Saturday 15 February 2014

How to Transform a Racecourse – What Advice Would You Give the New CEO at Newbury?

Had a really enjoyable day’s racing at Newbury last week on their Betfair Super Saturday. The personal highlight was being the guest of the Directors in the Royal Box for lunch and afternoon tea. They were kind enough to extend this invitation as an apology for the problems my wife and I encountered back at the Hennessy meeting due to their ill-advised dress code. You certainly get a very different picture of a racecourse through this privileged prism. I was also very lucky in being seated next to the Kimminses, who organise the Bob’s Worth partnership, and it was fascinating to hear about their life-changing experiences with this fabulous horse.

As you may know, Newbury has a new chief executive in Julian Thick, the former MD of Aintree, and he clearly has quite a challenge on his hands. I don’t in any way want to appear ungrateful to my luncheon hosts, and therefore the rest of this blog should be seen as a positive contribution. Newbury really ought to be one of the UK’s absolutely top tracks and yet I think it is now widely regarded as being a racecourse with serious problems. Indeed, on the At The Races’ Sunday Forum, the pundits including Alastair Down of the Racing Post and Alan Lee of The Times were discussing what they described as a “lacklustre” race day, not living up to its “Super Saturday” tag; as a course which has “lost people’s affections”; where the “rebranding is ridiculous” and there have been “loads of bad decisions in the past”. Their conclusion was that “something needs to be done”. No sitting on the fence there. It is also a course where attendance, and therefore revenues, are declining. Indeed, Alan Lee felt that without the injection of cash from the property development now under way, it is a course that “would be under threat of disappearing”.

So what would you do about it if you were the new CEO? As someone who could be described as “once a management consultant, always a management consultant”, here are a few of my thoughts.
  1. Strengthen the management team: I have always had a view that “ships sink from the bridge”. Any unsuccessful business needs to make big changes in its leadership team. That is clearly recognised, hence Julian’s appointment. But it shouldn’t stop there. Build a different board structure. It could do with sharper accountabilities and a much stronger focus on modern marketing and customer acquisition and retention. Slim the board down. Change the governance. Set transformational goals.

  2. Access high-quality advice: I would make this a centrepiece of a new governance structure. Have an executive and an advisory board, with different people in each. For the advisory board, select specialist advisers representing the different stakeholders in racing. Break away from the “traditional and tweedy” views that predominate at the moment.

  3. Harness the current strengths: Newbury is much better at National Hunt racing than it is at the Flat. In the Hennessy and the Betfair (former Schweppes / Tote Gold Trophy) it has two of the strongest races in the calendar, as well as two excellent brands connected to the course. As anchor races / brands, they ought to provide real strength to bring in complimentary top-class sponsorship. Why not build the Hennessy around luxury premium brands and the Betfair around betting innovation? 

  4. Revamp the failing Flat: the Greenham and the Lockinge ought to be much better races and meetings. At the moment they appear as second-tier events. Both could do with massive injection of additional prize-money and links to the next generation of sponsors, particularly if there is an even stronger Middle Eastern presence.

  5. Be a technology leader: on the last blog there is a strong recommendation for a complete rethink of and investment in internet betting and social media. Why not make Newbury the showcase for all of that? Tune in to the advisers who can guide such a strategy.

  6. Leverage Lambourn: just think of all the magnificent trainers and horses within 30 miles of Newbury. After all it is the second-largest training centre in the country, and many would argue that Newbury is one of the best and fairest courses around. How can this best be exploited?

  7. Learn to love customers again: I’ve argued in earlier blogs this year that there is a tremendous need for modern marketing and selling strategies to be introduced that concentrate on securing, building and sustaining the right relationships across many customer segments. Stop antagonising them and begin nurturing them again.
  8. Reorganise the different stands: rather than having an arbitrary dress code, why not encourage different customer groups / types to frequent different stands, with different badges and pricing. Try to build premiumisation into at least one stand – and make that a really great experience.

  9. Change the pricing accordingly: have a complete range from genuine premium pricing through to free entry in at least one stand. Encourage local people to come along with their families and stop pricing them out of the sport.

  10. Boost the prize-money: despite some races with very large prizes, the overall level of prize-money has dropped dramatically over the last decade. A Grade 1 track should have genuinely Grade 1 prize-money. Make it an unmissable destination. Start with a really valuable “consolations day” straight after the Cheltenham Festival. 

Phew. That’s my starter for ten. What would you recommend? All views welcome.

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.

Saturday 1 February 2014

What Should Racecourses Do to Increase Attendance, Boost Revenue and Encourage Positive Customer Behaviour that Enhances Everyone’s Experience of and Pleasure in Racing?

