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AKC Chairman of the Board Alan Kalter Shares AKC's Future Direction In Dog News Q&A

(Wednesday, April 23, 2014)

New York, NY – A Q&A between AKC Chairman of the Board Alan Kalter and Dog News’ Matthew H. Stander originally appeared in the April 11, 2014 issue of Dog News. The contents of the interview about the future direction of the AKC are reprinted here with permission of the publisher.

What steps do you propose to shift the tide of the thinking of the dog owning public to acquire and buy purebred dogs as opposed to shelter dogs?

For the last 20-plus years there has been a well-orchestrated and successful social effort directing people to acquire a mixed-breed dog from a shelter as a viable option for a family pet. Since we are for all dogs, we support those in the public who choose a mixed breed dog from a shelter. We have programs to help those people be responsible owners and, through AKC Canine Partners, enjoy participating and earning titles in Obedience, Rally, Agility, Coursing Ability, Tracking, and Canine Good Citizen. The same is true for the purebred dogs re-homed by the rescue networks affiliated with our Parent Clubs – the largest dog rescue network in the United States and, we believe, the world.

For years, we have advised the public on questions to ask breeders and now we are advising people on questions to ask the shelter – all in the spirit that an informed owner is key to ensuring a forever home for the dog.

There continues to be a very large segment of the American public that prefers a purebred dog for a number of important reasons. People are attracted to type, size, and temperament – and the predictability of those three key characteristics. We have strong reason to believe that predictability of those issues is becoming more important in the quest to find the dog that is right for one’s family. In addition, in order to strengthen predictability, many people simply prefer to start their relationship with a puppy - which predominantly means starting with a purebred dog.

AKC launched strategic PR initiatives in 2013 aimed at improving the reputation of both purebred dogs and breeders. It is pivotal that we not only promote the positive values of predictable purebreds, but also the passionate individuals who are dedicated to the careful planning, raising and placement of those puppies. The more we educate potential owners on the life-long benefits of truly knowing the size, temperament, coat type and genetics of a dog in advance of their decision, the more the public will seek out breeders and purebred rescue groups. Tactics include targeted informational messaging on purebreds and breeders to our key demographics (young families and empty nesters), as well as the inclusion of breeders and veterinarians as supporting, expert voices in AKC media opportunities.

Our web properties and videos are excellent examples of how we are educating the public. We had over 300,000 people visit WOOFipedia in March to learn what is the right breed for their lifestyle, in addition to the 2.5 million people per month who come to AKC.org to learn about purebred dogs and events. Our AKC Entertainment videos have shown the true nature of our breeders and helped inform our WOOFipedia audience about the importance of having a great relationship with your breeder to ensure raising a healthy, happy dog. We have also launched the Breeder Education Network on Facebook - a great education tool with 4000 breeders sharing knowledge.

During the 20+ years of the shelter dog story, the AKC was unfortunately silent. We started building our public outreach architecture just one year ago. We are significantly ahead of our plan, but regaining ground will take time, consistency, and a concerted effort joined by everyone in the Fancy to stand loud and proud about the unique attributes and benefits of purebred dogs. Working together, we can educate millions.

What is being done to increase registrations? Why have there been few if any direct proposals announced under your terms as Board Chair?

We are making progress in dog and litter registrations, thanks largely to a portfolio of initiatives. While still declining, the rate of registration decline has dropped significantly. The programs driving this progress include:

      AKC Good Works Campaign:  We are doing a much better job of telling our story of our Good Works, like the AKC Canine Health Foundation and AKC Reunite, and the connection to registration. We know this communication has a direct and noticeable impact on registration.

      Outreach and Education for Breeders:  We need great pet breeders to supply America’s demand for dog companions.  By helping all breeders produce better dogs and manage more successful kennel operations, we improve the chances that a pet owner will end up with a healthy dog.  Doing so also helps mitigate the A/R attacks on breeding.  The newest addition to this outreach effort will be a new breeder support program that rewards breeders who perform the health testing recommended by their breed’s Parent Club. This program, along with other efforts, allows us to educate and support breeders and allows the AKC to not just defend breeding, but to improve it.

      Improved Tools for Breeders:  AKC has developed a suite of on-line tools for breeders and dog owners including On-Line Record Keeping.  Late last year, AKC introduced Breeder EZReg, an online tool that gives breeders an easy way to ensure all of their puppies are registered. Breeders who use it enjoy significant discounts on fees, complete naming control, plus other advantages. More and more breeders are using this new tool to register all of their puppies.

      Breeder of Merit:  Breeder of Merit recognizes breeders who participate in the sport of purebred dogs and breed healthy dogs. Participating breeders pledge to make certain that all of their puppies are registered.  Since its launch in 2011, Breeder Of Merit breeders have increased their rates of registration sufficient enough to increase AKC registrations by more than 60,000 dogs.

