By Carter Carnegie
In celebration of Breeders' Cup this month, I chose to do an interview focusing on luxury marketing and attracting high net worth individuals (HNWI) to racing as this was a founding principle for creating this world-class event. When John Gaines conceived the idea of holding a season-ending championship, it was to bring to major U.S. markets a day like no other that showcased the sport with all its pageantry and jaw-dropping purses as a means to attract prospective new owners. The simple formula was based on the idea that witnessing the beauty and fierce competition of the sport at its highest level would aspire new customers to purchase bloodstock, a cornerstone of a vibrant breeding industry. Reaching the HNWI demographic can be a challenging proposition as traditional media is either too expensive or inefficient.
A long-time friend of racing, Andrew Collins, President and CEO of Sentient Jet, has redefined how to market to HNWI and led his company to become the largest private aviation cardholder network in the world with over 7,000 members. Under his leadership, Sentient and its parent company, One Sky, have benefitted from both a digital and business model transformation to create best-in-class private aviation solutions in both the U.S. and Europe. Some of the changes during his tenure at the helm have included repositioning the brand, integrating a full suite of retail and wholesale technology applications, and a deep focus on commitment to service. These initiatives have resulted in a doubling of Jet Card sales and growing topline revenues by 60%.
CC: Please share your favorite racing memories.
AC: I've been fortunate to be involved in many, but I would have to say it's kind of a tie and it's going to sound really spoiled, but it's both experiences making my way to the winner's circle at the Kentucky Derby. I think that the Nyquist win was such a rush and the ability to be in the winner's circle, see the cameras, see Bob Costas and witness the entire thing unfold from an amazing vantage point–that is a moment that you can't forget. And then the turn of events at the Kentucky Derby with Country House, and having the chance to run down to the winner's circle again, but this time since Sentient and the Country House ownership were supporting Home For Our Troops with two severely disabled veterans was amazing. Watching their reaction and joy in the winner's circle was both fantastic and humbling.
CC: What are some of the tent-pole investments in your sponsorship portfolio?
AC: There is a kind of a Venn diagram that exists, which is affinity and interests of our customers and how we try to align our efforts. So for us, horse racing is a natural activity to find and reach our customers. Aspen is another one. Aspen as a geographical location has gone from being just a winter destination 10 years ago to now being a full year-round destination with lots of festivals and summer attractions. But Aspen also propitiously aligns with our vision of finding our clients in their own organic space and showing up to support that passion, as opposed to pushing a sponsorship with a big megaphone right at them.
CC: Can you share an overview of your history with horse racing and why that sport?
AC: Sentient has been involved in supporting the Thoroughbred industry through some form of partnership with one or more stakeholder–Breeders' Cup, Fasig-Tipton, Churchill Downs, Del Mar, NYRA and TVG–over 15 years, making it one of our longest continuous investments. Racing in general is important because the whole ecosystem touches what we do in some way, whether it's folks have to get from places like Lexington to races all over the world, whether it's they have to get to horse sales, whether it's people that need to go to the Breeders' Cup [or] to any of the Triple Crown events, we constantly are flying people to these destinations.
CC: What is the profile of your customer?
AC: The demo for a cardholder is somebody in their late '50s within a concentric circle around Manhattan or Los Angeles or the hotbeds of wealth like Southern Florida. They're involved in financial services, banking, real estate, manufacturing, or they're utilizing us for personal travel. If they're not in one of the sectors mentioned, it's very likely they're retired and have a strong interest in family, sports and travel.
Our clients have minimum net worth probably somewhere around $10 million liquid. The average net worth is probably somewhere between $30 million and $50 million. Many folks use us for primary private jet lifts, but some use us for supplemental. I would tell you that a third of our client base is extremely digital and are now utilizing digital processes to book flights with us.
CC: Do products that target high net worth need to have a different standard? And what are some of those deliverables?
AC: I think in our world, especially, you have to have service delivery at an exceptional level. Our positioning is “A More Thoughtful Way To Fly” and that resonates on so many levels, but each trip matters to us. So there's a deep dive and an exceptional workflow that has to occur in our business. There's an expectation from dollar one that we are going to provide premier service and flawless execution. So you have to have that.
I would also tell you what differentiates a product like ours in the marketplace. First of all, is your positioning, and this is a competitive, a very competitive space. If you're not positioning yourself correctly, if your brand is not recognized and has strong recall, you're going to have a hard time. That's number one.
Number two, service is important and the secret to it is: service drives referrals. And the number one way that we build our business right now is through referrals. It's probably about a quarter of our intake. And so if you're not providing that service, you're not going to get those referrals and the trust level to make those referrals with your client and your owner.