Today’s blog follows on from a three-part series I did after Newbury’s Hennessy Day denim débacle (regular readers know how much I like alliteration), when they managed to antagonise lots of customers – including my wife. Very much a PR fiasco. Whether or not it led to the sacking of the former joint MD Steve Higgins is not known, but they now have a new and much more experienced CEO in Julian Thick (former MD of Aintree). As I also flagged up in the last blog, Newbury, like most racecourses in the UK, is facing many financial challenges as well as declining attendances.

Indeed, as I put pen to paper (or more accurately, fingers to keyboard), I’ve just read that the Racecourse Association has gloomily reported that over the last ten years, the average raceday attendance has dropped by 1,000. While that doesn’t sound a lot, it certainly does when you put it into the context that on most race days there are 5,000 or fewer attendees, so it is a 20% decline in an increasingly competitive sport and leisure marketplace where customers have a range of opportunities to spend their hard-earned.

Since Hennessy Day, I’ve probably had more discussion with owners around this subject (all triggered by the denim disaster at Newbury) than any other. Obviously there are no magic bullets, and it is a very challenging area, but here is a summary of views.

  • Offer an exciting product. Alas, it certainly looks as though there is far too much racing in the UK, with a lot of it complete dross. It may make money for certain courses, and put money into the bookies’ satchels, but at a risk of fundamentally eroding both the integrity of racing (most of the scandals occur in Class 6 races on the all-weather) and its aura of glamour, panache and excitement. What should change over the next ten years?
  • Keep and foster your customers. No business can afford to lose customers. It is much harder to acquire new ones than retain the ones you already have. Irritating, antagonising or offending them through poor service, bad racing, ill thought-out initiatives or just simple neglect is inexcusable. Do racecourses have really effective customer retention strategies?
  • Know who your customers are. In my consulting career, when I worked for fmcg companies as Diageo and Reckitt Benckiser, I was impressed by the quality of their marketing and the incredibly detailed analysis of what, in the jargon, is called “customer segments”. They weren’t just selling to “drinkers” or “householders”, but to literally hundreds of different types of people, backgrounds, ages and preferences. Huge investment was made in differentiated sales and marketing campaigns aimed at these well-defined segments. Do racecourses have such modern and professional campaigns mapped out? I’d love to see one. Indeed, a few years ago there was a woefully pathetic stereotyping of racegoers into a “Bill and Ben” type of categorisation, “Bill” being the old-fashioned racegoer vs. “Ben” as the trendy adherent of social media – a fatuous and totally inadequate segmentation. 
  • Invest in modern marketing. This naturally follows. I’m sure there are some brilliant marketing people in racing, but I haven’t come across many. The few I have met at racecourses have been distinctly ordinary. A few questionnaires and a bit of direct mail doesn’t cut the mustard. How do racecourses select and remunerate their sales and marketing staff? I fear, poorly.
  • Invest in frontline staff training. Friendly, well-informed, professional and helpful staff hugely enhance the racecourse experience, while their opposites detract from it. The “best” racecourses in the UK seem to get this right, but alas they are definitely in the minority. I’ll do some more blogs on this subject. All too often the staff are boorish, ignorant and unhelpful. During the Newbury débacle I just about lost patience with staff who hid behind responses such as “It’s the new rule, and there’s nothing I can do about it”. How much investment is made in racecourse staff training? If staff behaviour and training is compared with, say, the leading leisure businesses such as Disney, what conclusions would you draw? I fear the answer would be that far too many of the people employed on racecourses are just not up to the job. 
  • Sort out the bars. This is a good example of frontline failure. Amateurish bar staff and completely inadequate routines for serving drinks very quickly is the norm at racecourses. How many times have you heard racegoers complaining while desperately trying to get served between races? Substantial income is lost and customers irritated.
  • Sort out the stands and facilities. All too often, racecourses are a strange mish-mash of different stands and facilities that lack any consistent identity, where very different types of customer with different needs collide. If there are different segments, there are clearly different requirements in the various facilities. I have no problems with courses such as Newbury trying (with apologies for the jargon) to “premiumise” their product, but that needs to be done in a way that strongly reinforces both the product and the behaviour that you are trying to engender. At a personal level I love Newbury’s Wine Vault, but then why have second-rate, very loud live music immediately adjacent to it?

That’s it for the moment. I’m very aware that I’ve done no more than scratch the surface. Future blogs will pick up some of these issues in more detail. In the short term, though, I’m looking forward to discussing some of this with Julian Thick and his co-directors at Newbury on what I’m hoping will be a superb day’s racing, Betfair Super Saturday, 8th February. 

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.