Market research in Australia suggests that on average a business loses about 20% of it’s customers a year, and the majority of these are lost through dissatisfaction with the product and service offered. In order to retain these customers, a business must understand them better and take responsibility to ensure that this information is fed to the people who can implement improvements based on it. In addition to this, businesses spend on average 10 times as much getting new customers as it does retaining old ones. So how does this translate for the racing industry? In order for racing to understand its customers better, it first must know who they are.
These are the customers who pay to be a part of the industry. Without these customers, the industry will not continue to operate.
Owners – these customers own the racing product. They pay all the costs associated with providing the base product of the industry. They are rewarded for this via stakes money.
Punters – these customers use the racing product as a form of entertainment. They spend money with the reward of a return on this gaming investment.
Sponsors – these customers use the racing product as a form of advertising. They are rewarded by exposure to the public for their brand.
These are the customers who gain an income from being part of the industry. They provide a service to the external customers. Their needs include being able to complete their job to a level that encourages the external customers to continue to pay for their services.
Racing Australia (or State Principle Racing Authorities)
Other Service Providers (farriers, vets, trucks, etc)
The success of these customers is primarily reflected in the level of business that they attract and retain.
Benchmarks of success for external customers
To know when customers are being provided with successful service, some benchmarks need to be set. This also sets some basic expectations that these customers may have.
Owners – the easiest way to tell if owners are satisfied can be measured by looking at the number of horses racing. To talk about the number of owners can be misleading as many horses have multiple owners, and there seems to be trend towards more horses being syndicate owned. The number of horses racing in NZ has dropped by 10.7% from 1992 to 2003. This data points to owners being unsatisfied with the industry. This is hardly surprising when the cost recovery for owners has dropped from 42 cents (1970 McCarthy Commission Report) to 11 cents (2004 NZRB IER report). While these statistics point to a reduction in the number of horses raced, and much reduced cost recovery for owners, they do not tell us how many old owners are leaving the industry and are being replaced with new owners. This turnover rate of ownership would reveal more about the state of satisfaction that owners are getting from the industry, than the raw figures can suggest.
Punters – turnover is the best way to show if punters are happy with the service they are getting. Turnover on all forms of racing has increased by 9% from 1996 to 2004 (official TAB figures). However, when adjusting these figures for inflation using official NZ Govt figures, this becomes a decrease of 5%. To put this decrease into context, this would need to be analysed against the full gaming market – but on face value, the conclusion would be that racing is losing market share of the gaming dollar.
Sponsors – this can be measured by the level of sponsorship throughout the country and whether these sponsors a) continue to sponsor racing and b) increase the level of funding support.
So how does this relate to owners?
Owners are taken for granted in this industry, with the emphasis on the internal customers by the racing industry media. How often do we hear about the first group winner for such and such trainer, but little is heard about the owner of that horse. So how do racehorse owners ensure that they are getting proper customer service from the industry and from their service providers? This is most easily measured by measuring the service provided to owners by the industry’s internal customers. On an individual basis, owners should be asking themselves the following types of questions:
Is the communication from your trainer/syndicate manager regular and informative? Do you feel involved with your racehorse? Can you visit your horse when it takes your fancy? Are problems with your horse adequately explained by your trainer/syndicate manager? Is your opinion taken into account when a decision needs to be made about your horse’s future? Do you feel welcome when arriving on course to watch your horse? Do you feel that the costs you pay are justified and are in line with costs paid by other owners? Are the industry leaders doing enough to increase stakes money return to owners? Is it understood why owners become involved in the industry and how can those reasons be used to increase the level of ownership?
This is an old post from 2005.