Unbridled Horse Sense

Back in the day, segmenting horse racing fans was easy: The big winners took a cab home from the track and the losers used public transportation. The truly unfortunate walked.

But during the last 10 years, off-track betting and the Internet moved more than 80% of wagering away from where races are held. So not only is it harder to distinguish winners from losers, it’s tougher still to keep bettors loyal to any one track.

“You can imagine the implications,” says Andy Skehan, chief marketing officer at Churchill Downs Inc. in Louisville, KY. “We’re trying to be in touch with our clients when they are somewhere else, mostly in locations we don’t control. We realized that database marketing was an area we wanted to pursue. We wanted our marketing efforts to be more efficient.”

The result of the new customer focus was a revamping of the Twin Spires Club, which includes 150,000 of Churchill Downs’ 1 million customers across its six properties. Twin Spires originally was constructed as a simple tiered points program based on play. But it wasn’t until Churchill Downs incorporated SPSS Inc.’s Clementine data-mining software into its system that it gained a fuller picture of the members.

For instance, transaction data analysis revealed how long customers view online offerings, when they play, and whether they place bets in combinations such as exactas or trifectas, says Atique Shah, Churchill Downs’ vice president of CRM and technology solutions. This allows the track to customize messages to players based on their habits.

But the system also captures personal data from Churchill Downs’ customers through a combination of Web site registrations, sweepstakes and surveys.

Initial analysis revealed two significant findings about Twin Spires’ members. The first was that the program’s pre-existing bronze, silver, gold and platinum tiers — based on points accumulated through play or other on-site transactions — weren’t granular enough.

The new understanding of its customers allowed Churchill Downs to target outside advertisers’ programs. If platinum-level members usually played at a given track on Tuesday afternoons, Churchill Downs could arrange for a high-end sponsor like Lexus to have a strong presence that day.

Shah doesn’t anticipate that his newest models will play a major part in the company’s direct marketing plans before next February. But an early test will come in fourth quarter 2004, when Churchill Downs will base a merchandise catalog mailing on the models to test their validity.

Why is it taking so long for Churchill Downs to embrace database marketing? “This is a company that’s more than 140 years old,” says Shah. “I have to build a case.”