IBM Software Business Analytics Business Value Outcomes Cincinnati Zoo transforms customer experience and boosts profits IBM Business Analytics creates more than $2.2 million in total benefits, delivering full ROI within three months Strategy Executive Overview Client Profile The Cincinnati Zoo & Botanical Garden is one of the nation’s most popular attractions, a Top 10 Zagat-rated Zoo, and a Top Zoo for Children according to Parent’s Magazine. Each year, more than 1.3 million people visit its 71-acre site, which is home to more than 500 animal and 3,000 plant species. Although the Zoo is a non-profit organization and is partially subsidized by Hamilton County, more than two thirds of its $26 million annual budget is generated through its own fundraising efforts cincinnatizoo.org Business Objectives • Increase attendance and revenues by enhancing the customer experience for each visitor • Boost sales for food and retail outlets through more effective marketing and promotions • Optimize labor costs by gaining a better understanding of demand patterns throughout the year • Implement a Business Analytics platform to support its transformation program and ongoing zoo management Cincinnati Zoo takes pride in the fact that it has the lowest public subsidy of any zoo in Ohio and generates more than two thirds of its $26 million annual budget through its own fundraising efforts. In challenging economic conditions, the Zoo wanted to reduce its reliance on subsidies even further by increasing visitor attendance and revenues from secondary sources such as membership, food and retail outlets. This would secure the Zoo’s future and enable it to continue its pioneering work in conservation, preservation and research. The Zoo’s senior management surmised that the best way to realize more value from each visit was to offer visitors a truly transformed customer experience. By using business analytics to gain greater insight into visitors’ behavior and tailoring operations to their preferences, the Zoo expected to increase attendance, boost membership and maximize sales. Focus on Business Impact The Zoo’s executive committee began by defining the desired outcomes from the business analytics initiative in business terms, and then decided how best to accomplish them. The key areas were the ability to analyze membership, admissions, food and merchandise sales down to the individual level, in order to understand visitor behavior. It was also important to be able to analyze geographic and demographic information to aid customer segmentation and marketing. The Zoo worked to create a business analytics platform that was capable of delivering the desired goals by combining data from ticketing and point-of-sale systems throughout the Zoo with membership information and geographical data gathered from the ZIP codes of all visitors. This enabled the creation of reports and dashboards that give everyone from senior managers to Zoo staff access to real-time information that helps them optimize operational management and transform the customer experience. IBM Software Business Analytics Business Value Outcomes Business Value Outcomes Business Benefits • Provides a 360 degree view of customer behavior that helps to optimize marketing decisions, resulting in savings of more than $40,000 on marketing in the first year, while driving enhanced and measurable results • Saves the Zoo more than $100,000 per year by identifying less effective promotions and discounts, allowing resources to be redeployed to more productive initiatives • • • A Nucleus Research ROI study reveals that by adapting operational management to match customer demand patterns, Cincinnati Zoo has been able to increase attendance and revenues dramatically, resulting in annual ROI of 411 percent. The business analytics initiative paid for itself within three months, and delivers, on average, benefits of $738,212 per year. Return on Investment Summary Annual ROI: 411% Payback period: 3 months Increases overall attendance, prompting at least 50,000 new “visits” in 2011 through enhanced marketing Provides insights that enhance operational management – for example, that ice cream sales peak just before closing time, leading to a decision to keep more ice cream stands open until the Zoo closes. This boosts revenues by as much as $2,000 per day in summer Contributed to a more than 25 percent increase in food sales and a 7.5 percent increase in retail sales compared to the previous year “You need to start from the business end and use technology to solve the problems, instead of putting a technical capability in place and then deciding what to do with it. I honestly don’t believe that any organization will get optimum value from a business analytics project unless they approach it this way.” — John Lucas, Director of Operations, Cincinnati Zoo & Botanical Garden Average annual benefit: $738,212 Total Three-Year Benefits Direct Indirect Total $1,904,587 $310,049 $2,214,636 Indirect 14% Direct 86% Source: Nucleus Research ROI Case L72 – IBM Business Analytics, Cincinnati Zoo Deeper Insight The business analytics solution has given Cincinnati Zoo a better understanding of why customers visit the Zoo, how they behave during their visit and what they spend money on. This has driven dramatic improvements in effectiveness of food and merchandise sales and labor planning, as well as enabling much more effective marketing on a significantly reduced budget. Direct Benefits • • • • The Zoo has seen a 4.2 percent rise in ticket sales by targeting potential visitors who live in specific ZIP codes. Food revenues increased by 25 percent by optimizing the mix of products on sale and adapting selling practices to match peak purchase times. Eliminating slow-selling products and targeting visitors with specific promotions enabled an 18 percent increase in merchandise sales. Cut marketing expenditure, saving $40,000 in the first year, and reduced advertising expenditure by 43 percent by eliminating ineffective campaigns and segmenting customers for more targeted marketing. Indirect Benefits • Avoided adding headcount by automating the creation of reports and analyses. The Zoo has been able to increase the volume and frequency of reporting considerably without hiring new staff. It has also eliminated considerable manual reporting workload for the Zoo’s director of operations and managers of food services, admissions, merchandising and fundraising. 