CC: What channels do you use to source or reach the ultra high net worth?
AC: After securing referrals from our client base, which is the leading source of introduction, we have invested heavily in figuring out a digital strategy for acquisition. We leverage search engine marketing and optimization tools. Social media is another proven channel and we think about the various social platforms differently. For example, in our case, our Instagram feed is more aspirational whereas our Facebook might actually be more tactical as our clients often engage with this platform due to it skewing to an older demographic. We also create various campaigns that position the company for the relevancy of the time. Currently, our messaging has moved from being a lifestyle- and productivity-oriented voice in the marketplace to being one of a utility and practical nature. That shift then required us to leverage all these channels and because we're digital, we can pivot very fast and then analytically we can see the result and track it. Finally, media relations and partnerships/events are also a focus because you need both third-party and terrestrial presence to drive credibility and awareness which are vital to remaining relevant and present in the marketplace.
CC: Are there benefits to sponsoring that you don't have with other forms of advertising?
AC: Yes, as an ad is only as good as its reach and it's trackability. I think in-person events or partnerships are really about meeting both prospective and current clients in an organic way. So the best example I can give you is the immersive weekend we create around the Kentucky Derby to engage this group. There's nothing more valuable than meeting a client in an atmosphere like the Kentucky Derby. It's great cocktail talk that's very valuable to me. It is a completely different type of marketing that allows for you to be further in touch with your marketplace and you can't get that with digital.
CC: Do you see any similarities in your product and/or customer base with the Thoroughbred industry?
AC: Horse racing is a capital-intensive business, so is owning a jet. So the comparisons are significant starting with the fact that horse racing is also a transient sport. It's all over the country at any given time and that's not just racing, it is the sales or visiting your training facilities, so there's an automatic fit with what we do in terms of the transportation or utility aspect of it. And then there's just a nice overlap of ultimately folks that have wealth that are participants in racing that are also is going to be exactly in the wheelhouse of who would use our product. So racing aligns really nicely with what we do. And I tend to think we integrate into racing very well. So whether that be the partner or sponsor in a race, or that is part of an experience that we integrate into racing, it feels very natural.
CC: Any suggestions on what racing and the industry can do to have measurable growth in identifying new owners?
AC: Horse racing has always come off a bit as a closed sport and if you're not careful, you're not going to be successful or grow. I would say that opening up the visibility of what it takes to purchase a horse and what's involved, that's an educational experience that people should know about. Embracing the democratization of ownership in horse racing as another path of participation needs to be at the fore front of growth by encouraging how to join a syndicate, or purchase a MyRacehorse micro-share. Embracing innovation is one of the reasons that we've been in business for 20 years by inventing the whole concept of Jet Cards, but we have to innovate every year in order to continue to appeal. Additionally understanding the age shift is critical to find your target audience. When I got into the business, the demo showed people in their late '60s flying private, that's dropped 10 years because wealth changes and you've got to understand how wealth changes. So I would just recommend, like a lot of businesses, that there really has to be more innovation and more transparency into the sport and a keen understanding as to where wealth is being accumulated to identify the right prospects.
CC: Where should racing invest both its financial and human capital to attract high net worth individuals into the sport?
AC: Number one is figuring out how to leverage investment in educating a high net worth consumer why they want to be a horse owner, how exciting the sport is, but also what it takes to be a horse owner. I think that's an important investment.
Two, I feel like if you're looking to really expand the reach of ownership and the visibility of it, it's really about exposure. Partnering with someone like us to bring our clients in to become racing fans and introduce the sport and have an opportunity to experience its lifestyle because many that make up the possible consumer base of the sport have never been exposed to it.
CC: Once the industry secures investment from a new owner, what should racing do to keep these individuals engaged and participatory with the sport?
AC: It goes back to how you innovate on the sport and about the various ways to own a horse and the path to that. More importantly, I think you have to really keep thinking about how you drive your experiences. The better your experiences are, the more people you're going to attract. It's the same way that we get referrals in the private jet business. The experience around horse racing has to be an exceptional one. When you make it more of a closed door society, or one that's not as welcoming, that's just akin to a bad service experience and you're going to get the same reaction. In fact, a rule of thumb is that a negative service incident is retold 43 times which will lead to a lot of poor referrals that will damage the image of ownership and make it that much harder to drive people to the sport.
Carter Carnegie is President of Metrical Consulting and has over 30 years of experience as a sports business professional both in racing and working with sports leagues/events such as the NBA, NFL and Olympics. Metrical offers marketing solutions and business strategics to brands as well as sports properties.