Saratoga Race Course and the Boutique Theory of Business

Posted by John Scranton – July 20, 2011

On Friday afternoon, the racing meet at the historic Saratoga Race Course begins.  The track will host many of the premier thoroughbreds in the country, and many from abroad.  They will offer elite racing on a daily basis, attracting tens of thousands of visitors and tens of millions of dollars.  The racing is so exceptional that NBC has contracted to nationally televise portions of the meet – the only regular broadcast of racing on network television.  So how has this great institution remained at the pinnacle of their industry for a century and a half?

They have applied the boutique theory of business.  Best articulated in the compelling book Small Giants, they have chosen to be great rather than huge.  By limiting the length of the meet to 40 racing days, Saratoga offers a stakes race each and every day.  They even provide 35 Graded Stakes races (the best of the best), nearly enough for a daily all-star event.  By electing not to extend their meet and dilute their product, they continue to offer the premier racing meet in North America year after year.

This concept can be replicated in nearly any business.  For a small operation, focus on delivering an exceptional product or service to a limited group of clients.  Become the best alternative they have available so they keep coming back.  Repeat sales are much easier than finding new customers.  For a large organization, allow a division to self-manage and act as a boutique.  Suggest they dominate a niche market, become the premier solution and remain that way – even at the expense of growth.  Focus on your core competencies and use them to become elite in your space.  Being big is nice, but wouldn’t you rather be great for 150 years?

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Posted in: Business, Horse Racing
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We are nearing the midpoint of the historic Saratoga Race Course annual meet. It seems like the racing began only yesterday. Saratoga is renowned for attracting the most elite horses, trainers and jockeys. This is accomplished by presenting a schedule of high quality races with high purses over a limited period of time. The scenic beauty of the area is an added bonus for horsemen and fans. Lasting only 40 days, this exclusive race meeting seems to fly by every year. Meanwhile, the Discovery Channel is hosting something called Shark Week.  Apparently, this is a brief series that many people look forward to each year.  The appeal and the ratings of the show are dramatically increased by its exclusive availability. So what do Saratoga and Shark Week have in common with StartUpSelling? Limited availability. StartUpSelling creates territory exclusive relationships, only helping one agency in a specific marketplace reach their objectives. In all three cases, the quality of the product or service is enhanced by its exclusivity – avoiding the dilution that takes place during over-expansion. Limited availability ensures you have only the best racing, the best shark footage and the best marketing and lead generation talent.

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Posted in: Business, Horse Racing, StartUpSelling
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Some Recent Articles to Get You through the Week

  • Posted on January 7, 2011
  • by John Scranton

Next week I will be taking what is called a “working vacation” – meaning I will still be working, but from a warmer climate.  Anyways, I will be taking the week off from blogging, so I will leave you all with a series of links to some recently published articles.  Enjoy!

Insurance Agency SEO

If your organization happens to be a benefits agency in Lincoln, Nebraska then you should show up on Google page one when someone searches for ‘health insurance NE’ or ‘employee benefits Nebraska’. There are many insurance agency executives who agree with this statement and believe their IT department is working on a solution, yet are surprised when their agency name does not appear on the major search engines

Our insurance marketing agency sees signs that the economy is picking up. My contacts in a variety of industries seem to echo this sentiment and share varied and sundry examples indicating that conditions are improving. Many experts believe that 2011 will be a positive year for growth and productivity. That being said, the real question is whether or not your business will be poised to take advantage of the opportunities in 2011, aside from the rising tide theory with the incoming improvement

Small Giants, by Bo Burlingham, is an excellent read for all proponents of small business. Following the framework of Built to Last, Burlingham studies a series of companies who have been tremendously successful. However, he instead investigates companies that choose to be great rather than gigantic – hence the title Small Giants.

Cold calling and telemarketing have gone hand in hand with the insurance agency market for many years. Successful agents have built their books with cold calls and successful agencies have employed telemarketers to take their organization to the next level. When I was an insurance agent, cold calling was like a rite of passage – something that had to be done before you could advance and excel.

This is a story you have probably seen several times. It is sort of a business proverb. Most famously shared by Jim Collins and Jerry Porras in ‘Built to Last’ – this is a story told to new Nordstrom employees and exemplifies the superior customer service they are expected to deliver. At first glance this story shocks most of us. It defies capitalism.

I recently read An Empire of Wealth by John Steele Gordon, a fascinating look at the history of the American economy. One specific passage, discussing the simple brilliance of Commodore Cornelius Vanderbilt’s steamboat business model struck me profoundly. Gordon writes: “The Commodore’s business model was simplicity itself: (1) run the most efficient, lowest-cost organization possible; (2) compete fiercely by means of price […]; and (3) live up to your agreements.”

