebody Hank and Helen

Affluent Alan

17%

16%

17%

28% 23%

Event Emily

23%

5% 2% 2% 2%

28%

19%

9% 4% 5%

17%

25%

27%

13% 15%

16%

26%

23%

18% 21%

15%

22%

25%

29%

28%

2% 4%

15%

34% 29%

Indians Fans % Of Attenders (Attended 1+ games in 2011)

% of Attendance (2011)

% of Ticket Revenue (2011)

% of Total Revenue* (2011)

S10c, Q3, Q7, Q23, Q25 *Total Revenue = Tickets + Indians’ share of concessions + Merchandise sold at Progressive or Indians Retail Location

15

Homebody

Hank &

Helen

Event

Emily

Value

Victor(ia)

Family Man

Phil

Relative Value of Indians Fan Segments

Alan and Phil represent just 33% of fans but 81% of revenues.

Alan

(Non STH)

Affluent Alan

(STH)

Plenty of growth opportunity remains with Alan, Phil and Victor

Most Recent Game Attendance

13% 7% 17%

38%

63%

10% 12%

9%

27%

27%

77% 81% 74%

35%

11%

Affluent Alan Family Man Phil Value Victor Event Emily Homebody Hank & Helen

2011

2009-2010

Haven’t Been in the

Past 3 Years

17

Alan and especially Phil are less volatile spenders than Victor

$1,062

$749

$624

$219

$148

Affluent Alan

Family Man

Phil

Value

Victor(ia)

Event Emily

Homebody

Hank & Helen

Pre-Season

Favorites

.500 Season Post-Season

Contenders

Rebuilding

Season

$948

$657

$535

$175

$113

$601

$429

$318

$142

$74

$492

$370

$243

$115

$56

2.2

2.0

2.6

1.9

2.6

Volatility

Ratio

Intended Ticket Spend During

We can understand the purchase decisions for our key targets

Who Typically Purchases

Tickets to the Game

Who Comes Up With The

Idea to Go To a Game

Distribution of “Say” in the

Decision to Go to a Game

Base: Those who attended games as a family.

Q18, Q19, Q20 18

63%

37%

58% 42%

67%

33%

Affluent

Alan

Family

Phil

Value

Victor(ia)

Event

Emily

Home

Hank &

Helen

(353) (281) (252) (144) (74)

Male 68% 70% 60% 54% 56%

Female 32% 30% 40% 46% 44%

Male 61% 64% 59% 49% 54%

Female 39% 36% 41% 51% 46%

Male 76% 73% 63% 59% 59%

Female 24% 27% 37% 41% 41%

Total Respondents

Female Male

Male 60%

Female 40%

Percent of Game Attenders

We know when they buy tickets

Days in Advance Typically Purchase Tickets

Q6

12%

10%

14%

14%

18%

35%

22%

20%

20%

17%

15%

6%

26%

27%

20%

12%

9%

6%

28%

22%

18%

18%

12%

2%

32%

22%

18%

7%

12%

8% Before the season started

During the season, but

more than a month before

3-4 weeks in advance

1-2 weeks in advance

<1 week in advance

On game day

Affluent

Alan

Family Man

Phil

Value

Victor(ia)

Event

Emily

Homebody

Hank & Helen

Average # of days

in advance

24.6 13.7 11.8 13.4 14.3

19

Seat location preferences can enable us to better orchestrate the fan experience when

they arrive at the Field – and ticket product offers.

4% 3% 5% 4% 4% 9% 3% 8% 10% 18%

8%

22%

12%

22% 30% 19% 42%

23%

22%

26%

20% 29%

19% 27% 60%

41% 35% 30% 28%

19%

Field Box Lower Box Lower Reserved

Upper Box Upper Reserved

Bleachers

Fan Composition by Seating Area

Affluent Alan

Family Man Phil

Value Victor(ia) Event Emily

Homebody Hank & Helen

Note: Only seating sections with sufficient sample sizes were included in this analysis. 20

We know who the season ticket holders are, and presumably where to find more.

23%

28%

4%

17%

2% 4%

16%

7%

20%

17%

91%

72%

Overall Current STH Lapsed STH

Segment Distribution

Affluent Alan

Family Man Phil

Value Victor(ia)

Event Emily

Homebody Hank &

Helen

21

We can learn why they own and how they use their season tickets

76% 84%

19%

16% 5%

Current STH Lapsed STH

Business

Business and Pleasure

Pleasure

87% 90%

13% 10%

Current STH Lapsed STH

Reason for Buying Season Tickets Actual Use of Season Tickets

Q27, Q28 22

We know how different STH groups value different STH amenities.

Current STH Lapsed STH Prospects

Loaded value on ticket

Post Season ticket priority

Ticket exchange Dates

Complimentary suite Rental

Discounted pricing vs.

single game tickets

Access to Best Seat

Locations

Ticket Exchange Dates

Access to best seats

Post season ticket priority

Discounted season parking

pass

Link to Media / Databases to find them with offers

Directly Linked to

Scarborough for

Media Planning

Tools for Future

Research/ Monitoring

Ticket databases

Scored

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

Segments have fundamentally altered the Strategic Planning Process

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

―Give me the freedom of a clear strategy‖

- Bill Bernbach

Increased understanding has changed Indians priority and focus

WHO they target, WHAT they message, and HOW they reach them….

Business plans tailored towards improving Alan / Phil experience

Marketing / Communication messages are created with Alan / Phil in mind and tested among those fan segments for feedback

Media and promotional plans have been optimized to tailor to Alan / Phil media habits

Influences creative

Influences media selection

Influence flighting of advertising

New Social Suite devoted to Phil and his family

In Park Experience is now being tailored and improved for Affluent Alan

New 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 certain sections or on certain games

Refreshed advertising to focus on tradition of baseball/Indians, the greatest attendance motivator for Alan

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 unique music/scoreboard entertainment for family heavy days

Increased promotional giveaways / activities that are trip drivers for Phil: Fireworks, Wearable giveaways, Dollar Dog nights

Preparing to launch a comprehensive youth marketing plan for Phil‘s family

Key barriers are being have been identified and are being lowered

Introducing new parking and concession value offers

Working with the city to provide easier and improved transportation

alternatives for fans

Insights have armed key sales forces

Corporate partnerships both have and can demonstrate a clear understanding of who

is 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 Phil

STH sales force have tailored scripts for STH renewals and prospecting

A good old fashioned trade….

Your Name Here SVP, Marketing & Brand

My New Favorite MLB Team

4 Park Drive

MLB City, SW 99999

Segmenting MLB Fans to

Drive Strategic and Brand

Planning DecisionsCase Study

March 9, 2013

Trade Analyzer

(617) 449-4189

Eric.Paquette@copernicusmarketing.com

http://goo.gl/7zfa7

Eric Paquette, Sr. Vice President