HomeBusinessHorse RacingEngland

Ascot digs into customer data to help double hospitality revenues

Ascot digs into customer data to help double hospitality revenues in five years, adopting a data-driven approach to fine dining.

450758016

Ascot’s Royal Meeting is one of the high points of British horse-racing’s flat season, with eight Group One contests among its 30 races and £7.3m (€8.1m/ $9.4m) in prize money at stake.

But it is just as well-known to the wider British public for its associations with the monarchy, the traditions of its dress code and its garden party atmosphere. That appeal means hospitality has long been a central part of the Ascot business model, especially since the Royal Meeting generates approximately 70 per cent of the course’s annual revenue.

In 2006, the track completed a £230m redevelopment of its Grandstand to provide the facilities needed to support its ambition of establishing itself as the finest racecourse in the world.

Over the next decade, the UK hospitality market went through a prolonged period of downturn following the 2008 recession, but has returned to growth in recent years. Ascot shared in that upturn, with sales in its fine dining business growing by about 10 per cent across all racedays between 2014 and 2015.

Industry forecasts indicated that higher rates of growth were possible, with the wider hospitality market projected to expand 15 per cent across the five years to 2019. As a result, Ascot’s commercial team turned its attention to priming its business to match – or ideally outperform – the wider trend over the same period and resolved to be guided by the numbers in doing so.

Chief commercial officer Juliet Slot says: “We could see fine dining hospitality had real potential to grow at a faster rate than it had been doing and we knew the impact that a data-led approach had had on other areas of the business – particularly ticketing – so it made sense to apply the same principles here too.”

HIGHLAND REEL (Ryan Moore) wins The Prince Of Wales’s Stakes Royal Ascot 21 Jun 2017 – Pic Steven Cargill / Racingfotos.com

Data acquisition

Ascot had been working with sports marketing agency Two Circles since 2013 on a range of projects across sponsorship, conferences, events and ticket sales, and it extended the relationship into hospitality strategy.

Slot explains: “We started out with a strategy project aimed at identifying how data could help drive growth across a range of revenue streams. That led us to focus on using data to increase ticket sales, not just for the Royal Meeting but across all other racedays too, over the next two years. So when we wanted to target a similar uplift for hospitality we had a lot of pre-existing experience and evidence we could draw on straight away.”

The project began by targeting specific types of data to health-check the existing hospitality offer, identify the challenges it faced and pinpoint the elements it should prioritise as primary sources of future value and volume growth.

First-party customer data was drawn from the racecourse’s own sales records to build a picture of fine dining hospitality buyers and then segment that audience along lines of demographics, behaviours and purchasing patterns. Data points collated included: the type of buyer (individual, corporate or agency); spend; location; racedays purchased; type of products purchased; frequency of purchasing; and number of covers.

This quantitative data was supplemented by additional qualitative research conducted among Ascot hospitality customers through telephone and online surveys to gather feedback about their event experiences and understand any changes or additional facilities and services they would like to see.

A layer of third-party information was then added to create richer, more rounded customer records through income-profiling data – key information on individuals and companies such as turnover and employee numbers – supplied by specialist external agencies.

Finally, the project sought to add context to the information from these sources by building a picture of the wider UK sport and entertainment hospitality market, both to determine where the Ascot offer was (and should be) situated within it, and to identify other sports and venues which experiences the racecourse could relate to, enabling it to both pick up on any gaps in the market it could fill and highlight any product needs it was not already meeting.

Data collected in this phase included benchmarks established by Two Circles through their work with other rights-holders, hospitality businesses and market research conducted around the UK sports and entertainment market as a whole.

Analysis and insight

The data processing and analysis elements were managed by Two Circles, which began by creating a new Ascot data warehouse within which all records the racecourse had gathered on its fine dining customers were collated and then enriched with the additional income-profiling information bought in from external providers.

A visualisation and segmentation platform was developed alongside the warehouse to provide Ascot’s commercial teams with:

  • A detailed single-customer view drawn from the accumulated data on all hospitality purchasers
  • The ability to segment audiences along demographic and behavioural lines to create more targeted marketing communications
  • A real-time monitoring capability to track the impact of their sales and marketing processes.

The data warehouse contained three years of historic hospitality customer purchase records, giving the project team a rich seam of information to mine for insights that would inform the future shape of the Ascot fine dining offer and the way in which it would be marketed to new and existing clients.

