Del Mar Thoroughbred Club faced a marketing predicament. It needed to attract a younger, more female demographic to augment its dwindling customer base of older male gamblers. And it needed to attract the new group without alienating the existing customers.
Del Mar used a mix of database marketing along with new techniques, and measured as it went to gauge its progress.
"We've rebranded an institution," said Craig Dado, senior vice president of marketing at Del Mar, the second-largest racetrack in the US, in an interview with The CMO Site.
The rebranding started in 2000. Through market research, Del Mar discovered differences between its core customers of older, male gamblers, and the younger women it was trying to attract. For one thing, the older men were far more price sensitive.
That suggested the solution for retaining the core customers: Raise prices, then offer a half-price discount to customers who joined a track loyalty club.
Traditional customers joined the Diamond Club, where Del Mar could continue communicating with them using database marketing, sending gambling- and racing-focused messages. With that channel safely in place, Del Mar reached out to its new markets using advertising and Internet marketing.
The new image was to portray Del Mar as a fashionable destination, with racing and gambling as incidental. For the new market, the track adopted the slogan "Cool as Ever." Most of its ads don't even show horses. The club brought in cool events, featuring microbrews, reggae, and gourmet food trucks. Del Mar also attracted sponsors such as Playboy, Vanity Fair, Maxim.com, and San Diego Magazine.
"We came up with specialty drinks. You can't go to Del Mar and not have a Del Margarita or Del Martini," Dado says.
And Del Mar launched a new Website, Del Mar Scene, to attract the new customers, leaving its old Website, dmtc.com, in place, featuring betting and racing information.
One TV commercial shows women's fashion shows at the track through its 60-year history. The message: Fashions change, but Del Mar is always in fashion. Dado says he was encouraged about the split marketing campaign when he got the following feedback card from a customer, which he displays framed in his office:
Source: Del Mar Thoroughbred Club
Dado says he wasn't worried about alienating customers like that one because he was confident he was reaching them through the Diamond Club.
Social media help bring in the new customer base. The track has 6,500 checkins on Foursquare and 21,000 on Facebook, with 28,000 Facebook fans.
Del Mar has a mobile app, where people can watch races live or recorded, get information about races, and even place bets so long as the users are connected to the track's own WiFi network. Customers wagered more than $500,000 over the phone app.
Measurement plays a key role in Del Mar's marketing. "We analyze everything," Dado tells us. The company tracks spending on each event against results. "If things don't perform we go back to the drawing board."
The campaign worked. The new demographic is 70 percent under 50 and 40 percent female. Twelve years ago, the demographic was 50 percent under 50 and 30 percent female. Attendance was 17,844 last year, up from 14,252 in 2000, against an industry decline.
Source: Del Mar Thoroughbred Club
And the track is diversifying from wagering revenue. Total revenue per patron from wagering is down -- $9.49 last year compared with $12.77 in 2000. But overall wagering revenue is about the same. And per-patron overall revenue is up to $36.15 from $28.69. The biggest gain in per-patron revenue: food and beverage, which increased to $10.35 from $4.55. Admissions and seats were also up, to $12.68 per patron from $8.98.
Revenue per Patron
Source: The CMO Site, from financial information provided by the Del Mar Thoroughbred Club
Increased revenue translates to increased profits -- which Del Mar categorizes as rent. The track occupies part of the California state-owned Del Mar Fairgrounds. By contract with the state, all the track profits get turned over to the state to run the fairgrounds, according to Dado.
The Del Mar track refers to its profit as rent, because it pays its entire profit to the State of California as rent on the property it occupies. Source: Del Mar Thoroughbred Club.
Del Mar has had to walk a tricky tightrope, attracting new customers without alienating the old. It appears they've been successful. Have you ever had to balance two hostile groups of customers? Tell us about it.
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— Mitch Wagner , Editor in Chief, The CMO Site