Horse racing may feel antiquated to those who view it only from a distance. If you’re like most people, you at least have a familiarity with the Triple Crown. Maybe at this very moment, you’re even researching how to bet on the Belmont Stakes.
That’s all well and good, but for millions of people all over the world, horse racing isn’t just something to focus on a few weekends out of the year. It’s a way of life. Not only a vital source of entertainment, but a genuinely significant economic driver that generates billions in wagers, venue attendance, and other forms of economic activity.
How do racing venues continue to generate interest in a game that has not changed? In this article, we’ll take a look at branding techniques used by the horse racing industry and why business owners should take note.
Horse Racing Is About More Than Just The Event
The most significant contributing factor to the ongoing success of horse racing is not necessarily the events themselves. Yes, 20 million people a year tune in to the Kentucky Derby, but you can make a strong case that the event itself is not what attracts so many eyes, at least not the two minutes that account for the race itself.
Premier racing events are exciting to be sure, but they’re also over in 90 to 120 seconds. How do you squeeze billions of dollars out of something like that?
By developing a sense of identity not just around the sport, but around individual races. The Kentucky Derby, for example, is famous for its timeless Southern charm. Other events are noted for celebrity ambassadors or, as is the case with Royal Ascot, the attendance of monarchs.
By building up a subculture around the sport, horse racing is able to attract interest in a way that extends beyond merely what’s taking place on the track.
The Loss Leader
In business, a loss leader is essentially a compelling, value-driven offer designed to attract interest. Costco, for example, is well known for using cheap chicken as a loss leader. You may have wondered in the past how they can make money selling rotisserie chicken for $5.
The answer? They can’t, not really. But they understand that if they can get people to come into the store for a $5 chicken, they’ll often leave with a cart full of potentially hundreds of dollars worth of products.
Horse racing provides a similar value offer. Many tracks offer free or very affordable attendance. They may even provide low-cost drinks, always to bring people in and encourage them to spend more, either on betting or through other amenities.
Does every business need a loss leader? Not necessarily, but it is certainly a high-leverage way to generate interest. It also has the distinction of being both low-cost and almost universally popular among customers.
Another way to look at it is that horse racing is very good at revenue diversification. The event itself can generate money, but tracks also rely on food and drinks, betting, and other secondary purchases.
The business lesson in all of this is simple: it is extremely worthwhile for any business to have multiple income streams. It’s arguably even more worthwhile to understand how to leverage and market value.
The Impact Of Narratives
Branding, at the end of the day, is just a story. You want your customers to be able to see themselves within your brand, or at least recognize a wider social or cultural contribution that your company is making.
Horse racing is very good at identifying and capitalizing on narratives. If you watch an event, and particularly the coverage leading up to it, you’ll notice that stories are everywhere. There’s information on the jockeys, the horses, and the history surrounding the event itself.
Naturally, the narrative element is easier when you have compelling stories taking place at every turn, but if you can stay the course, you’ll eventually be able to identify storytelling threads within your own brand.
Horse Racing Is A Big Business
The title of this article positions horse racing and business as two similar but ultimately separate things. This is admittedly slightly disingenuous. Horse racing itself has a global market valuation of $180 billion. That is big business in every sense of the phrase.
Horse racing also has history on its side. Lots and lots of it. That history is valuable, and it is certainly a contributing factor to the sport’s ongoing success.
Ultimately, though, any business would do well to adopt some of the principles we’ve described up until this point.
