Racing Sponsorships Come and Go… but Twitter is Forever

In the mid-1980s, my wife, daughter and I moved to Southern California from Vancouver, Canada. I had a little office in a plaza and beside my office was a place that made ceramic teeth. One of the technicians in there greeted me one morning with a 4×6 photo of an open-wheel race car. An ex-Stuart Hayner/Wilbur Bunce Lola T320 Super Vee to be exact. He asked me if I wanted to buy it.

I didn’t know that I was in the market for a race car but apparently I was.

I only drove it once, but found fascination in the concept that this ‘thing’ could be used as a marketing conduit to sell stuff. My first sponsorship deal ever was with Circle Porsche Audi in Long Beach. I negotiated a parts discount for our race team in exchange for putting their logo on the massive rear wing of the Lola.

And so it began.

We moved back to Canada shortly thereafter and I gave the Lola back to the guy I had bought it from. Key word; “gave”. This would not be the last mistake that I made in motorsports.

I became consumed with motorsports as a marketing tool. I wanted to pursue this and did so with a passion. My ascent up the motorsports ladder was not unlike a driver’s. I started doing sponsorship deals in Formula Ford 1600s, then FF2000, Formula Atlantics, Canadian Superbike and more.

Creating an Indy Lights proposal for Jim Russell instructor Steve Wester in the early 90s got me into Gasoline Alley at the Indianapolis Motor Speedway and the rest is history.

The Steve Wester No Fear/Q107/Jim Russell/Big Brothers of Canada Buick March Wildcat

Fast forward to today, and I have to admit that I am disappointed, but not surprised, by what I am seeing in the sponsorship game in motorsports.

I think we are regressing.

There are some pretty common misconceptions that are still prevalent in motorsports marketing. We are a good 40 – 50 years into the business of sponsorship in racing, and we just should not be seeing some of the things that are happening today. We should be well past them.

Here are a few disappointing examples;

1) Run Good and We’ll Get Sponsored

Really? Do you still believe this? Ask Trevor Bayne or Ricky Stenhouse how they feel about that. How about Raphael Matos who has won a Championship at every level he has raced at – except the latest; IndyCar. Of all the misconceptions in the marketplace, this is the one that I wish were true. This is the one that fosters “ride buyers” and with ride buyers, the sport loses all credibility. “But Jim, as long as there has been racing, there have been ride buyers, and that’s the way it is.” I agree that this is the case, but the fact is that the best drivers are not ‘in the game’, and until they are, there is a credibility problem. But I digress…

Even SPEED thinks that all you gotta do is ask…

“Running good”, on its own, has never led to a sustainable marketing communications program. You still have to build on- and off-track strategies that solve business problems, such as increasing sales or proof-of-concept for your technology, as examples. Every single race team in the history of racing that has “run good” has lost sponsors. Seeing Roush Fenway and Penske Racing cars running around with words like “Roush” or “Penske” on them is all the proof that you should need. Last week, Kasey Kahne sat on the pole at the Martinsville Cup race with HendrickCars.com plastered all over the car. Not only do these teams “run good”, but Jack and Roger and Rick have a few connections and can get a meeting or two as required. They also have incredibly sophisticated marketing and sponsorship procurement departments. On the flip side, I could name lots of drivers who do not “run good” but have plenty of sponsors. If you think about it, they are also “ride buyers”. They are just using someone else’s money instead of perhaps family money. The companies that are buying rides for these drivers don’t care how they run. They have other assets that the sponsor finds appealing.

2) It’s My Passion!

“I love racing!”… or… “It’s my passion”… or “I just want to win!”. If you ever use words like “I, me or my” in your proposals, make sure they are followed with – as an example – “I only care about how I can provide measurable return on your marketing investment.” Or “My goal is to be a cost effective conduit between you and your desired client base”. … or… “This proposal is not about me, it’s about you.”  And if the company says to you; “Great!… how are you going to do that?”, your answer cannot be; “You can sponsor my race car!! Woooo-hooooooo!” You need to understand the challenges that the company you are talking to is faced with, and you need to know how to use racing-centric assets to fix that problem. You need to be a student of marketing and have a deep insight into how companies operate. Having said all of this, and to the detriment of most, there are drivers that get a ‘ride’ by running good. Every time that a driver wins a Championship and then gets a full-time paid ride, everybody stops learning about business and puts all of their focus back into “running good”.

