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Churchill Downs Bets on Its Brand
Month 8: Strategic deal-making marks a new approach to funding CRM.
For the rest of the February 2005 issue of CRM magazine please click here
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Picture this: A Churchill Downs Inc. (CDI) customer visits one of the company's horse racing tracks, socializes, places bets--and wins a few--and enjoys slow-motion replays of the races on a state-of-the-art, high-definition TV. The satisfied customer drives home eager to return, and imagines how sharp a new plasma screen will look in his living room. That vision drove an innovative CRM arrangement between Churchill Downs and Gateway, a PC maker that also sells televisions and other electronics. Churchill Downs will receive televisions, desktop computers, and laptops from Gateway, and the company gains valuable marketing real estate and visibility in front of millions of track customers. "I know we'll need to replace laptops, and I know we need more plasma-screen TVs for our customers," says Atique Shah, CDI vice president of CRM and technology solutions. "I could go out and buy the hardware from any company, but why? Why not focus all of that spend with one company, and see if we can leverage a mutually beneficial opportunity?" The equipment-for-marketing relationship certainly lowers one bucket of costs for CDI's massive, multiyear CRM implementation, but both enterprises expect their relationship to expand. "It takes courage and vision on both sides to get this done," Shah says. "And Gateway is really working toward ways to help us improve the customer experience." Soon, for example, customers in certain tiers of CDI's loyalty club program may receive opportunities to enter sweepstakes for new Gateway products. Shah's idea of lowering project costs through sponsorships, not surprisingly, was sparked by his previous experience developing a CRM program for the NBA. Professional basketball players regularly leverage their exposure to ink lucrative endorsement deals, and the league also flexes its brand muscles to attract sponsors. Although the NBA's CRM project did not result in any relationships similar to the Gateway-CDI arrangements, the value of the league's brand made Shah wonder if a strong brand could benefit a future CRM project. One never knows when a long-shot idea will pay off by improving the odds of higher CRM returns.
Since launching CDI's CRM project eight months ago, Shah has inspired his team with a consistent message: We are truly doing something unique by trying to become the first horse-track company to adopt such a sweeping CRM strategy. The Gateway deal--and to a lesser degree a more traditional, but also more comprehensive hosting deal with EDS--shows that Shah's theme is more than simply a motivational tool. EDS will host all applications and hardware related to CDI's CRM and e-commerce activities. The agreement identifies EDS as Churchill Downs' exclusive hosting partner, a designation that provides marketing opportunities to the large technology services and outsourcing company. Shah says he was attracted to EDS's technical know-how, deep experience, and multitiered support offerings. Internally, the CRM project team successfully passed its first major internal deliverables deadline. In fact, more data sources were cleaned and fully loaded into the Epiphany system than originally promised. Other recent work has focused on developing marketing campaigns through new email templates. Each track devises its own communications plan and then works with Shah's team to nail down the specific look and feel of the campaigns. Thus, much of the project demands a high degree of collaboration between Shah's corporate CRM team and his "CRM evangelists" at each of the company's six tracks. Says Shah: "Our evangelists have been preaching the praises of data and letting their people know the value." Eric Krell, a freelance writer based in Austin, TX, is also open to sponsorship offers
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