BUSINESS INTELLIGENCE - KNOW YOUR CUSTOMERS

Founded in 1873, the Cincinnati Zoo & Botanical Garden is one of the world's top-rated zoological institutions, and the second oldest zoo in the United States. It is also one of the nation's most popular attractions.

The Zoo's 71-acre site is home to more than 500 animal and 3,000 plant species. About 1.3 million people visit this zoo each year. Although the Zoo is a nonprofit organization, more than two-thirds of its $26 million annual budget is paid from fundraising efforts, and the remainder comes from admission fees, food, and gifts.

To increase revenue and improve performance, the Zoo's senior management team embarked on a comprehensive review of its operations. The review found that management had limited knowledge and understanding of what was actually happening in the Zoo on a dayto-day basis,

How many people visited every day and the Zoo's total revenue.

Who is coming to the Zoo?

How often do they come?

What do they DO And what do they buy?

Management had no idea. Each of the Zoo's four income streamsadmissions, membership, retail, and food servicehad different point-of-sale platforms, and the food service business, which brings in $4 million a year, still relied on manual cash registers. Management had to sift through paper receipts just to understand daily sales totals.

The Zoo had compiled a spreadsheet that collected visitors' zip codes, hoping to use the data for geographic and demographic analysis. If the data could be combined with insight into visitor activity at the Zoowhat attractions they visited, what they ate and drank, and what they bought at the gift shops the information would be extremely valuable for marketing.

To achieve this, however, the Zoo needed to change its information systems to focus more on an analytics and data management. The Zoo replaced its four-legacy point-of-sale systems with a single platformGalaxy POS from Gateway Ticketing Systems. It then enlisted IBM and BrightStar Partners (a consulting firm partnering with IBM) to build a centralized data warehouse and implement IBM Cognos Business Intelligence to provide real-time analytics and reporting

Like all outdoor attractions, the Zoo's business is highly weather-dependent. On rainy days, attendance falls off sharply, often leaving the Zoo overstaffed and overstocked. If the weather is unusually hot, sales of certain items such as ice cream and bottled water are likely to rise, and the Zoo may run out of these items. The Zoo now feeds weather forecast data from the U.S. National Oceanic and Atmospheric Administration (NOAA) Web site into its business intelligence system.

By comparing current forecasts to historic attendance and sales data during similar weather conditions, the Zoo is able to make more accurate decisions about labor scheduling and inventory planning. As visitors scan their membership cards at the Zoo's entrance, exit, attractions, restaurants, and stores, or use the Zoo's Loyalty Rewards card, the Zoo's system captures these data and analyzes them to determine usage and spending patterns down to the individual customer level. This information helps the Zoo segment visitors based on their spending and visitation behaviors and use this information to target marketing and promotions specifically for each customer segment. One customer segment the Zoo identified consisted of people who spent nothing other than the price of admissions during their visit. If each of these people spent $20 on their next visit to the Zoo, the Zoo would take in an extra $260,000, which is almost 1 percent of its entire budget.

Loyal customers are also rewarded with targeted marketing and recognition programs. Instead of sending a special offer to its entire mailing list, the Zoo is able to tailor campaigns more precisely to smaller groups of people, increasing its chances of identifying the people who were most likely to respond to its mailings. More targeted marketing helped the Zoo cut $40,000 from its annual marketing budget.

Management had observed that food sales tend to trail off significantly after 3 p.m. each day, and started closing some of the Zoo's food outlets at that time. But more detailed data analysis showed that a big spike in soft-serve ice cream sales occurs during the last hour before the Zoo closes. As a result, the Zoo's soft-serve ice cream outlets are open for the entire day. The Zoo's Beer Hut concession features six different brands, which are typically rotated based on sales volume and the seasons.

The Zoo's ability to make better decisions about operations has led to dramatic improvements in sales. Six months after deploying its business intelligence solution, the Zoo achieved a 30.7 percent increase in food sales and a 5.9 percent increase in retail sales compared to the same period a year earlier.

Q- Considering the chapter of business intelligence in mind, what different types of BI techniques and applications are used by Cincinnati Zoo & Botanical Gardens that produced value to the firm? Critically discuss by quoting examples from the case above and justify your answer?