I am keen to understand how the industry is performing in SA, and the success of strategies that were implemented by HRSA toward past, current and future challenges. Until only recently, SA was relying upon the 2012-2016 Strategic Plan to chart its direction. Now that that strategic plan has run its course, let’s have a look at how SA faired toward achieving its strategic mission.
A ‘strategic plan’ is defined by Balanced Scorecard Institute (BSI) as:
A document to communicate the organization’s goals, the actions needed to achieve those goals and all of the other critical elements developed during the strategic planning exercise. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.
The HRSA 2012-2016 strategic priorities identified in the plan are as follows:
2012 – 2016 Strategic Priorities
- Consume Led Focus: HRSA will develop an approach that will attract, engage and retain consumers in harness racing.
- Revenue & Financial Sustainability: Delivering a sustainable financial base to ensure a racing code that is commercially attractive.
- Racing Model Optimisation: Developing a Blueprint for 2022 which delivers a racing schedule and focuses on ensuring competitive racing, underpinned by quality race programs.
- Racing Facilities & Resources Development: Upgrading of venues, racing facilities and human resources of Member Clubs, aligned to the 2022 Blueprint, will ensure continuity of racing and engage and retain both participants and consumers.
- Increase and Improve Participation of Owners, Trainers and Breeders: HRSA will support ownership and breeding initiatives to ensure the supply of quality horses in South Australia.
High quality annual reports provide a clear statement on achievements and performance, present relevant statistics, and have clear links to strategic priorities. For this article, I focussed predominantly on the first strategic priority ‘consumer led focus’, and expected to find evidence of actions and outcomes toward it in the 2013, 2014 and 2015 annual reports, as per best practice. (Note: The 2016 annual report is not yet publicly available from the HRSA website, and so it was not possible to include document into this analysis).
Initiatives listed under consumer led focus include determining HRSA’s point of difference through competitor analysis, identifying current markets, developing a strategy for improving the HRSA brand and establishing a marketing strategy. A key outcome measure of success was to “increase public awareness and race meeting attendances by 10% annually from 2012 to 2016” (or 50% by 2016). So, how has HRSA faired with its performance on this important strategic priority?
I found several occasions when the mission of HRSA or the strategic priorities were quoted in annual reports. There was no reference to specific actions or outputs tied directly with the strategic plan or mission in the annual reports for this initiative. So, immediately I recognised that this exercise might be challenging. (That said: credit is due for one strategic initiative that was well presented, and consistent with best practice: this was initiative 3.2 on integrity control).
I thought evidence of attendances might be found where industry statistics were reported, but they weren‘t. If HRSA maintains statistics on outcomes for this strategic priority (ie attendance and awareness), these are not reported in the annual report. So, I searched for the word ‘attendance’ and ‘crowds’ and found the following:
- 2012/2013 annual report: the CEO refers to a record crowd of 6500 at SA Cup Night, and to ‘strong crowds’ in attendance at regional venues featuring Country Cups. Racing operations refers to strong crowds in attendance at Port Pirie and Mt Gamier cup meetings, but the actual numbers are not cited. A big crowd was also cited for the Southern Cross Series.
- 2013/2014 annual report: The SAHRC Summer Carnival in January 2014 was quoted by the chairman to have attracted a crowd of 5500, and there was an excellent crowd also for the Southern Cross Series (but no numbers disclosed). The SA Cup meeting featured a ‘wonderful crowd’ (no numbers disclosed).
- 2014/2015 annual report: the SAHRC Summer Carnival crowd numbers were reportedly affected by heavy rain, and the chairman reports club attendances and on course wagering were affected by SA Harness moving to Sky 2, but no figures on attendances are provided.
I question whether drops in attendances at the SAHRC Summer Carnival could be attributed to the change from Sky 1 to Sky 2? This seems to be a type 1 error – which is detecting an effect that is not present. It is my understanding that attendances were already declining, even when races aired on Sky 1.
It’s probably a no-brainer that attendances at SA races are almost certainly less than in 2012. Why are attendances down? Were the other actions listed under the consumer led focus strategic priority implemented and reviewed to assess impacts and opportunities that might improve attendance and awareness levels?
