Achieving 2023 Ticketing Goals: The Role of RM in the Sports and Event Industries
In the fast-paced and ever-evolving world of sports and events, Revenue Management (RM), or Yield Management, can play a crucial role in driving profits, maximizing revenue, and boosting occupancy rates. But what exactly is RM and how can it be applied to the unique challenges and opportunities of the sports and events industries?
In this article, we will take a closer look at the benefits of Revenue Management for sports clubs and event organizers, the technology and tools available to implement RM strategies, and the potential impact of emerging technologies such as Artificial Intelligence (AI) and Machine Learning (ML) on the future of RM in the sports and events industries.
Proven success of Revenue Management solutions
Revenue management is a business strategy that aims to optimize revenue by adjusting prices and inventory availability in response to market demand. It is a well-established practice in various industries, such as transportation, including passenger aviation, railway, and bus transit.
Revenue Management is generally based on forecasting demand, taking into account the customer profile and product type, to develop pricing strategies and adjust prices over time to meet commercial goals. In the airline industry, Revenue Management Solutions (RMS) are used to manage flight capacity and optimize revenue by adjusting ticket prices in response to demand, taking into account various variables such as peak travel times, previous year’s booking history, distance, travel time, and competitive pricing.
Wiremind, global leader in Revenue Management, has been developing cutting-edge solutions since 2014, including its product for the transportation industry, CAYZN. This system is comprised of several key modules:
- A real-time dashboard visualization that enables the monitoring of performance metrics and manual adjustments.
- An alerts and business rules engine designed to identify specific cases and automate certain use cases.
- A forecasting and optimization module that leverages Machine Learning models and Artificial Intelligence algorithms.
For many years, Wiremind has been providing its CAYZN system to major international transportation companies, including SNCF (France), VR (Finland), SJ (Sweden), MTRX (Sweden), DSB (Denmark), OUIGO (France), BlaBlaCar (France), and many others, enabling them to optimize their commercial performance with revenue gains of 5-15%.
How is this increase in revenue achieved? The role of RM is to play with the price elasticity of demand. In some cases, where demand is very high and price sensitivity is low, the goal of RM will be to increase prices to secure the expected revenue. In other scenarios, for example on trains that tend to be poorly filled, price elasticity may be more important. Here, RM will be more likely to offer lower prices, to play on volume, with the virtuous effect of obtaining higher revenue, by having brought more passengers on board.
Wiremind’s solution, CAYZN, offers advanced configuration options that allow an organization to define its commercial strategy with great precision. Specifically, if a company prioritizes revenue growth based on a volume strategy and therefore low prices for the end customer, or, on the contrary, if it prioritizes rationalizing its transport offer while maintaining its revenue, CAYZN easily enables the desired goal to be achieved.
Such practices and solutions have already proven themselves in the aforementioned industries. How could an equivalent Revenue Management solution like CAYZN help sports clubs and event organizers optimize their revenues and filling of their stadiums and halls?
Adapting RM strategies to the unique demands of the sports and events industries
It’s crucial to highlight that there are numerous similarities between the transportation industry and the sports and events sector. Both involve optimizing a finite capacity, equivalent to a set number of seats. Just as with transportation, there may be multiple classes or categories of seating, although, in practice, a sporting venue or performance hall may have more categories than a plane, train, or bus. And similar to transportation, there are multiple products with specific features and sale conditions.
Given this, there is no reason to believe that RM cannot bring significant gains to the sports and events sector, whether it is to increase revenue or occupancy rates of a sporting venue or performance hall, much like what the transportation industry has experienced over several decades. Hence, Revenue Management presents a unique opportunity, especially since the revenue generated from ticket sales and matchday is a significant part of their overall income.
Of course, the industry has its own unique complexities. Ticket demand can vary greatly based on factors such as the popularity of the team or event, recent performance, time of year, and weather conditions. In some cases, tickets are sold last minute, making it difficult to predict demand and adjust the pricing accordingly.
Ticket sales can fluctuate based on team performance, making it challenging for clubs to predict demand and set pricing, leading to potential revenue loss. Concerts or festivals also come with their own set of challenges, with tickets being sold far in advance, potentially increasing closer to the event, complicating inventory and pricing optimization.
Furthermore, the diversity of events, their nature, and their location also have a significant impact on sales. An international artist’s concert in a large stadium will have a different demand than a small-capacity theater play. Similarly, a major football match in a large stadium will have different demands compared to a local football match. In this context, it is difficult to define pricing strategies that take into consideration all these factors.
To address these challenges, relying on advanced Revenue Management is a major advantage in helping clubs and event organizers optimally manage their ticketing revenue. By leveraging a robust product that operates in real-time with performant visualization and architecture compatible with cutting-edge Machine Learning and Artificial Intelligence prediction models, event capacity can be spectacularly optimized.
Overview of the core RMS features
As previously noted, the demand for RMS has seen a significant rise among sports clubs and event organizers. However, choosing a Revenue Management System for your organization can be challenging as the available options are limited, and it can be difficult to identify the best fit in terms of technology and tools.
Let’s take a look at the key features of these solutions and how they can benefit your organization:
- Data Visualization: A robust RMS offers real-time sales tracking and forecasting, easy-to-analyze performance indicators, and efficient data visualization through a streamlined workflow, enabling quick and effective decision-making.
