Know the Numbers

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Whether your business is just starting up or has been around for a long time, the challenge of making good business decisions never goes away. Mining the demographic information available about horse breeds, horse sports, and the people living in your geographic area can help horse business owners make better choices.

Demographics are those “vital statistics” about consumers that are coveted by marketing mavens and community planners alike. Federal, state, and local governments collect them and publish them in the public domain. Colleges and universities gather and study them. Many non-profit organizations are in the data business, too, and may give their numbers away to anyone who asks for them, sometimes for free.

Demographics cover a wide range of information. They can include raw numbers about horses registered in 2004 in a given breed, or about the children expected to attend elementary school in a specific county through 2006. They can range from the average annual horse expenditures by dressage riders for the past three years to the average household income from 2000 to 2004.

Your business questions are the starting point for finding the numbers that can improve your business planning. Ask yourself what specific statistics would help you choose among alternatives, validate your business assumptions, or make more accurate projections about business growth.

For example, those just starting out in the horse industry may wonder whether they are starting the right business. Is the breed or sport discipline they plan to work with growing in numbers, stagnant or declining? Where are horses or competitions concentrated geographically? How much money do people involved with the breed or sport spend on their horses? What town is the most likely location for a tack shop or other retail venture? What sports discipline is most likely to provide steady business for a horse masseuse, and where are people participating in that sport concentrated geographically?

Demographic information can help you understand your existing customers a little better, identify potential customers you may have overlooked, help you determine if price increases are practical, and guide you to intelligent changes when the demographics on which you based your business start to shift.

Once you understand what specific numbers will help you with your business decisions, the next step is to go after them. If you are computer savvy (and especially if you have a high-speed Internet connection that can download tables and graphics quickly), the Internet is the logical starting point when you start mining for your demographic nuggets (see sidebar). However, most information is also available the old fashioned way, via mail or telephone. In fact, those are still the best ways to ferret out useful published or unpublished data sitting in the files of sources that only maintain modest web pages. Calling your local town offices for information on projections about numbers of school-age children may be faster than surfing for the information online.

EQUINE STATISTICS

Breed associations and horse sport associations are rich sources of information. Breed groups publish data on overall breed numbers as well as annual registrations. Information about horses and members may be broken down regionally or by state. Most sport organizations publish data on their members, recognized events, and often on the number of horses participating. This may be broken down by state or region, too. These groups often collect demographic information about their members such as educational level achieved, age, gender, and income level. Joining specific breed or sport associations you are interested in may give you access to a wider range of information.

Many state horse councils gather and collate statistical information about their state’s horse population and horse industry economic contributions from federal, state and local sources. The American Veterinary Medical Association publishes information about livestock and pet numbers and the veterinary expenditures of their owners (for a fee—check to see if your veterinarian has a copy of the Association’s report you can look at).

Not all demographic information is highly accurate. Some groups regard horses as livestock (and therefore in the agricultural realm) while others regard them as pets. As a result, accurate statistics about the horse population nationwide or in a given state are a bit wobbly. For instance, the United States Department of Agriculture’s Census of Agriculture only collects information about horses on farms. So it misses a high percentage of horses. State numbers are usually estimates based on surveys that sample only a portion of the state’s overall population. Some horse owners show up on the demographic radar screen because their animals are on property tax rolls, they have equine business licenses, or some other factor. Other horse owners—and they can be a significant number—fly beneath the radar. So horse population statistics in a given state are usually just “educated estimates.” And this also accounts for the discrepancies you will find if you check both USDA and state horse council numbers on horses in a particular geographic area.

The American Horse Council (AHC) publishes general statistics about the horse industry on its website and in its annual Horse Industry Directory. If you want the details, you can purchase all or parts of the Council’s four-part report on the horse industry. The AHC’s Horse Industry Directory is a goldmine of contact information for anyone doing serious research on equine demographics. You get names, addresses, phone numbers, e-mail addresses and websites for a comprehensive list of breed associations, sport organizations, health organizations, state horse councils, sales companies and more. The Directory is a membership perk (at the $50 level) or can be purchased outright for $20 (see sidebar).

Equine publications (there are over 400 of them in the United States alone) can be a rich source of demographic information about the people affiliated with the industry in general and with specific breeds or sport disciplines in particular. Many of them hire marketing organizations to profile their readers. They publish these reader profiles in their advertising media kits to help potential advertisers decide whether or not the publication reaches the advertisers’ target market. Many of these media kits are now available online. You can also call or write the magazine’s advertising sales staff for the information.

PEOPLE DEMOGRAPHICS

Some equine business owners may be more interested in the purchasing power of people within driving distance of their location or in school enrollment projections for the next 5 to 10 years in an area they plan to relocate than they are in the number of horses owned by the average dressage competitor.