      On-line Breeder Classifieds:  We are currently working on helping breeders find good homes for their puppies and prospective owners find good breeders as a source for their puppies. This is an important part of growing registration and sport participation. To help accomplish those goals, the AKC Breeder Classifieds is getting a major overhaul that will deliver a much more consumer-friendly experience and therefore, a better showcase for AKC breeders and a better platform to increase the likelihood that someone searching for a companion animal finds an AKC puppy. Look for the introduction of this great new tool very soon.

      Registration Marketing and Registration Bundles:  In 2012, AKC launched an effort to directly market registration to the new owners of AKC Registrable puppies.  Using state of the art marketing techniques, AKC has been able to convince more and more pet owners to go online or mail in their “blue slips” in order to complete their registration.   Marketing campaigns targeting breeders were also implemented to reinforce the importance of puppy buyer registration to the AKC’s ability to grow and support the sport of dogs.  Additionally, the AKC has begun to successfully improve the registration value proposition by bundling other services such as AKC Reunite and AKC GoodDog! Helpline to the completion of a registration.

      Social Media:  AKC’s outstanding results in the social media sphere, including Dog Lovers Blog and the AKC Breeders Facebook group, has created multiple platforms for addressing animal rights driven attacks on breeders while also creating a space to show off what is special about those who dedicate their lives to our sport.  We have no doubt that defining our sport on our own terms to such a wide audience is having a positive impact on registration rates. 

It would appear that your philosophies towards conformation shows is to encourage quantity over quality in virtually every area whether it be territoriality, number of shows to be held, judging standards and the like.  What is your opinion of holding competitive conformation shows and what standards other than financial considerations are the foundations of your beliefs?

The essence of conformation events is for breeders and owners to evaluate their dog(s) in a competitive atmosphere against the standard for their breed. As a breeder, I believe conformation shows are an important tool in helping to determine a breeding program - much like studying pedigrees and genetics, and utilizing all the applicable health screens. A critical component is a knowledgeable judging community – a priority for Parent Clubs, the AKC Board, AKC Staff, and me.

Certainly, there is the sport component, which makes it exciting, and the social component, which makes it fun.

Ensuring the future of Conformation events is a critical commitment of mine. My greatest concern in this area is the sustainability of our All Breed clubs. Many of those clubs are undergoing severe strains today, particularly financial strains. This issue is most evident in our smaller events – those Conformation shows with an entry of less than 500 dogs.

I believe it is necessary to help those clubs continue to provide a dog show for the public – a great way to continue our education of the public about purebred dogs. We know that the elimination of a dog show results in lost participation in Conformation. A small portion of the entry is absorbed by other shows, but the majority of the exhibitors simply do not enter a substitute show. We also know that people begin their Conformation journey at a local show. Lose that show and we lose a part of our future forever.

Some clubs told us they would be in a much more tenable position if we allowed them to have two shows in one day – amortizing big costs over two revenue opportunities for the club. We are testing that concept now and I believe a number of clubs will benefit significantly. For the exhibitors who choose to participate in both events, it will be a great benefit for them, also.

For those who see this as simply a way for AKC to increase our own revenue, let me make this clear: the AKC loses money on events. While events are not a source of excess revenue (profit), they are an important part of our mission. On the other hand, our clubs must be able to make some money on their events in order to be sustainable. Our objective for the two shows in one day program is to help them get to that level.

Although you did not ask about other AKC events, it is worth noting the continued success of Agility. It is our second largest and fastest growing sport, with over 1.1 million entries in 2013. The National Agility Championship had an entry of over 1640 dogs representing 112 breeds from 48 states and Canada. The Championship was held as part of the AKC Companion Events Extravaganza March 27-30 in Harrisburg, PA. Over the four days, a record number of dogs (over 2000) competed in the AKC National Agility Championship, AKC National Obedience Championship and the inaugural AKC Rally National Championship – crowning the first AKC Rally National Champion.

In addition, we continue to make strong progress with AKC Canine Good Citizen and our new AKC Community Canine programs. The CGC title was launched last year and already we have applications for 17,000 dogs. The new advanced level of CGC is gaining traction, with over 1000 dogs titled.

What is AKC doing to develop younger people to participate in the sport?  The emphasis within the corporation seems to be to ignore the junior participant situation or else to rely only upon competitive situations.  Why is there no organization such as exists in the UK which is devoted totally to the development of the younger person with regard to the care, welfare and health of the pedigree dog or any dog for that matter.

We know that families with children 8-12 years old represent a large portion of new dog owners. Connecting with those children, and their parent(s), is a critical outreach program for AKC. Our new website – WOOFipedia, Powered by AKC – was created specifically to reach the younger demographic with content written specifically for them. This is the first ever AKC communication program to reach this young demo – and we believe it will have great impact over time in enhancing the desirability of purebred dogs and creating a positive impression of the AKC.