- Efficient Data Flow: Consolidation of data is a key asset, providing the organization with powerful data extraction capabilities, allowing for a better understanding of customers and the performance of different events.
- Sales Forecasting: With statistical models based on the previous year’s data, the tool predicts the potential demand for an event, based on various parameters such as seasonality, attractivity, and others.
- Price adjustment: Whether manual or automatic, the ultimate goal of an RM tool is to adjust prices at the right time to increase the revenue and occupancy rate of a venue or sports arena.
Wiremind’s Competitive Advantages: A revolutionary solution for the sports and event industry
With a track record of success in the transportation industry, thanks to its unique expertise in Product Design and Artificial Intelligence, and its unparalleled positioning at the intersection of the transportation industry and the sports and events sectors since its collaboration with Paris Saint-Germain in 2019, Wiremind introduces EVENTORI, its latest offering in 2022.
EVENTORI is a ticketing solution featuring an integrated native Revenue Management system, equipped with industry-proven knowledge from its historical roots and tailored to the specificities of the sports and events industry, allowing players in this industry to finally benefit from proven techniques.
Wiremind’s solution offers numerous benefits for sports clubs and event organizers. By using EVENTORI, it is possible to optimize revenue and capacity, but more broadly it is a streamlined and optimized ticketing solution in all aspects. In particular:
- EVENTORI is equipped with all the classic event sales modules (back-office to define products, rates, and prices; B2C website, a payment module, ticketing module, access control, and others).
- It allows real-time tracking of ticket sales, as well as sales forecasts until the day of the event, to make data-based decisions and identify optimization opportunities.
- The solution is built on a data model and architecture that is immediately compatible with the most advanced RM and AI techniques.
- EVENTORI is equipped with a set of optimization algorithms that aid in making relevant and effective decisions, leading to increased ticket sales and associated revenue.
- It records data on customer behavior and preferences, which can be optimally utilized with other modules related to commercial performance (CRM, secondary market, queue management, and others).
Wiremind’s EVENTORI is already proving to be one of the most advanced optimization and distribution systems currently available on the market. As a comprehensive solution for sports clubs of all sizes and event organizers seeking to implement RM strategies, EVENTORI offers a wide range of features to help improve performance and maximize revenue and occupancy rates.
It’s worth noting that implementing Revenue Management solutions can also present challenges and obstacles, which EVENTORI has the advantage of overcoming.
Overcoming the challenges of implementing Revenue Management Solutions
The implementation of an RMS is faced with the challenge of securing the quality and quantity of data. The effectiveness of Machine Learning models relies on the availability of substantial and accurate historical data. In the absence of such data, making effective predictions becomes a challenge and affects the implementation of pricing strategies and inventory management. To mitigate this, it is advisable to streamline interfaces between different systems and centralize data to a single source.
Another major obstacle lies in integrating the RMS with existing systems and software. The sources of data are diverse and building accurate predictive models requires considerable effort and resources. The setup and maintenance of such a complex process need a significant amount of time and resources. A centralized system approach proves to be a critical factor in overcoming this challenge.
Solutions like Wiremind’s EVENTORI can help overcome these challenges by providing teams and organizers with a 360° solution that includes a common database for storing and analyzing data, as well as an advanced Revenue Management solution based on unique knowledge in the sport and event industry. With this type of solution, teams and organizers can easily integrate different systems and workflows to gain a more comprehensive view of their operations, and make data-driven decisions to optimize pricing and inventory management.
The future of RMS for sports and events sectors
The sports and events industries are evolving, and Revenue Management is becoming increasingly important in helping clubs and organizers optimize revenue and improve the overall customer experience. Advancements in technologies such as Artificial Intelligence and Machine Learning are driving this trend. These technologies have the potential to revolutionize the market by providing the tools like EVENTORI to make informed and effective decisions.
AI and ML have numerous applications in the sports and events industry, including predictive analytics and digital ticketing. Predictive analytics analyzes customer behavior, ticket sales, and other factors to predict future demand and adjust prices and inventory accordingly. Digital ticketing uses technologies such as blockchain and QR codes to create secure digital ticketing systems, reducing fraud and improving customer satisfaction.
Having a Revenue Management module within an integrated ticketing ecosystem opens up the potential for advanced interactions with other modules within the ecosystem. The interconnectivity with a resale module, a CRM, or even on-site sales management during an event elevates the capabilities to a new level.
It’s possible to estimate gains from resold tickets, incentivize resales through targeted communication campaigns for high-yield seats, predict flows and consumption at event venues, and shape pricing strategy on a much larger scale beyond direct ticket sales. The possibilities are endless.
RMS within reach for everyone
In conclusion, Revenue Management has proven its worth across various industries and can provide sports clubs and event organizers of all sizes with valuable market demand insights to adjust prices accordingly. An advanced RMS like EVENTORI can help boost revenue, increase occupancy rates, and improve customer experience.
With the advent of 360° systems like EVENTORI that combine classic ticketing modules with advanced optimization capabilities, the added value of Revenue Management is within reach for everyone, and the benefits of cutting-edge technologies like Artificial Intelligence and Machine Learning are poised to revolutionize the way professional sports clubs and event organizers optimize their business performance.