Federal, state, and local census information can answer their questions. The federal Census Bureau and Bureau of Labor Statistics both offer reams of household and salary data for research (see sidebar). The National Center for Education Statistics offers state-by-state educational projections that may help a business owner decide whether starting that children’s summer riding camp is still going to be a good idea five years from now.

To narrow your search, contact your local government for its school projections. Check with your local Chamber of Commerce to see what demographic information it collects about residents in the community. Also check with your local realtors to see if they will share the community demographic information they collect for potential clients. Pay attention to news reports about local trends that might affect your business, and try to locate the source.

USING STATISTICS

Mark Twain said that there are three kinds of lies: lies, damn lies, and statistics. Statistics are just the facts, ma’am. How they are interpreted, however, often depends on the perspective of the user. As you gather demographic data to use in your business decision-making, be sure you understand and apply the information appropriately.

As an example, let’s assume that two different sport publications surveyed 101 readers to develop a profile. One reports that its average reader spends $7,000 a year on feed and tack for her horses, while the other reports that its median reader spends $7,000 a year feed and tack. The number—$7,000—is the same, but the publications are reporting two very different facts. An average is calculated by adding up the expenditures by all of the 101 horse owners surveyed and dividing that total by 101. The median is determined by ranking the 101 expenditures from lowest to highest and then finding the middle value (the expenditures of the 51st horse owner). Which number is more relevant? Neither. It depends on the information you are looking for.

Another example is the way income may be reported. Which is more valuable: your community’s per capita income (the community’s total income divided by the total number of residents, including non-earning youngsters and retirees) or its household income (the amount of community income divided by the number of households in the community)? The latter is more likely to help you make pricing decisions.

Let’s say you are doing research on horse sports as you try to decide which one should be the focus of your new mail-order tack business. You note that the NRHA Reiner goes to 12,800 people, that Eventing USA goes to 14,000 readers, and that Dressage Connection goes to 33,000 readers. Since all of these publications are a membership perk for people who belong to their affiliated sport associations, you figure they pretty accurately reflect the number of active competitors who might buy and upgrade tack frequently. Then you notice that Dressage Today reports 42,700 readers, people who had to voluntarily subscribe to the magazine, and you begin to see a broader base of potential customers. These statistics alone would not be enough to make you decide that your catalog should focus on dressage tack. However, they would certainly point you in the direction of more research to see if dressage riders might be your best target market.

Consider the source of any statistics you use, and try to understand how the information was gathered. Much of the horse industry data available would not be considered “statistically significant” by researchers. Keeping that in mind, try to find multiple sources pointing in the same direction when you are using statistics to help you make major decisions. And keep in mind that often you will only have apples and oranges to compare.

For example, one breed association may have slightly inflated overall breed numbers because it does not remove a horse from its database unless the owner reports that the horse has died. Another association assumes that after a certain period of time, the horse is deceased and removes it from registration rolls whether or not the owner has notified them. Comparing those two numbers may not give you an accurate picture of the comparable status of those two breeds. However, if you use an individual breed’s data to track the number of annual registrations, you will have an accurate picture about whether breed numbers are increasing, stagnant or declining. And you would be able to catch the beginning of a trend before it caused major disruption in your business (many people who were into Shetland ponies in the 1950s or Arabians in the 1980s wish they had paid more attention to demographics).

Also, look at how old the data is, whether it is age-related, gender-related, or otherwise biased in some way because of how it was collected. These might not be reasons to disregard the information, only to use it cautiously.

In the end, demographics are just one of many tools you should use in your decision-making process. Statistics cannot tell you whether your current customers are more interested in winning prize money or chasing points for year-end awards. And they certainly cannot tell you what makes you go to sleep at night, looking forward to the next day.

Equine and People Demographic Sites

SAMPLE EQUINE DEMOGRAPHIC SITES

1) The American Horse Council: www.horsecouncil.org

2) American Quarter Horse Association: www.aqha.com/association/who/statistics.html

3) American Paint Horse Association: www.apha.com/forms/PDFFiles/annualreports/04annualreport.pdf

4) Arabian Horse Association: www.arabdatasource.com/FactDisplay.asp?id=4

5) National Reining Horse Association Statistics: www.nrha.com/statistics.php

6) American Veterinary Medical Association: www.avma.org/mebshp/marketstats/sourcebook.asp

SAMPLE PEOPLE DEMOGRAPHIC SITES

1) U.S. Census – State Quick Facts: http://quickfacts.census.gov/qfd/

2) U.S. Census Bureau Fact Finder: http://factfinder.census.gov

3) Bureau of Labor Statistics: www.bls.gov

4)?National Center for Education Statistics (NCES): www.nces.ed.gov

5) NECS Education Projections: www.nces.ed.gov//programs/projections/ch_1.asp#3

6) NECS Demographics by School District: www.nces.ed.gov/surveys/sdds/

7) Answers.com County Statistics: www.answers.com/topic/county-statistics-of-the-united-states

8) Home Town Locator: www.hometownlocator.com

—BK