I like to think that I am a capable salesperson. I inherited the sales “gene” from my father, and I have been able to make a career of selling or helping other organizations sell. However, a truly honest assessment shows that I am not even the most skilled sales professional in my own home. That distinctive honor goes to my dog. In case you are wondering, he is a three-year old hound mix named Flash.

Not long ago, I spoke to an agency owner who had attempted to launch an eMarketing campaign. He had engaged with a high-profile agency marketing company to use their email platform, and purchased 30,000 emails from a vendor they suggested. He sent several messages over the course of a few months, and received absolutely no opportunities – only SPAM complaints. This is the danger of using an eMarketing platform without the required expertise. What you don’t know can kill you – or your domain

During my days as an insurance agent on the road – I often found it challenging to balance all the requirements of the job. Sales meetings, staff meetings, servicing clients, preparing for renewals, reviewing quotes, presenting renewals… I did not struggle with all of these things because I have poor time management skills (that is actually one of my strengths) – I struggled with all of these things because I tried to complete all the tasks effectively without sacrificing any sales time. Sacr

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Posted in: B2B Marketing, eMarketing, Horse Racing, Insurance Agency Lead Generation, Insurance Agency Marketing, Search Engine Optimization, Social Media
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Building Relationships through Celebrity Sightings

  • Posted on July 26, 2010
  • by John Scranton

My wife and I have lived in the Saratoga Springs, NY area for the past 4 years.  Each summer, the historic Saratoga Race Course opens for 6 weeks of fun and excitement.  I am an avid horseracing fan, and like to attend every Saturday if not more.  However, my wife has typically had her fill after the first or second visit.  This causes a little strain as I would prefer to spend my Saturdays with her, but do not want to miss my beloved Saratoga meet.

Yesterday, we finally solved the problem.  While walking from one group of friends to another, we saw Bill Parcells.  As I finished explaining to my wife why Parcells is such a hero to NY sports fans, we saw Kevin Dillon and Kevin Connolly (Johnny Drama and E on the HBO show Entourage).  Their fame required no explanation to Mrs. Scranton, who was starstruck and impressed that I shook their hands and wished them luck. 

Now she can’t wait to go back next week and search for celebrities while I handicap the races.  We finally found a way to meet our distinctly different goals using the same means.  When you do this with your clients, you can build a long-lasting and mutually beneficial relationship.  You want loyal clients who generate commission revenue, they want broader coverage and competitive premiums.  You want quality loss runs, they want fast and professional service.

When you cultivate a book of business that assists your clients in achieving their goals, you will be closer to reaching your own – and maybe you will get to meet Coach Parcells and Johnny Drama in the process.

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Posted in: Horse Racing, Insurance Agency Lead Generation, Insurance Agency Marketing
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When there is Blood in Streets – Invest in Marketing

  • Posted on June 25, 2010
  • by John Scranton

I live just outside of Saratoga Springs, NY – a beautiful city where horseracing plays an integral role in the culture and economy. The summer and Triple Crown seasons have begun to generate anticipation which energizes the city as the racing meet nears. However, the current economic state has jeopardized our great tradition.

The group that manages the track is running out of money and may not have the capital to continue operating much longer. This is a result of questionable fiscal management augmented by the national economic challenges. Fortunately they have a plan which will generate over $300 million in revenue and get them back on their feet. This plan will also provide significant contributions to the state education department at a time when our schools need funding. Sounds good right? Right!

The only caveat is that the state government has to choose a partner for the racing company and has been unable to do so for several months. The governor’s office recently shared a new cost cutting measure saving the industry $20,000 per day, while a file with a $1,000,000 per day solution collects dust. This is like gloating over saving money on pens while not returning a call to your landlord who is offering you discounted rent.

Before this becomes a political rant – sorry if it is too late – let’s compare this situation to the challenges agency principals and managers currently face across the country. Many agencies are struggling to grow while waiting for the economy to improve (and possibly for the market to harden). I speak with agency owners, producers and marketing executives daily and hear the struggles they face. Many have had to trim expenses to stay profitable. One area that is often cut is marketing – cutting back the ad or lead gen campaign to balance the budget. Sounds good right? Wrong!

I remember watching a Warren Buffet interview where he discussed his successes using the concept of “when there’s blood in the street, buy real estate.” He may only be the world’s 3rd richest man, but I still think he is right. If you want your agency to survive the challenging economic times, you must be willing to invest in growth initiatives even when you see blood in the streets outside your office window. Focusing on saving money on office supplies is ok – but not when you have a marketing proposal collecting dust on your desk that just might turn around your business!

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Posted in: B2B Marketing, Horse Racing, Insurance Agency Lead Generation, Insurance Agency Marketing, Small Business, Virtual Business
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