2 IBM Software Business Analytics Best Practices Business Value Outcomes Solution Review Once Cincinnati Zoo had selected a business analytics platform to support its transformation program, the project team – which consisted of consultants from IBM and BrightStar Partners, as well as senior executives from the Zoo – began translating the organization’s goals into technical solutions. • The project was initiated and driven by board-level managers, making its success a top priority for the Zoo, and making it easier to drive cultural change throughout the organization • The project committee defined measurable target outcomes and set clear goals, which kept the focus on creating operational capabilities rather than delivering technical solutions • Working in partnership with BrightStar Partners and IBM, the Zoo ensured that all three organizations understood and committed to this goal-oriented approach The initial phase of the project involved the replacement of four separate legacy point-of-sale systems with a single platform to provide data on all admissions, membership, retail, and food service sales. Once this was in place, the project team began developing a data warehouse and a set of cubes to enable rapid analysis of point-of-sale data, geographic data, membership lists and inventory. To harness this data, the team created operational reports, and business users were able to create and edit their own dashboards and manage their workspaces. “In our business case for Cognos, we forecast about a five percent increase in food sales, and we would have been more than happy with that. 30 percent is just incredible!” The solution has now been in use for more than 14 months, and provides insight into a number of key areas of the Zoo’s operations. One important example is attendance. Like all outdoor attractions, the Zoo is a highly weather-dependent business. By integrating weather forecast data, the Zoo is able to compare current forecasts with historic attendance and sales data, supporting better decision-making for labor scheduling and inventory planning. Another area where the solution delivers new insight is food service. By opening food outlets at specific times of day when demand is highest (for example, keeping ice cream kiosks open in the final hour before the Zoo closes), the Zoo has been able to increase sales significantly. — John Lucas, Director of Operations, Cincinnati Zoo & Botanical Garden Through insights like these, and the operational optimizations that have resulted, the Zoo has been able to achieve total savings of nearly $2.2 million since the launch of the business analytics solution. About BrightStar Partners BrightStar Partners, an IBM Premier Business Partner, is a technologybased, global IBM Business Analytics consulting and software development organization. BSP helps its clients improve their business performance through maximizing their investment in technology and processes to drive better information throughout the enterprise. With broad technical and business experience, BSP helps clients realize the benefits from their reporting, analysis, dashboarding, data warehousing, planning and consolidation solutions to drive true business value. About Nucleus Research Nucleus Research provides investigative, case-based technology research and advisory services. Nucleus analysts investigate hundreds of deployments every year to deliver unique insight into the measurable value of technology. Founded in 2000, Nucleus Research is headquartered in Boston MA and provides services worldwide. 3 Solution Components Software • IBM Cognos 10 IBM Business Partner • BrightStar Partners, Inc. “We enjoyed working with Cincinnati Zoo to provide them with the tools to unlock such profound value. Their industry-leading stature in the zoo industry has also enabled other attractions throughout the US to discover the opportunities to fuel their missions through the application of business analytics.” — Neil Morgan, President, BrightStar Partners About IBM Business Analytics IBM Business Analytics software delivers actionable insights decisionmakers need to achieve better business performance. IBM offers a comprehensive, unified portfolio of business intelligence, predictive and advanced analytics, financial performance and strategy management, governance, risk and compliance and analytic applications. With IBM software, companies can spot trends, patterns and anomalies, compare “what if” scenarios, predict potential threats and opportunities, identify and manage key business risks and plan, budget and forecast resources. With these deep analytic capabilities our customers around the world can better understand, anticipate and shape business outcomes. For more information For further information or to reach a representative please visit ibm.com/analytics. Request a call To request a call or to ask a question, go to ibm.com/businessanalytics/contactus. An IBM representative will respond to your inquiry within two business days. © Copyright IBM Corporation 2012 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America March 2012 IBM, the IBM logo, ibm.com, and Cognos are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. Please Recycle YTC03380-USEN-00
