An ambitious strategic plan Churchill Downs Inc. hopes to accomplish in 2004, which president Tom Meeker said will "change the culture of our company," includes a major customer service initiative, increased branding of the company's assets, and possibly even a company-owned account-wagering platform.
Meeker described the plan as "aggressive, not grandiose" during a teleconference with investors Wednesday morning. (For CDI's 2003 financial results, click here)
The major element of the plan will be an additional $2 million in funding to develop a customer intelligence system that will allow for target marketing and increased customer service.
In December, CDI hired its first vice president of customer relations, Atique Shah. Meeker said early results of the company's "customer relationship management" initiative have been positive.
"I'm encouraged by what we've seen in the infancy of the [effort] and its ability to change the culture of our company and make the customer first," Meeker said.
Customer service centers will be added at the company's tracks and customer feedback and satisfaction will be measured consistently, Meeker said. Additionally, CDI is working to add new customer interfaces for wagering as they become available.
"The program involves investment in technology," said Meeker, who described 2004 as a "repositioning year" for the company. "This will provide the opportunity to develop a customer intelligence base which will among other things allow us to segment customer base and talk more effectively to our customers."
CDI also hopes to increase membership in its Twin Spires Club from 40% of its customer base to 80%. It is hoped CDI simulcasting partners will welcome the Twin Spires Club, which offers customers incentives to wager on the Churchill Downs Simulcast Network.
Meeker noted current simulcast margins "are slighted in the direction" of satellite facilities, which means they would actually make more money if CDSN wagering is increased.
The branding of CDI's assets will also continue to be a priority. "Clearly these brands represent a significant value driver for the company," Meeker said.
He hopes the continued success of the CDI brand can lead to expanded media rights and distribution, including internationally.
An account-wagering platform may also be on the horizon for CDI. Said Meeker: "We are looking at vertical distribution, but whether we would invest in some account wagering platform is open today."
Several changes to the way account-wagering is currently conducted would need to be accomplished before any action is taken, Meeker said. One would allow a customer a single account to wager on all the nation's major tracks.
"In the long-term we believe there is a solution (to allow for a single account)," Meeker said.
With the increasing use of broadband technology, Meeker proposed the idea of delivering content via television on multiple platforms with customers able to select which races to view.
A similar set-up has to be used to expand into the international market. Meeker said one company could not handle international distribution if it is to be successful.
"Two things absolutely need to open up for new international markets," Meeker said. "Increased scale. One company cannot do it. Develop a U.S. racing product that has maybe not all the races, but all the significant races. Second is some agreement to open up our markets for international racing."
CDI's guidance was the company would earn approximately $1.70 per share and a first quarter loss of 92 cents. CDI's 2003 earnings per share was $1.80.