We have significantly increased our broad-based reach to teens and young adults in the manner in which they relate to one another and the world – social media, particularly mobile. Our growth in this audience has increased 70%. Winning the hearts and minds of younger people is a path to the future – a path we are finally on and making great progress.

Of course, we continue to offer our traditional Junior Showmanship competition, which was introduced in 1932 and became a formal event, governed by regulations in 1971. We enhanced the Junior Showmanship program by recognizing dogs handled by Juniors to a title in any of our 17 other sports with a special certificate of achievement. In addition, we created the National Juniors Organization in 1995 and reach out to state and local 4H Clubs encouraging enrollment. Once enrolled, the Junior receives The AKC Junior E Newsletter, with news and advice relevant to them.

We are always investigating new programs that resonate with young people and motivate them. With the help of The Kennel Club, we are evaluating their Young Kennel Club program to determine its applicability to the United States.

What is AKC's position toward foreign kennel clubs generally and the FCI specifically?  A somewhat unannounced meeting was held between AKC and FCI in January which results have never been made public.  AKC now will not invite foreign judges to adjudicate at the AENC effective 2015-where are we headed with regard to recognizing and working with foreign kennel clubs and/or organizations?

As for some alleged policy that “AKC now will not invite foreign judges to adjudicate at the AENC effective 2015” - your statement is absolutely and completely false.

AKC maintains excellent relationships with other kennel clubs and recognizes approximately 195 registries in 80 countries.  We leverage the worldwide attendance at our show in Orlando to meet with leaders of many kennel clubs; we also meet annually with The Kennel Club.  We are pursuing opportunities with a number of registries, including the Canadian Kennel Club.  We have completed training of judges in Korea and provided many services in China as part of AKC’s Global Services initiative.

We also communicate with FCI and met in our office on January 3, 2014, discussing a large array of topics, including judging, changes in societal attitudes, health of dogs, and legislation.  One of the results of that meeting was to write to our conformation clubs providing information, under advisement of the FCI Treasurer, addressing the FCI policy on Judges charging clubs. 

Several points of common interest were discussed. The agenda included topics such as the cooperation between AKC and FCI with regard to the AKC Global Services Program, the communication between AKC and FCI, the list of American native AKC breeds not currently recognized by the FCI, and the list of FCI members from which AKC recognizes pedigrees.
  
Have the intense social media campaigns, which have been alleged to increase AKC's recognition and acceptance within the general dog owning population, shown any increases directly in financial gains in any area for the Corporation?

The AKC has always seen social media primarily as a communications platform and an engine that allowed us to talk to the millions of dog owners.

The social media campaigns were originally laid out as a three year plan based around three key success pillars for each of the three years - year one focusing on reach and audience growth, year two focusing on engagement and sentiment improvement and year three potentially driving revenue. However, the plans altered when we saw unprecedented engagement within the first six months. This allowed us to reset goals and to aggressively accelerate the plan. Within one year, we have obviously improved our audience and reach; have already shown an increase in AKC's recognition and acceptance within the general dog owning population; and we have seen revenue gains in both direct and indirect revenue.

Direct revenue from social media advertising has exceeded expectations in the first six months since opening this channel, has allowed for advertising revenue to increase at a rate of 2X, and the "net new" audience gained is responsible for a significant percentage of the income coming in on current AKC product lines. In addition, our social media program has been cited as part of the decisions driving significant revenue from licensing, advertising, and sponsorship arrangements.

Indirectly, our social media program, which allows the AKC to directly reach 10 million dog lovers each month, has helped the AKC have a very strong fiscal year in 2013 and a positive outlook in 2014 and beyond.

What is important to realize is that social media is just a component of AKC's multi-channel marketing and communications strategy. Through this program, we reach new audiences and engage all of our customers (the fancy, breeders, dog owners, and dog lovers) in two-way communications, to give them the best experience possible. We welcome people to communicate with us via social media, email, mobile, our web properties, our events, and our PR efforts - or by just picking up the telephone.

What governance changes within AKC do you think should be adopted in order to modernize the workings of AKC and how would you go about implementing any of these changes presuming of course you believe governance changes are in order at all.

The AKC Bylaws, which defines AKC’s governance structure and procedures, is basically a 1909 document that has been tweaked and patched for the last century, with specific amendments to the various sections adopted to address a specific issue that had arisen at that time. Major changes to New York State Not-for-Profit Law have recently been adopted and will become effective over the next several months. We will be carefully reviewing the new law and determine if it will permit us to adopt new Bylaws that will increase our efficiency, or whether the new law would actually mandate changes that would have to be made or should be made.

