Sales companies adapt to changes in technology
story by Barbara Hesselgrave
Whether it is a holiday dinner, an annual family destination, or corporate achievement award, we all appreciate the security and comfort of time-honored traditions. This year, however, puts those to the test as brides and grooms, graduating seniors and religious celebrations are sidelined by larger global health concerns. When tradition is disrupted, there is often a subliminal fallout and anxiety that things will never be the same again.
Two traditions, the Lexington Selected Yearling Sale and the Standardbred Horse Sale, also promise to look and feel quite different—or will they?
“After 9/11, this was really the worst time,” Stewart said. “But realistically, we could not in good conscience feel sorry for ourselves. People were going to funerals, and grieving for friends and loved ones. So while this year is different, it does have some similarities.”
Stewart added, however, that times have changed and people no longer have to attend a sale in person.
“The latest technologies afford every buyer the opportunity to learn about each horse, and you can watch action videos as often as you want,” he said. “Years back, people used VHS tapes, mostly for trotters and less so for pacers. But they would watch one-minute segments over and over, and by the time the sale day arrived, they had seen that horse move repeatedly and had a real familiarity with the animal. Of course, now, there is no end to online opportunities to create a compelling and accessible ‘action resume’ for a seller’s pre-sale review.
“When we started 40 years ago, however, there wasn’t any of that, and buying and selling was very much a relationship-based situation between farms, consignors and buyers.”
Stewart cautioned, however, that you must be selective in how you deploy these marketing techniques. Just because a horse is on Facebook doesn’t mean it is reaching buyers.
“It’s my thought that while it’s important to have a lot of exposure, it has to be the right kind,” Stewart said. “The people looking on Facebook may be a younger age group, not part of the population that is older, more financially established and is able—and anticipating—a half-million or more for the right horse.
“It’s like anything else. There are levels of price and quality and the buyers to fit those categories. For us, we are in our 40th year of yearling consignment and we sell 100-120 at Lexington and 40-50 at Harrisburg and a few in Ohio and other places. We’re unique in that we are the largest farm that does not stand any stallions. But this year, the video and promotional techniques are what’s going to save us in an uncertain time. We can’t assume all the regulars will be willing or even able to travel to these sales, particularly overseas buyers.
“So these videos will be crucial and a few weeks before the sale dates we will have those productions completed. They will depict all our sale horses walking to and away from you, and we will have an editorial on our website that will talk further about how many we have and so forth. The focus at the end of the day is really to make sure you do a good job; make sure each horse gets what he needs to make him all that he can be.”
In Stewart’s opinion, partnerships as an ownership option have worked well for the industry, as many people want to own horses, but they don’t want to do all that it takes to get them track-ready for optimal performance.
“We started out with leased mares and that worked so well we found partnerships were a good path to pursue in this business,” he said. “You share the risk. We do the work and pay the bills, split the stud fee, and then when you have great performers down the road, you share in those rewards as well.”
Despite discussing the advantages of doing business with new technology, Stewart said that one thing has not changed. Tradition persists despite all odds.
“These sales are our conventions,” he said. “You anticipate and look forward to them each year, and it’s the one time when you can all meet and literally live the dream looking forward to that one horse that can change your life. How many times, and where else, can you do that?
“The bond between horses and people is some kind of subliminal connection and we have enjoyed success in almost every arena due to the horse that got us where we needed to go to explore, to learn or expand. An online auction might be the rule for the short term, but the truth is, it can never substitute for the relationships, excitement, and exposure to the real experience of the sale day.”
The catalog of entries for the Standardbred Horse Sales Company, Inc., known widely as The Black Book, has a long and colorful history as described by president, CEO, and treasurer Paul Spears.
“While I have been around this business my entire life, I officially became part of the organization after a career practicing medicine,” he said. “But I will never forget my own personal experience of sale magic when I was very young.
“I had accompanied my father Paul Spears, the then-president and CEO of the company, to the Harrisburg Sale. This sale and our company had already enjoyed a 30-year history of selling Standardbreds, going back to the ’30s when it was originally founded by Lawrence B. Sheppard in 1939 as a venue for Hanover Shoe Farms’ yearling sales. But I’ll never forget that one experience in 1963 when I saw a horse enter the arena that really caught my eye. I still can’t say what exactly it was, but I was mesmerized even at that young age, and I somehow knew I was looking at a special animal.”
Spears said this is not a unique experience and many buyers have shared similar sensations.
“As it turned out, my instincts were right,” he said. “The horse sold for $50,000 and his name was Bret Han-over, one of our all-time Standardbred stars and pacing Triple Crown winners.
“After my dad took over the company, The Black Book became the default name for our sale catalog and it lives on today, in print and online. While we run the auction, people often wish to consign their horse with us. The larger farms like Hanover Shoe, for example, have their own consignor. But people who don’t want to represent themselves will get in touch with us and then after an intense review of their situation, we will provide them with a list of appropriate consignors that align with their location, type of horse, and other factors.”
Spears added that a seller can sell and represent themselves and some do, but if not, the first step for a seller is to choose a consignor.
“And if you don’t do it yourself, you must select a consignor to get in the sale,” he said. “It’s very unusual for an individual to bring one or two yearlings and sell them on their own. They can, but it is more common for broodmare or racehorse sales.”
Spears said the five-day Harrisburg sale starts out with a bang.
