E-Mail Is the New Favorite at Churchill Downs

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Racetrack owner Churchill Downs Inc. is beginning to shift marketing dollars from traditional mass media to e-mail.

The niche-sport nature of its business and the ability to speak directly to its customers are the leading reasons for the change in the Louisville, KY, company's marketing strategy.

"What we're really looking to do is build our e-mail lists, build our database and get better at communicating one to one exactly what the customer wants, and we've got several strategies," said Mark Midland, vice president of marketing at Churchill Downs Inc.

The company runs six racetracks in California, Illinois, Kentucky, Florida and Indiana. It hosts 115 stakes events, including the Kentucky Derby and Kentucky Oaks, Arlington Million and the Hollywood Gold Cup. It also owns off-track betting facilities and has interests in communications firms.

With such businesses, marketing is indispensable in helping fill the grandstands at venues like the Churchill Downs racetrack and 10 OTB parlors.

So the company turned to ExactTarget, an Indianapolis application service provider with clients like The Home Depot, Marsh Groceries and American Cancer Society. Using ExactTarget's Connect e-mail marketing software, Churchill Downs Inc. has seen a surge in business.

Take the response from some recent overtures. The company has sent 1.2 million e-mails in the five months since it started using ExactTarget. Open rates now average 30 percent, Midland claims.

"Previously, we did not track the open rates," he said. "We had no method to do that internally."

Survey response rates via e-mail also have improved.

For example, a July 11 survey to 2,500 members of its Twin Spires Club loyalty program who visited the Arlington Park, IL, racetrack at least once in the previous month yielded a 51.1 percent open rate. Of those who opened, 82.6 percent completed the survey.

A June 5 e-mail effort to Twin Spires Club members for the Triple Crown at the Belmont Stakes garnered an equally high response. About 23,000 e-mails were dropped, asking recipients to pick the first three winners in an online contest.

The records show a 39.4 percent open rate. Of those who opened, 50.4 percent, or roughly 4,500 individuals, played in the contest. The winner bagged 100,000 points. The value of points varies based on prizes redeemed.

The 100,000 club members -- only 23,000 provided e-mail addresses -- earn points for wagers made at Churchill Downs Inc. betting parlors and racetracks. They are part of an overall Churchill Downs Inc. e-mail database of 250,000, which, including mail addresses, amounts to a total house list of 750,000.

"The reason we rely on our loyalty program so much is that it gives us the purchase behaviors, essentially," Midland said. "So we don't have purchase behavior on all the 750,000 customers."

The company drops 2.5 million pieces of mail yearly. E-mails are sent based on events. Creative and execution of e-mail is handled in-house. For mail, only the delivery is outsourced to Presort Services, Grand Rapids, MI.

"We've doubled the amount of e-mails we sent last year," Midland said, without giving an exact number.

Churchill Downs Inc. also relies on television, radio and billboards. TV is a key driver of the wagering business. Churchill Downs Inc. simultaneously telecasts races in 17 facilities where consumers can watch and wager. There are 1,000 such facilities nationwide, so competition is intense.

"Racing is an information game, much like the financial markets," Midland said. "We want to provide them as much information for them to win."

But life has become easier for Midland and his marketing department with ExactTarget's ASP solution.

"It's a user-friendly program," Midland said. "We transitioned from a Web programmer to a non-technical marketing person. At the same time, we greatly improved our capability for the look and feel of the e-mails, the tracking and reporting, and the ability to do surveys and provide dynamic content."

ExactTarget charges an annual subscription based on the features selected and e-mails delivered.

"It's all about deliverability," Scott Dorsey, president of ExactTarget, said of the service. "With legislation put into place and Internet service providers putting filters and blocks, it's getting more and more difficult for marketers to be able to deliver e-mails because of this macro-environment that we're operating in."

ExactTarget has relationships with Yahoo and America Online, making their white lists to ensure that the e-mails it delivers for clients are not blocked.

Churchill Downs Inc. clearly is increasingly encouraged by the response of its customers -- typically males ages 25 to 54 -- that the Internet is an area of opportunity.

Take a recent online promotion to coincide with the Kentucky Derby. It offered $5 million to any player who picked the complete order of the finish. That means participants had to get the order of all 16 horses right. None did. But 172,000 online entrants tried.

"We really feel that in some years this could be like the NCAA pools where you pick your brackets on ESPN.com," Midland said. "I would define that as a standard for an online sporting contest."


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