Write one page to summarize the research case study of "Business Analytics Helps Tame Data at Cincinnati Zoo"....
Millions of people visit zoos, museums, and similar venues each year, but many such attractions have been slow to realize the benefits of business intelligence. The Cincinnati Zoo is changing that with its pioneering installation of high-end analytics from IBM.
The so-called cultural industry-zoos, museums, aquariums, and the like-has been slow to take advantage of business analytics. That's surprising-and unfortunate-given that there are some fairly obvious applications for BI and analytics that can yield many quick and clear benefits.
The benefits of BI are being rapidly discovered by the highly rated Cincinnati Zoo, a top attraction in its area that draws 1.3 million visitors a year. With $26 million in annual revenue, 200-plus full-time employees, and another 220 part-time staff, the zoo was clearly ready to reap the returns of business analytics. A recent implementation of a point-of-sale (POS) system connected to a data warehouse, followed by high-end analytics software, is drawing interest from similar attractions elsewhere.
Meanwhile, the Cincinnati Zoo is clearly ahead of the curve when it comes to BI in zoos. For example, as simple as it sounds, it may be the first zoo in the country to launch a customer loyalty program, complete with bar- coded membership cards that can be scanned at points of purchase, then used to offer member discounts and other benefits.
With the brand-new analytics software (IBM Cognos 8) in place, zoo managers are "like kids in a candy store," according to John Lucas, director of operations. Right out of the gate, the software has moved the zoo from simple POS cash registers to using mobile phones for text message alerts when a zoo VIP or large donor arrives on the grounds, for example, or when beer is running low at a specific concession. Although the program has been in place only a few months, "we can do things that we never even dreamed of doing before," Lucas says.
For example, a weather database on the back end connected to the National Oceanic and Atmospheric Administration (NOAA) lets the zoo look ahead on Tuesday, when it orders soft drinks for the weekend, and see both the predicted weather and historical sales at the predicted temperature. The results mean orders can be based on real data, not gut feel. When it's going to be extremely hot, Lucas says, "we often find that intuition says to ramp up the bottled water supply, but the truth is that fewer people come out when it's that hot."
Realizing that its systems were behind the times, a year ago the zoo began looking for a better solution for tracking sales. Two of its primary goals were to continue to boost growing attendance numbers and to raise spending per guest. Lucas was convinced that with proper incentives, visitors could be persuaded to spend more. First, though, he and his staff needed information basic to any business ? what types of customers were spending how much and on what.
The zoo's existing systems left plenty of room for growth, Lucas candidly admits. The food concessions were still using simple, non-networked cash registers, for example. "We originally started looking just at how we collect data," Lucas says. "We were almost laughing at ourselves, running a $26 million system off cash registers," he said, adding that nothing communicated with anything else.
Although the zoo had collected a large amount of data from its pointof-sale systems over time (including number of visitors and records on some 100 million transactions over the years), management was still making decisions based on instinct. To change that, Lucas decided to integrate four different point-of-sale systems on the grounds, involving ticketing, retail, and food sales.
In July 2010, a product called Gateway Ticket Systems was introduced on the front end. The Gateway system offers point-of-sale ticketing software widely used by the cultural, amusement, transportation, and attraction industries. The system included a data collection component that sent sales information to a Gateway data warehouse called Galaxy. Then, in November, the zoo brought in IBM Cognos business analytics software on the back end for data analysis.
As with many similar entities, the Cincinnati Zoo has a tiny IT staff of just three, so it hired IBM business partner Bright S tar Partners, Inc., for the implementation. Bright S tar architected a data warehouse on top of the Gateway Ticketing System transactional database (the Gateway system was already in place when they arrived), then undertook the IBM Cognos implementation. The current system uses data from the data warehouse, which is updated nightly, for 90 to 95 percent of queries.
In a coming phase, some information will be obtained from the transactional systems directly for certain real-time queries. According to Andy Rachmiel, who is one of BrightS tar's owners and continues to work on the zoo project, the new software has been transformational for zoo management. "They have the ability to see data in ways they never had before ? even the simple things, like how many members bought a hot dog today," Rachmiel says. "For them, it's an amazing experience."
Loyalty Program
The loyalty program, once fully introduced ? it is an element of phase two of the rollout, which is just beginning ? will analyze buying patterns by collecting visitor ZIP codes at every transaction point. That information will be used to identify where low spenders come from, geographically speaking, then target loyalty programs toward them specifically. The fledgling program has already brought the zoo revenue gains and better, more strategic marketing spending.
"With the ability to drill down to the name level," Lucas says, "we can now directly market to specific people. It answers the age-old question: Who are your non-buyers? Once we know that, we can send them a targeted offer that compels them to buy."
The loyalty program will also allow zoo management to differentiate its marketing campaigns between zoo season pass holders (who make up half of the zoo's business) and nonpass holders (who make up the other half). For example, season ticket holders whose buying patterns show that they historically attend evening fundraisers at the zoo or spend on food and drink during zoo visits but don't visit the gift store can receive coupons that reinforce that spending pattern, rather than wasting efforts on incentives that promote items they don't purchase.
Also with phase two, real-time reports will warn when spending hasn't reached a set level at a particular location on the zoo grounds. For example, the zoo features six different brands of beer in its "zoo hut"; these are rotated based on sales volume and season. Using its analytics software, management will be able to quickly identify the best-selling beer on a given day and even time, enabling them to make sure that inventory meets demand. Previously, it took 7 to 14 days to get this information using part-time staff to cull the data from register tapes.
The system is easy to use because the dashboards and reports are accessed through a simple Web browser, so no client software is required. Staff members use Apple iPhones, so smartphone technology will allow text alerts to be sent to mobile devices (the Android operating system that is used on competing phones will soon be added as well).
Maps and charts are highly important to the zoo, Rachmiel explains, so Bright S tar has worked from the start to implement dashboards and reports that include them. For example, BrightStar worked with the Gateway data warehouse to integrate different data sources, including budget information from spreadsheets, actual information from the Galaxy database, and weather data from NOAA.
With the imminent rollout of IBM Cognos 10, richer dashboard functionality will allow increased integration of maps and charts. In addition, with Cognos 10, offline analytics capabilities will allow executives some limited functionality even when they are offline (such as on planes). Work on the data warehouse may eventually include federation, Rachmiel says, to allow inclusion of financial and order entry information.
"Amazing" ROI
The business analytics software is integrating operations as well as helping to drive new revenue. With the software in place for only a few months, the figures being made public for the project include an additional 50,000 visitors yearly and $350,000 a year in new revenue, but Lucas is confident that the revenue figure is very conservative. "We actually feel that that's grossly low," he says. "If we can motivate 50,000 new visits, at $10 to $12 each, that alone [exceeds projections]. ... It's all very measurable for us now."
The return on investment is so immediate that the zoo expects to recoup the software's cost in the first quarter of use ? a return that delights Lucas and that Rachmiel calls "amazing." Meanwhile, the system is drawing lots of interest from other attractions, especially zoos. Many of them have the same pain points, Rachmiel points out, and are highly interested in what the Cincinnati Zoo has done ? and with good reason.