“These are about 175 horses that we have evaluated and are the most select of yearlings,” he said. “The second day is slightly less select, and the third day is normal select day. Then on the last two days, we have a mixed sale of first weanlings and yearling broodmares and then stallion shares, while the last day is for racehorses.”
Just as the horses represent a different category each day, so do the buyers.
“The highest rollers stick around for Monday, maybe Tuesday, and then those who are looking for value show up for Wednesday. This year, however, is unlike any other and we are going to prepare as best we can not knowing what the future holds. We are concerned about people needing to travel. But we are in the process of making special arrangements, as well as expanding our telephone bidding which will be particularly valuable for our overseas bidders.
“We’ve also spoken with our consignors and encouraged them to consider expanding their yearling videos. Typically, these depict the horse trotting up and down a fence line, but we are suggesting they include walking to and away from the camera, as you would see at the auction. And they can also add conformation shots with descriptions of size, and views of all sides to really enhance the overall picture.”
Although in the past there has been very little telephone bidding, Spears thinks that will probably change this year for buyers who don’t want to travel.
“They will most likely have someone on the grounds to be their eyes and ears in person,” Spears said. “What usually happens is if someone can’t attend in person, they will prearrange a person that bids for them live. We did internet bidding a few years ago, but this year we will also do a live stream so you can watch live by going to our website and clicking the link for live stream.”
For both buyers and sellers, Spears emphasized that success can be maximized by doing your homework.
“Spend time at the boarding farm where the yearling was born and raised,” he said. “Watch it and watch it a lot as it grows up—this is what the most successful trainers do. They know these horses from day one and when you are ready for a buying decision you are armed with a complete wealth of knowledge to make that big investment.”
Finding the right balance between old and new is the marketing challenge that Adam Bowden, founder, and president of Diamond Creek Farm, relishes taking on every day.
“We began in 2005 with raising mares and foals and selling yearlings to now standing stallions, racing, and selling,” he said. “So we are an all-round service operation. Right now, we have 140 acres in Pennsylvania, 260 in Kentucky, and another 40 as a retirement farm for the older generation to live out their lives in a good place.”
Bowden assessed the behavior of first-time sellers.
“Typically, way too emotional, which is understandable,” he said. “It’s their first time in the arena of selling and they are very attached to the animal and they think their horse is worth much more than it actually is sold for. It’s tricky for us as the seller to convince them to be realistic, but we think that we do a good job evaluating value. Our value and expectation are different than theirs on this first-time-out sale.”
Bowden said it took longer than anticipated to get to the place where the farm is today, and it is not an overnight process.
“We’ve been selling for 14 years and the key is adaptability,” he said. “Every year we do something different to help optimize our yearling, whether it is a worming protocol, exercise. We look at what we can do and what each horse needs as an individual. Every horse has its customized regimen to make the most of his potential versus a one-size-fits-all approach.”
Recognizing that not everyone is tech-savvy, Bowden said that millennials are the people Diamond Creek wants to reach as new owners. But he does not overlook the value in the tradition of established personal relationships with older buyers.
“We have customer relations people where their single most objective is to stay in contact with people encouraging them to breed with us and to sell through us,” he said. “It is a very one-on-one investment of time that can develop those important, lasting relationships that are the hallmark of this industry.”
On the other hand, he said Diamond Creek uses all the new media for market awareness. For instance, each stallion has his own Twitter account.
“We develop a unique personality for him and there’s a huge following,” Bowden said. “Facebook, Instagram, and Twitter—we use it all. But, the best thing about today’s social and electronic media in terms of buying and selling is it is virtually a free medium for advertising and promotion and can be accessed by anyone across the globe.
“Plus, we do live broadcasts around the farm and have ‘Creekside Chats’ every Wednesday at noon. And in this era of social distancing, it is a perfect way to stay in touch and allow our horses to be seen and share a particular message or story on what we are doing in real-time.”
Bowden said promoting the farm helps attract people to the sport simply by opening its doors. Each June it hosts an open house and invites the public.
“The first time we did this we got 50 people and now we have 700,” he said. “It’s turned into an educational day, and people who knew nothing about horses, Standardbreds or racing come away with a huge impact that can translate into becoming a buyer, or simply an appreciation for what we do. You never know how this activity can turn the hand of a prospective buyer.
“There’s a lot of negativity that there are too many old people in the sport, but my thought is there is a reason for this. By the time you get financially established and have the kind of disposable income to spend on buying, breeding and racing, you probably will be older, unless you inherited a legacy while very young.
“So once people get to that stage, they are willing to make the investment and they may also have a better temperament to withstand the risk in successes and failures that are part of this endeavor.”
In any case, Bowden said that not enough people do their research to enjoy the success they might.
“After college, I worked as a farrier in Kentucky and bought some mares and foals, but I spent five years just collecting data,” he said. “I wanted to find trends; I watched sales; I tried to find where there were niches for me to make the jump into this. Sellers need to do their homework on other sellers; you have to know your competition.
“And you have to know how to leverage your horse’s lineage. Develop your own foundation mare and build on quality. It’s a long process and requires thought, commitment, and dedication. Then, when you go to sell, you’ll have quality horses, a great story to tell, and ultimately that’s what buyers want to see and hear.”
Barbara Hesselgrave is a freelance writer living in Maryland. To comment on this story, email us at email@example.com.