The table below shows the frequency with which I found key words in the text of the 3 annual reports (and excludes instances found in the financial statements and the governance statement). The terms ‘marketing’, ‘advert’ or ’advertising’ and ‘brand’ or ‘branding’ could be indicative of consumer led focus. Whereas the terms ‘wagering’ and ‘market share’ would be more indicative of strategic initiative 2.1, which is a focus on actions underlying revenue and financial stability to increase market share. I also included the word ‘integrity’ to assess effort toward the strategic priority on racing optimisation – in particular initiative 3.2.The table below shows, for example, that in the 2015 annual report, the word ‘wagering’ was mentioned 20 times, market share 14 times, whereas the words ‘marketing’, ’advertising’ and branding’ were mentioned only twice each in the 2015 report, and integrity was mentioned 11 times.
| Search Term | 2013 Annual Report | 2014 Annual report | 2015 Annual report |
| Wager/ing | 22 | 20 | 20 |
| Market share | 12 | 14 | 14 |
| Marketing | 1 | 2 | 2 |
| Advert/ising | 4
(2 in BOTRA’s article & 1 in an interview with Naomi Shelbourne) |
2 | 2 |
| Brand/ing | 0 | 0 | 2
(both references to Ubet. No reference to branding of SA Harness Racing) |
| Integrity | 11 | 6 | 11 |
The word search highlighted that the content of all three strategic plans was predominantly about wagering – which was consistent with my observations, and moderately about integrity. This begs the question, how much activity by HRSA is devoted to the other strategic priorities? There appears to be very little emphasis on a marketing plan, branding of the product and the potential contribution that these critical exercises can have in increasing market share and awareness of our product. However, I did find the following scenario in an annual report.
In 2013, John Letts was involved in promotion of harness racing including via Radio 5AA, with the launch of the Summer Carnival, promotion of horse syndication and with promoting the SA Cup. These promotional strategies appear to be partly associated with consumer led focus initiative 1.4, which is to ‘Establish a marketing strategy including a promotional and advertising plan based on target markets for on-course and off course markets and/or wagering experiences and information from the competitors analysis’. However, there is no detail about any competitor analysis, or about the promotional and advertising plan – assuming these were undertaken and informed the rationale for adopting this approach.
Though I can find an amount in the budget that should fit consumer led focus, I wonder whether this extremely important exercise is being approach as it should. There is evidence in the report to indicate that it may not. For example, in searching for evidence of consumer led focus, I identified misuse of the term ‘marketing’ and ‘marketing strategy’.
The 2014/15 annual report states “The Board’s main focus has been to increase wagering on our product and as a result we have introduced a range of marketing initiatives to increase wagering of SA Harness Racing.”
The initiatives listed include fixed odds betting, a new wagering website, programming of races, full page colour guide in the Advertiser and added support from Tattsbet in increasing pari-mutueal jackpots.
However, the above excerpt refers to wagering initiatives and promotions – not to marketing per se. This terminology is important to understand. So, what is marketing, advertising and selling in the business world?
Marketing refers to the strategies and preparation to get a product to sell, and involves identification of target customers. Marketing is a long-term, forward-looking process whereby how to package and brand the product is determined, as well as a design that appeals to the target market. Successful marketing involves significant groundwork through study of the target market. What are the needs of customers? How will needs be addressed? What is most important to them in terms of how much emphasis should be put on different aspects of the product?
Advertising refers to the process of promoting the product to the marketplace. Getting the product known to the target customer, and emphasizing its benefits is important when it comes to driving successful sales.
Selling concerns itself with the techniques of getting people to exchange their cash for your product. Whereas, marketing views the entire business process as consisting of an integrated effort to discover, create, arouse and satisfy customer needs so that there is a demand for that product.
So marketing involves the ground work of branding and researching the needs of the target market, and advertising is the process for communicating with the target market.
In conclusion, a strategic plan should not merely be a corporate exercise. When it comes to consumer led focus, the annual reports give an impression of a limited range of strategies being implemented that may not be founded on good business practice, particularly when it comes to marketing. Given the findings, we should also query whether HRSA actually understand some of its own strategic goals and objectives! As the audit report into Victorian harness racing recommended, strategic planning should be a standing item on the Board agenda so that actions toward priorities can be tracked by the Board. Sadly, the annual reports provide limited insight into what HRSA is doing with regards to strategic direction, the activities that are aligned with strategic priorities, how HRSA is performing and evaluating its strategies, and how these evaluations may be informing decision making. Given the status and risks confronting our South Australian industry, tracking and measuring performance, and critical review of possible findings (with input from the stakeholders in the industry where appropriate) to ensure that it is not make type 1 or type 2 errors is desperately important!
Approved By Dean Baring www.harnessbred.com
Driving The Future Of Harness Racing