Every successful corporation today requires a governance structure that allows the ability to recruit the best minds with certain expertise and for agile decision-making. Boards of both public corporations and other not-for-profit organizations are able to assemble directors based on specific capabilities. While we have expertise valuable to the AKC within the Delegate body, we artificially limit our choices to about 600 individuals. As good as this resource may be, the option of including a few outside directors would be of significant business benefit. At the moment, the only option we have is an advisory group with specific business expertise – much like the previously established AKC Health & Welfare Advisory Panel – something I am working to establish.

The oft-quoted operative phrase in business today is “speed is life.” Our governance process for bringing change to the marketplace is detrimental to growth. The Delegates Field Trial and Hunting Test Committee voted unanimously at their March meeting to consider asking the Delegate body to change from a Rules-based sport to a Regulations-based sport for just that reason.

I believe due consideration should be given to both of these issues.

Why did you personally support the elimination of funding for the Canine Health Foundation?

Quite the contrary; I supported providing the AKCCHF with the opportunity to double their donations from $500,000 to $1,000,000 by providing matching funds for each new donor – defined as someone who has not contributed since Jan. 1, 2012.  In the recent past, AKC provided over $700,000 annually to AKCCHF - $500,000 as a cash donation, which must be used for health research. Plus AKC gives more than $200,000 of in-kind donations annually, which is made up of various contributions, including free rent.  Since the AKCCHF began in 1995, AKC has donated more than all other contributors combined.

We moved to the matching-gift approach again this year, as we have done in the past, to encourage and enable AKCCHF to broaden their base of donors.  Every year, the AKCCHF approves good health studies to improve canine health, but every year they fall short of the necessary funding to support all of those studies. This shortfall demands an urgent incentive for new donors to give now and for years to come.  Additionally, if a donor has an employee matching-gift program as well, every $1 donation becomes $3. 

Our matching funds commitment will allow AKCCHF to bring in $500,000 of new donor funds this year. Those donors are likely to be repeat donors for many years to come. The expansion of the donor base becomes exponential growth in the ability to fund studies as new donors continue their donations in years to come and more donors are added each year.

We notified the AKCCHF Board one year in advance of the decision to provide matching funds to give them adequate time to develop their program for 2014. In addition, I committed to Duane to utilize the necessary AKC resources to effectively market the program. I believe Duane and the AKCCHF Board, along with the soon to be hired new CEO, will effectively capitalize on this program to the benefit of all dogs.

Success will mean leaving no good study to improve canine health unfunded. What could possibly be better than that?

How much does the Corporation suffer due to the split offices if it suffers at all?  How much time if any do you spend in New York and/or North Carolina and how frequently does top management in either location spend in face-to-face confrontations?

Management wisely employs daily video conferencing, which enhances communication while significantly minimizing costs.  In the past every member of “top management” traveled to New York staying from Sunday to Tuesday evening or Wednesday, sometimes waiting two days in the “bullpen” only to appear in front of the Board for a short time.  In reality that resulted in about a dozen or more people traveling up and back at an expense in the neighborhood of $20,000 monthly.  Currently only 1 or 2 staff personnel travel for each Board meeting, a dramatic improvement in productivity and an expense reduction of about a quarter of a million dollars annually.

I had years of experience running a company with over 1,000 team members in 11 offices in three countries, so I fully understand how to learn and contribute without the necessity and wastefulness of in-person meetings.

With the expiration of the leases for both our New York and Raleigh offices in 2019, we have the opportunity to evaluate all of our options based on what is best for the future of the AKC. With Board approval, I established a real estate committee, chaired by Ron Menaker, and asked them to submit a recommendation to the Board this year.

I do believe that the free-flow of ideas is critical. Enabling that interchange on a regular, and sometimes informal, basis is extremely desirable.

If you could change anything philosophically about the direction AKC has taken under your leadership as Board Chairman what would that be?

My major philosophical direction includes:

  • Our recognition that we can no longer stay solely focused on the 400,000 people we have traditionally addressed. As such, we have very successfully enlarged our focus to include the millions of people who have a dog in their lives; allowing us to make new friends and believers every day.
  • Our earnest commitment to better serve all of our customers. While we are a registry and a regulatory body, we must treat all of our customers efficiently, effectively, and respectfully. Improving on this dimension is a key performance indicator for the AKC.
  • Our unwavering commitment to a program of relentless positive action, particularly in support of our clubs, our sports, and our registry. Our future demands innovation, which requires a steady stream of ideas; the intelligence to thoughtfully research and analyze them; the will to try them in the marketplace; and the strength to know not all of them will be successful.
  • Our passionate commitment to publicly and strongly stand up for purebred dogs, their breeders, and their owners – no matter how tough the fight gets.

I would not change any of that.