Some of you might have read the USA Today Network story about horse racing this week. The piece highlighted some pretty impressive statistics related to the broadcast and marketing of the limited racing calendar we've all been experiencing.
One quote caught my eye: “NYRA chief revenue officer Tony Allevato said it had signed up seven times the amount of people over the past three weeks than the rest of the year combined.”
This is clearly good news for NYRA Bets – and it is surely happening at other ADWs like Xpressbet, TVG, Twinspires and DRF Bets – but being completely honest, these numbers should be expected. People are looking for things to do at home, and signing up for an ADW account (or activating a dormant account) fits like a nice, snug glove.
I feel, however, it's important to note that while racing has been fortunate (it's silly to use such a word in a crisis, I know) over the last two months, these new customers were not earned. And customers who fall into a lap usually fall out of one in a hurry.
What can the industry do to capitalize on this serendipity? What can it do to gain more customers during the crisis, and hopefully hold on to them when it's over?
Invest in Demand Generation
During the recession of the 1970's, with lines at the gas pump and no one buying pretty much anything, car makers immediately cut their marketing budgets; well, all except one – Toyota, which was a middle-of-the-road importer with little market share. By 1976, Toyota surpassed VW as the number one imported car in America, and currently sits at number two overall, just behind Ford.
During the COVID crisis, marketing dollars have been obviously pulled, but smart companies are still spending in one main area – demand generation. And much of this spend is at depressed prices.
According to eMarketer, (via a White Paper from Acquisio.com) social media marketing spend is slated to be down 45 percent; this with Facebook having massive inventory available, with a huge increase in users during COVID. That's one example of many.
If the sport wants to focus on demand generation, there's no time like the present.
'We're in This Together'
We've heard those words a lot lately, and I believe it's important for racing to walk that walk.
What can your track do in tandem with other tracks differently to present a better betting product?
Can you share your data across the sport? What's working for you on new customer acquisition? Have you surveyed new customers? If not, why not? What do they want, what do they respond to?
With collaboration and shared data, racing can chart a better, more data-driven path forward and the customer retention tactics learned could serve the entire sport well post-COVID.
Introduce Daily Rebates
OK. You've got new customers, but they're all going broke faster than the hopes of the NBA finishing a season. Let's not sugarcoat it – the takeout is too damn high.
It's pretty easy to be a sports bettor, because with less than 5 percent takeout, wagering on a near 50/50 ATS proposition allows customers' bankrolls to last. With some sports bettors signing up to try racing, their bankroll degradation can feel like Armageddon.
A 5 percent rebate addresses this horrible going concern, and might look something like this:
A new player deposits $100 into an ADW. He or she hits a few bets on an Oaklawn Saturday with a decent churn rate of 8, betting $800. But, like many of us, their balance is zero come Sunday morning. With a rebate, however, their balance is not zero, it's $40. On Sunday they are alerted to this found money via email or text, and this cold hard cash can be re-bet on a Sunday card (instead of playing eNascar at DraftKings).
I understand that this is more complicated than it appears because of signal fees and contracts, but in times of crisis, smart firms pivot on a dime. A man was put on the moon 51 years ago, racing surely can quickly pass – with only a few tracks running – industry-wide 5 percent rebates for a test.
Striking while the iron is hot is more than doing what's always done with customers who have come to you. The betting business world is cutthroat, and finding and keeping customers is job one. Right now, horse racing has an opportunity to do that. Let's hope it's up to the challenge.
Dean Towers is a longtime horse owner, bettor, racing fan and marketer who has presented at several racing and gambling conferences across North America.
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