3) All I Need To Do Is Tell Them That I NEED A Sponsor!

The icing on the “sponsorship is regressing” cake has been Kenny Wallace’s recent performance on Twitter. There’s no denying his passion, his sincerity, his accessibility or his desire.  He is what he is, and that’s why so many love him. But what he is doing… ‘tweeting for $$$’, is in my opinion…. ummm…let’s just say a step backward. Especially when you consider his tenure in the sport and his family’s influence and reach in the sport. Remember, his brother – and NASCAR Champ Rusty – had to shut down his racing operations because he was unable to provide a value proposition as a sports marketing platform for corporate America. Can you imagine the number of decision makers and influential people that the Wallaces have met over the years??

I think that Kenny Wallace will get someone to “sponsor” him. Someone will step up and give him $25K or $50K to say that they did it, get their hot pit pass and live the dream. But unfortunately, this model is not sustainable and it’s gonna end in tears.

Are there wealthy people that will spend their hard-earned money to support racing? Yes, of course there are. For the most part, they are called “team owners”.  These guys invented the well-known slogan; “How do you make a small fortune in racing? Start with a large one.”

Are there companies that could benefit from a well-executed motorsports marketing program? Of course there are…. but sponsoring you because it is your passion does not provide a sustainable business model.

Are there any companies left in the world that have NOT been pitched to sponsor a driver, rider, team, race event or series? I doubt it…. and unfortunately, most of those proposals are so bad that it will take many years, and countless success stories to get them to reconsider. Those bad proposals allow companies to actually have a written policy that states; “We do not sponsor racing.”

So…. what to do?

Become a student of marketing. Where do companies invest their marketing dollars? And why? How do they measure it? Who is their target audience? Once you know these answers, you need to be able to create a motorsports marketing program that meets all of their objectives, do so for less money than they are investing now, and with a measurably better return on investment. No problem!

Stop thinking that you are in the advertising game. Do you really want to compete with a billboard along the highway that works 24/7? Does a billboard have the costs that you have? Namely, a 53 foot tractor-trailer, 2 – 12 race cars, full-time employees and a rock star driver with needs? If you are playing the game by counting eyeballs, you’re done. Your program has to have a positive effect on every aspect of a potential sponsor’s business, not just some exposure metric where frankly, you can’t compete.

Stop looking for sponsors and look for value. Sponsors are everywhere. If there was a list of the Fortune 5000 (five thousand) companies in North America, my guess is that 99% of them sponsor something. You think that the only reason that they are not sponsoring you is because they do not know how badly you want to race…. and win. You are mis-guided. They are not sponsoring you because you have not provided them with a motorsports-centric solution to their specific business problem(s). You have not provided enough value. There are 100s of success stories where companies used motorsports marketing successfully. Study them. Find the case study of how Coca-Cola replaced all of the Pepsi (and other branded) vending machines outside of Home Depot stores in the USA. It is a fantastic, measurable success story that shows how motorsport was the conduit to a terrific opportunity for Coke.

Pull your head out of the sand regarding how hard this is. In the old model, all you had to do was show 3rd party data on your demographics, show your racing schedule, include a fancy graphic to show here their logos go…. and ask the simple question: “Would you like to sponsor me?” In today’s model, you have sponsors like Red Bull who are saying; “Your property (team, driver, series, event) does not address my business objectives so we will just go ahead and create, own and manage our own events and properties. We will also own the distribution rights and we’ll even go out and find other companies to sponsor our events.” This control over assets and audience is becoming more and more prevalent. And let me repeat…. they are getting sponsors – who could be sponsoring you – to sponsor them. They are taking those marketing dollars out of circulation. Does this concern you? It should.

