Today’s guest columnist is Chris Reynolds, co-founder and CEO of Epoxy.ai.
Whether it’s our searches in Google, our purchases in Amazon or the automated playlists created for us on Spotify, consumers love and expect personalization, and businesses rely on it to create differentiation and drive revenue.
A recent study by McKinsey & Company stated that “71% of consumers expect companies to deliver personalized interactions. And 76% get frustrated when this doesn’t happen.” More important, “companies that grow faster drive 40% more of their revenue from personalization than their slower-growing counterparts.”
Yet when people think about sports, the majority doesn’t think about technology. Sports, however, is one of the fastest growing and most diversified areas in the tech sector, and like other technology businesses, personalization will be an essential part of the fan experience.
Personalization has been slow to manifest itself in the sports-fan experience. This isn’t due to lack of interest. In fact, personalization is a priority for the leagues, media entities and gambling operators. But delivering personalized experiences at scale is really hard, especially in the global sports industry.
Almost overnight there has been a seismic shift in how people consume sports, as rights are licensed across a broadening array of distribution platforms, and consumption of sports becomes more elastic, with fans bouncing back and forth frantically between media.
In 2018, the U.S. sports landscape changed when sports betting became legalized, creating significant economic and fan engagement opportunities. In an attempt to move quickly, U.S.-based gaming operators licensed mature sports betting technology and experiences from international gaming companies. Unlike the rest of the world, though, where people grew up with sports books on every corner and online gambling is a way of life, sports betting was literally thrust into the U.S. customers’ hands with little to no understanding, education and/or trust. The initial failure to account for this cultural disparity has complicated product roadmaps, forced operators to spend freely on customer acquisition, and stifled differentiation at the end user level.
We know that the personalization of sports experiences works and drives key business metrics, but for the majority of sports businesses and betting operators, personalization is not a core competency.
We lived this first-hand when a sports engagement platform company I helped build, OneTwoSee, was acquired by Comcast in 2016. Comcast has always held a leadership position in sports rights but struggled to build its own form of scalable personalization and fan engagement technology.
After the acquisition, our team was tasked with using our expertise and technology to help acquire, retain and extend the sports fan customer base. We went on to successfully drive customer lifetime value, sports consumption and customer satisfaction by integrating services like daily fantasy, team and sport favoriting alongside personalized content within the xfinity interface. We relied on three key tenets to achieve these goals: Understand, Personalize and Connect the user.
These same three key tenets are the foundational building blocks of our new business, Epoxy.ai. We leverage our AI and machine learning platform to provide our partners with the ability to better understand their users, deliver recommendations and connect their users to the content they desire when they want it.
We built our platform and API services to accommodate key product and business requirements for fan engagement and personalization. We partner with betting platforms, MVPDs, and data- and cloud-service providers.
The early results are promising. Working with one of our partners, betParx, we are proving our thesis that personalization is critical for success, especially in the highly competitive sports betting industry. Over 25% of the betParx user base has clicked the “Sparx” personalization button and come to its portal. Of that 25%, almost 80% of users return to the “Sparx” portal each week, showing that even without promotion, the retention remains very high. And as important, on average, the users increased their number of bets per session.
So how do rights holders, media and sports betting companies go from where they are today to becoming the habitual destination for fans?
It takes time, so start now and start small. As I mentioned earlier, customers expect personalization. Companies that embrace this tenet will have a distinct market advantage. Second, adopt a culture of exploration, and do not be afraid to make mistakes. Finally, focus on what you do best as a company, and leverage external expertise and technologies where you can to accelerate product roadmaps.
Personalization is a compound interest investment in a customer, and it will pay off exponentially over time.
Epoxy.ai is an AI/ML-based sports personalization technology company providing tools that help leagues, real money gaming operators and media companies develop new forms of customer acquisition, engagement and retention. Prior to founding Epoxy.ai, Reynolds was the vice president of OTT products and services at Comcast, and the co-founder of fan engagement platform company OneTwoSee.
