The Effectiveness of CRM Approach in Improving the Profitability of Korea Professional Baseball Industry Measured by Entropy of ID3 Decision Tree Algorithm

Korea professional baseball industry has grown to take the lion's share of the domestic sports industry, but still does not make break even. The purpose of this study is to examine the financial impact of adopting the Customer Relation Management (CRM) approach on the profitability of Korea professional baseball industry. We use a measuring tool called entropy used in ID3 decision tree algorithm. In the paper, we specify five the most important factors that affect spectator satisfaction based on the previous literature, perform survey analysis, calculate entropy values, and find the results. We predicted the change in revenues when we adopt CRM by checking the spectators' willingness to pay more when the conditions of each factor are improved. We find that we can reap significant fruits of the effect of CRM introduction through enhancing 'game content factor' and 'game promotion factor' among the five factors. We also find that we can increase the revenues of domestic professional baseball teams to 2.4 times or 2.1 times the current level if we manage intensively those two factors respectively. It is very surprising to see that the improvement in total revenues makes both ends meet for domestic professional baseball teams. This clearly demonstrates the effectiveness of CRM approach in improving the profitability of organizations.