Today I am sharing an article that I wrote for the most recent issue of SEAT Magazine, a quarterly publication of the Association of Luxury Suite Directors.
Strategy Before Systems: IBM steps up to the plate in sports and entertainment with a new approach to technology decisions
Without question, the changing technology landscape impacts the relationship between sports and sports fans. Teams, colleges, and venues are consistently challenged with making sure the in-venue experience matches and exceeds the at-home experience. New social media channels seemingly appear out of thin air to provide more ways to create and distribute content for fans to consume. And data that used to be impossible to get pours out of every new platform, from loyalty systems to mobile ticketing.
When this rapid pace of technology development combines with the passions of sports fans, it becomes quite a challenge for team, college, and venue staffs to navigate these new technologies and find ways to integrate them across the fan experience in a consistent and beneficial manner. Luckily, along with challenges come opportunities, which leads us to IBM and its recent strategies with sports properties.
If I asked you what comes to mind when I say IBM, you might talk about servers, mainframes, and laptops (even though they don’t make those anymore), or about IBM being a pure technology services provider. However, as the company increases its presence in the sports and entertainment industry, it is taking a very different approach via its IBM Interactive Experience division, which is the largest digital agency in the world, according to Advertising Age’s (AdAge) 2015 Annual Agency Report. This division starts first and foremost with strategy, design, and data over a hardware and software driven approach.
To help direct the efforts in the sports space, IBM Interactive Experience has brought on industry veteran Jim Rushton as Global Leader/Partner for the Sports and Entertainment Practice. Rushton has over 20 years of hands-on sports and media experience from his time with WEEI, the Miami Dolphins, and the San Diego Padres. Rushton and I recently sat down together to discuss IBM’s strategy and its potential impact on sports and entertainment venues.
Building a Master Plan
From where Rushton sits now, there are lots of tools in the IBM technology tool belt at his disposal, but before anyone starts grabbing for hammers and wrenches, it’s critical to start with the larger goal in mind. So the typical starting point in any of his discussions with team executives is centered on building a plan.
“We develop a technology master plan that can evolve over time and react to how the fans are evolving but also can make sure the team isn’t stuck investing in a particular technology that a year or two later is out of date or irrelevant,” Rushton says.
The development of that master plan starts with defining the fan experience from driveway to seats and back for the ticket buyer across digital channels. The journey-mapping process helps identify different key customer personas, each with different needs that different technology can support.
As part of this mapping, IBM looks at different types of fan relationships. During a home game, a team has tens of thousands of ticket buyers in the building, but that’s a fraction of the millions of team fans engaging via other channels and formats. So a team’s overall engagement strategy should be designed for all phases of the team-fan relationship, which Rushton defines as:
- Rented Relationships: Fans of the team without a direct connection to the organization, such as television viewers and Facebook likes.
- Earned Relationships: Fans that the team has been able to “opt-in” to a more direct conversation, perhaps via emails, contests, merchandise, and other events.
- Owned Relationships: Fans that have become ticket-buying customers that the team needs to both retain and grow.
From there, IBM identifies the key foundational platforms, including mobile, social, point-of-sale, ticketing, and access control. These platforms almost always involve multiple third-parties, which is encouraged by IBM so that it can help teams identify best of breed options for their unique needs. This process keeps the fan at the center, as teams should be providing that fan a unified brand presence, regardless of what vendor is providing each service.
With platform choices made, it’s time to focus on the infrastructure needed for these platforms to succeed. It should be clear to everyone by now that connectivity cannot be looked at as a value-added amenity. Fans think of Wi-Fi and cellular coverage the same way they think of food stands and video boards – they are required.
“[Fans] expect to be able to upload their selfies, text their friends, or check their fantasy teams,” says Rushton. “They expect to have that level of connectivity, so how can you design a connectivity plan and backend system that keeps the fan accessible to the outside world and the inside world of the arena, stadium, or ballpark.”
Beyond fan expectations, teams need to also weigh the demands of all other coexisting, independent business systems. These other providers rely more and more on the quality of the venue’s connectivity in order for their products to deliver value to the property and the fans. If that infrastructure can’t hold up, everyone suffers.
To this end, IBM is rolling out a Passive Optical Network (PON) for Mercedes-Benz Stadium, the under-construction new home of the NFL’s Atlanta Falcons, that is entirely fiber-based, instead of copper, which allows the venue’s technology infrastructure to use less cooling, have a positive environmental effect, and take up less physical space. An all-fiber infrastructure provides maximum flexibility for future upgrades, since we all know the volume of data flowing through our buildings will only increase as the years pass.
The opening of a new venue or major renovation provides an ideal opportunity for this type of strategic technology process. It is a rare time to work from a nearly blank slate when redesigning a fan experience, which is why IBM has been involved heavily with the new Mercedes-Benz Stadium.
“We know that creating the ultimate fan experience means meeting fans where they are, providing them with the platform to interact in a seamless way, and introducing them to new offerings that exceed expectations,” says Rich McKay, President and CEO of the Atlanta Falcons. “IBM understands the commitment we are making to our fans and will help us reset the bar in terms of fan experience, technology, and sustainability for sports and entertainment complexes globally.”
However, venues of all ages also have to go through a steady stream of technology-related innovations, so there is always the opportunity to develop and refine a team’s technology and fan engagement strategy. For example, IBM has been an active partner with the US Open, Wimbledon, and the USGA over the years, and those relationships have had a strong emphasis on mobile technology and immersive, on-site fan experiences.
In my conversation with Rushton, I specifically asked him about how the premium customer fits into this process. We discussed two key elements that have extra weight for this audience: the increased value of relationships and higher expectations for the stadium experience.
Relationships matter for any customer segment. As someone whose background is heavily focused on CRM, I can vouch for this. But the impact of relationship building as it affects sales, retention, and referrals only escalates as the cost of the purchase grows. An organization’s technology strategy has a significant impact on the ability to collect, store, analyze, and act on customer data that can be used to develop deeper, personalized connections with premium customers.
“Because of the amount of dollars people are investing in premium, there is an expectation that that section of the stadium, ballpark, or arena is going to be upgraded continuously,” says Rushton.
Where IBM comes into play with its approach to both strategy and infrastructure is by making design and platform decisions that allow premium spaces to evolve faster without the need for custom-designed hardware or ripping physical systems in and out.
“You’re updating the application platform rather than having to update the electronics,” Rushton adds. This approach can have significant long-term cost savings that go along with higher customer satisfaction from suite and club seat holders.
The common theme throughout IBM’s approach is the idea of putting an organization and its staff in a better position to make better business decisions via technology and data. It’s not about servers and software, it’s about people and processes. Technology options will continue to evolve at a rapid pace, so we need to put ourselves in the right position to evolve along with them in order to succeed and create the optimal experience for every type of fan.