Profiling and behavioural analysis were the two main processes applied to the data in order to benchmark past and current performances and identify key target areas for future growth. Benchmarking analysis focused on specifics such as enabling a comparison of consumer; corporate and agency sales by volume and value over time; and creating customer baselines around recency, frequency and value – i.e. when they last purchased, how often they purchased and how much they spent.

Development-focused analysis was led by efforts to build demographic and socio-economic profiles of the fine dining customer base to highlight key target groups for individual sales, and profile the types of businesses that buy Ascot hospitality and index them against the UK and local business universe as a means of identifying high-potential customer groups the racecourse was not already serving.

As well as improving Ascot’s knowledge and understanding of its customer base and highlighting priority groups for future sales and marketing efforts, the analysis phase of the project proved particularly valuable in identifying a number of challenges the racecourse needed to overcome in order to be able to present an attractive offer to the new and existing clients it would be looking to target. These included:

  • A falling spend-per-customer – down nine per cent between 2014 and 2016
  • Static customer retention levels
  • A mismatch of clients to products that meant corporates of all shapes and sizes were buying inventory across the board
  • Insufficient sales and marketing reporting tools
  • Un-optimised sales teams and customer-sales targeting
  • An over-reliance on agents
  • Unsold inventory
  • A wider shift in demand across the UK market toward a broader range of products, from formal to informal premium
  • A corresponding need for a significant shift in range and pricing of products to deliver against market expectations for different offers at different price points.
(Ascot)

Actions and outcomes

These insights highlighted a number of actions that Ascot could take to develop both its hospitality offer and the way in which it was marketed and sold. Slot explained: “The data gave us a much better understanding of what potential future customers of different types wanted from an Ascot experience. This was in-depth knowledge that we didn’t have before and we used it to inform the design of new and improved products. We also started by rebranding our high-end offer to being fine dining whilst still continuing to offer hospitality offers at the lower price points.

“We were also able to make sure those products were being marketed to the right groups, businesses and individuals in the right way, and having access to real-time data enabled us to set up some new systems and processes that allowed us to match results to actions and adjust our strategies according to what the data was telling us.

“So, for example, carrying out a more sophisticated analysis of our customer data improved the quality of our lead identification because we were able to profile potential clients and assign them to the appropriate segment and then point them toward the products we knew would have the most appeal to that particular group.

“We also recalibrated our marketing around the same sort of data insights to inform the timing and content of sales communications to maximise their appeal and potential response rates and were able to establish new evaluation and reporting processes that now allow our sales and marketing teams to adjust their tactics during the sales process according to the results they are seeing in real time.”

These actions had four key impacts on the racecourse’s hospitality business:

1) Improved customer retention and acquisition leads
Being able to understand more about existing clients’ purchasing habits and the interests of potential target groups enabled Ascot’s sales and marketing teams to generate higher-quality leads by identifying which products and price points are most appropriate for which audience segments. Actions taken included:

  • Using this improved understanding of the profile and characteristics of existing and previous purchasers to target lookalike customers through client acquisition tools like LinkedIn Sales Navigator
  • The identification of the professional services, wholesale/retail and information technology sectors as priority acquisition targets in corporate sales
  • A further focus for Ascot racedays’ corporate sales on small-to-medium-sized enterprises, companies in lower-turnover bands and those based in the M4 corridor and London area as being most likely to buy at these racedays
  • Prioritising individual retention and acquisition measures around younger, more affluent demographics.

2) More responsive marketing and sales processes
There were also a number of changes on the supply side in the racecourse’s sales and marketing teams that worked. In particular, changes were made to improve the efficiency of sales operations and enable resources to be concentrated in areas in which the data indicated they would generate the most value:

  • Online self-service functionalities were introduced to the Ascot website to capture lower-value, smaller-scale bookings and free up sales personnel to focus on higher-worth opportunities
  • Sales and account management teams were re-engineered to enable sales representatives to cultivate one-to-one relationships with the highest-value and most-likely-to-buy clients, while the marketing team was briefed to drive sales within the lower-value ‘tail’ of the customer base
  • Sales teams were also restructured to reflect the data-driven, segmented nature of the business, working with targeted account management, relevant KPIs and customer-led incentivisation benefits and commission structures.

