Can a ‘Moneyball Strategy’ Help You Grow Your Business?

All the data you need to create separation from your competitors is there; are you using it?

Hi, I am Nick. I have several passions that drive me: Family, tennis, making beer, and analyzing data to help companies make better decisions. Mistakes in life and business often come down to a failure to understand the readily-readable patterns in data.

The question I always ask my clients is this: Are you using your data properly? My work prior to opening my own data analytics firm was to help my employers create the best circumstances for the growth of our market position. By running the numbers and looking at the data, we uncovered information that could strengthen the brand’s position.?

I can talk all day long about the intricacies of data, but I think a better approach would be to talk about some of the more famous and historically important cases.?

The decline of craft beer?

A few years ago, you might have considered brewing beer if you wanted to own a business. The craft beer revolution in the United States began a little over two decades ago, and until 2020 or so, it was for many who got involved a commercial and professional win.

For a while, it was simple: Brew a decent IPA, develop a cool name, colorful packaging, and devote time to expanding your style offerings. The business side of things was always important, but it didn’t require an MBA from an elite school to figure out that much of the world’s biggest economies had reached a saturation point for standard, mass-brew beer. Drinkers wanted a more artisanal approach and a complex flavor offering.?

Those days now look to be in the past. In a backlash to the explosion of styles, everything from IPAs to fruity, sour, wheat, rye, stouts, Belgian style, and so many more, consumers today are either moving away from beer or want simple, straightforward ones like the lagers against which they initially rebelled.?

But does this mean you should shutter your craft brewery or not follow through with your dream of being a small-batch brewer of excellent beers? No, not at all. It just means that you need to invest as much time on the business intelligence side as brewers formerly did on the taste and quality side.?

In 2023, if you want to get into the craft beer business or currently have a small brewery, consider the role that business analytics play in not just improving your market position but dynamically increasing the profitability of your brewery.?

Try the Moneyball Strategy for making your business buzz

Many might recall the six-time Oscar-nominated movie Moneyball, starring Brad Pitt and Jonah Hill. The strategy of Moneyball was simple. Paul DePodesta, working for the general manager, Billy Beane, of the Oakland A’s, created a formula showing that for the A’s to get to the playoffs, they needed to win 95 games.

Through the use of extensive analysis of data like runs scored, on-base percentage (OBP), runs-batting-in (RBI), steals, errors made on defense, batting average with runners in scoring position, and de-emphasizing the traditional big-ticket items like home runs and batting average, DePodesta was able to load the A’s with players most other teams had given up on. It was those players, though, that DePodesta showed could make the data sets sing, thus helping the A’s win.??

?The traditional metrics the A’s scouts and management were using showed that the team being fielded would most likely win a total of 80 games for the 2004 season. Beane gave DePodesta the green light to apply his evolutionary approach to the data of baseball. Despite waves of criticism from baseball insiders, the manager of the A’s, and the fans, the struggling A’s went on to win 20 games in a row and a total of 103 for the year. The A’s made the playoffs but lost to the New York Yankees.?

The Moneyball strategy so evolutionized the approach to how baseball teams were put together that within two years after the DePodesta experiment, the front offices of many teams were led by 20 and 30-somethings with economic and statistics degrees with little or no experience in baseball. Three teams that applied the evolutionary use of data analytics to assemble their teams, the Boston Red Sox, the Chicago White Sox, and the Chicago Cubs, went on to win their first World Series in 86, 88, and 108 seasons, respectively.?

Nowadays, most companies amass gigs of raw, unprocessed data (known as data lakes) and structured, processed data in what is called “data warehouses.”?

The collecting of data, however, is often not the problem that companies have. Similar to the DePodesta experiment and the Oakland A’s, which was then applied to many other teams, it isn’t a lack of data but a failure to properly analyze what they possess.?

The Moneyball strategy is nothing more than a clear articulation of the problem. The A’s needed to score more runs than they allowed. To do that, they needed to get players who, despite not being superstars, had a unique habit of getting on base and scoring.?

The guy who hits the home run is good for fans and his team, but at the same time, he actually might cost his team runs scored. Statistically, it is more likely the pitcher who gave up the home run will be removed from the game after the big hit. If the pitcher had remained in the game, his troubles might have led to a loading of the bases, and then anything could happen?—?a passed ball, a single scores two, and a grand slam results in four runs.?

Big beer uses data and craft brewers not so much?

The moment craft breweries started cutting into the bottom lines of the big commercial brewers, the bees in the hive woke up, and they emerged angry and determined to punish.?

Some of the biggest name craft brews in the United States are no longer craft or owned by the beer-loving entrepreneurs who started them. Through precise and careful data analysis, the marketers at AB InBev, Carlsberg, Miller-Coors, Heineken, Diageo, Kirin, and others assessed which brand would fit perfectly with their on and off-trade portfolios, and they acquired them by making offers that craft brewers couldn’t refuse?—?let us buy your brand or we will crush you with data analysis.?

Walking into a cool bar in Manhattan’s Lower East Side, you notice a slew of cooly-named craft beers and then mass-produced Heineken, Kronenburg, Moretti, and other tasteless, Heineken-style international lagers. Playing off of the emotions and hipness of those formerly craft beers, the Heineken monster increases the image of its commercially-oriented beer.?

Heineken is now in a partnership with Walmart, using data from how much time consumers spend standing before the beer displays in their stores. This creative and astounding use of data permits the brewer to manipulate shelf and in-store positioning to urge consumers to buy its beers instead of competitor ones. Small, true-craft brewers don’t have access to such data, and if they did, would they even be able to use it?

Try the Moneyball Strategy?

The Moneyball strategy of data analytics is something that business owners at both the early stages of their company’s operations can utilize as well as for marketers at growth level stages. A simplification of the task at hand permits a more clearly articulated understanding of the most fundamental problem the company suffers from: We need to increase beer sales at the point of purchase where profitability is highest.

Answer: Beer with the highest margins is served at the brewpub. How do we increase sales here?

Next, try to move beyond the data traditionally culled for business intelligence purposes and take a new look with a fresher perspective. Data shows that people don’t come to the brewpub as much because they don’t want to drink and drive.?

Business considerations: Can we run a shuttle from a large nearby neighborhood to pick people up? Or, make a deal with Uber or Lyft drivers to give discounts so people can leave cars at home? Can a beer delivery truck circulate through neighborhoods, delivering fresh tap beer for people while they stay home entertaining??

The data is there, folks; it’s just a matter of letting trained analysts sift through it to help you grow your business. Everything you need to know to overcome growth doldrums is locked away in your computers.?

Unlock it, get into and grow your business.?