3) More effective marketing strategy and communications
Access to more-detailed customer data meant that Ascot’s marketing team was able to communicate the racecourse’s hospitality offer, not just in terms of targeting content and delivery, but in being able to adjust activity in real time according to results and react immediately to changes in customer preferences and market conditions. Measures implemented included:

  • Bespoke marketing strategies for individual customer segments that dictated the channels through which they were targeted and at which times
  • New campaign planning that enabled the team to dial marketing activity up and down across the year for each client segment
  • The use of survey feedback to improve marketing messaging. For example, Royal Ascot was identified as being set apart by its sense of occasion, while new attendees are more likely than returning ones to see the meeting as unique, uplifting and exhilarating
  • More sophisticated reporting of communications impacts on owned and third-party media, enabling better optimisation of marketing messaging, platforms used, campaign timings and demographic targeting.

4) Refreshed hospitality product offering
The combination of customer feedback data with wider hospitality market intelligence pointed Ascot toward a number of improvements in some areas of the existing fine dining offer and to some more fundamental changes to the range of products available. Examples of the former include improvements to parking facilities, signage and the food and drink in some specific facilities. Changes in the latter category included the removal of the entry-level Sandringham Restaurant; the expansion of the modern and more informal Lawn Club; and the repositioning of the Villiers Club as a more entertainment-focused product with a greater degree of informality.

Ascot’s 2018 commercial results were well ahead of previous performances and predictions of growth the initial proposition had indicated were possible. Over the period 2014-18:

  • Hospitality revenues increased 98 per cent
  • Covers sold increased by 93 per cent
  • Occupancy rates were up 19 percentage points, from 78 per cent to 97 per cent.

Customer retention rates also improved between 2015 and 2018, up to 43 per cent from 35 per cent for corporates and 36 per cent from 30 per cent for individuals, while average spend per client grew five per cent between 2017 and 2018 for corporates and 10 per cent for individuals.

Ascot has also reduced its reliance on agency sales, cutting the number of agents used by 52 per cent between 2016 and 2017 alone, while seeing a fall in revenue from agents of only 12 per cent over the same period.

Ascot’s adoption of a data-driven approach to hospitality sales has a number of implications of its own for rights-holders with similar objectives:

The value of employing both quantitative and qualitative data.
Ascot had a rich set of customer information data to mine for insights, but many of the actual changes that were made to the hospitality offer were informed by the qualitative research and broader market analysis conducted alongside. Feedback surveys identified many of the product improvements that would prove most popular, while competitor analysis and market intelligence enabled the marketing team to consider what it had learned about its own client base in a broader context and identify some new gaps and opportunities as a result.
The importance of segmentation.
Audience segmentation is one of the basic building blocks of data-driven marketing but is no less important for it. Being able to segment the customer base along demographic and behavioural lines was essential to enabling Ascot’s marketing team to build the targeted campaigns and communications that raised the efficiency and effectiveness of its sales performance.
A willingness to change processes as well as products.
Ascot’s data-driven approach did not stop at what the racecourse sold but informed how it did so too, using real-time analysis to continually test its marketing and communications output to refine its effectiveness and allocate sales resources more efficiently by concentrating them on the areas in which they could deliver the most value.

Slot says of the overall impact of the data-led strategy: “Taking this approach to hospitality sales was a natural next step from the similar work we had already done in other areas of the business, so we were able to build on that approach and take a really hard look at all the implications of what the data told us.

“The obvious answers are in what your audience looks like, which segments are the most valuable and what sort of offers these groups are most likely to respond to, but if you can drill down into that even further by asking them what specific changes they would like to see and look at those responses in a wider context than just what is happening inside your own gates, then you can generate some much deeper insights and make some really far-reaching changes to how you do business as a result.”

Most recent

Budapest has turned the setback of its unsuccessful 2024 Olympics bid into an opportunity that is driving growth and change across the city.

Matt Carroll, chief executive of the Australian Olympic Committee, tells Adam Nelson how a focus on athlete engagement, grassroots participation and community schemes has helped to boost the AOC’s commercial programme throughout the Olympic cycle.

The decision by the ATP Council not to renew Chris Kermode's contract as ATP executive chairman and president caused surprise when it was announced in March. Ben Cronin speaks to the outgoing tennis chief about his record.

A Ukranian billionaire is funding the latest effort to turn swimming into a regular competitive professional sport and not just one of the most popular events at the Summer Olympics.