The model; “Would you like to sponsor me so that I can win races and live my dream….??” is over. By employing this as your strategy, you are setting all motorsports back and closing the door for future opportunities.

Just stop it.

And for sure…. stop twittering about it.

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My Weekend with Hendrick Motorsports

Being involved in auto racing for over 20 years gave me opportunities and experiences that I could have never imagined possible.

One of the most incredible experiences happened in the fall of 2004 – courtesy of Hendrick Motorsports.

In early 2004, I had joined Formula BMW USA and had taken on overall series responsibility. Soon after the series was announced, Tom Purves, who at the time was Chairman & CEO of BMW North America, called his friend – one of the most successful BMW dealers in the USA – Rick Hendrick and asked him to participate in this new series. I am not privy to the conversation(s), but when the series debuted at Lime Rock Park in the spring of ’04, there was one open-wheel Formula BMW race car on the grid owned by NASCAR icon – Rick Hendrick. Mr. Hendrick didn’t own the team that operated the car, he just owned the car and was listed as the car owner. The driver of the car was Brian Frisselle (who now competes in Grand-Am in a Daytona Prototype), the sponsor on the side of the car was Lowe’s, and the car number was 48.

My contact at the Hendrick Motorsports was Christian Smith who is Mr. Hendrick’s right hand man.

As the season went on, I would send results, pictures, media coverage and other info to Christian and we would talk from time to time about how the series was doing. Through Christian, we arranged to have representatives from Lowe’s at the Elkhart Lake event, where we showed them the marketing assets available through our series, and the series that we supported.

Sometime in the summer of 2004, Christian contacted me and invited me to be the team’s guest at any NASCAR Sprint Cup race on the schedule that I wanted to attend, as a ‘thank you’ of sorts for their experience with our series. I selected the October Charlotte race.

I flew into Charlotte on Thursday night of the race week. The Busch race was Friday night, and the Cup race was Saturday night. Christian was to pick me up at my hotel on Friday morning, which he did, and we headed for the race shop.

Christian took me on an extensive tour of the Hendrick Motorsports compound which included the engine and fab shops, the shops for the Cup teams and the Hendrick Museum. At the time, the 24 & 48 teams were in the same shop and we did get the chance to chat with Jeff Gordon as we went through. Chad Knaus also took time to say hello and express his delight with his brand new BMW.

As we went through the Museum, there was an area that was completely blocked off. Brian Vickers was doing a television commercial and promos for GMAC – one of his sponsors at the time.

This tour took the better part of the day and we ended up back at the administration offices. Our schedule now was that we were going to meet with Mr. Hendrick and then go with him over to the track to watch the Busch race.

After a nice conversation with Mr. Hendrick in his office, he said “Alright… let’s go”, and those three words set off a choreographed series of events worthy of induction into the “Time Management & Schedulers Hall of Fame.”

First, we left the office through a rear door and entered a garage with a black BMW X5. With Mr. Hendrick at the wheel, we left the garage and I assumed we were driving to the track – which is maybe one mile away. I was mis-guided. We actually drove about 100 yards and stopped in front of a helicopter that has obviously just landed. Whenever the conversation of helicopters had come up, anytime in my life, I was adamant that I would never, ever get on a helicopter. Before I knew what had happened, I was strapping into a helicopter! There was the pilot – an ex-military pilot (of course) – and there was one other gentleman – the Chairman of Lowe’s. The flight lasted 45 seconds. I was petrified. That was my first, and last, ride in a helicopter… or was it?

When we landed, there were two black Chevy SUV’s at the ready. Mr. Hendrick, Christian and I got into one, and the Chairman of Lowe’s – the other. The paddock gates opened, the seas parted and we were wisked to Mr. Hendrick’s motorcoach.

When we went into the coach, we immediately sat at the kitchen table and a perfectly prepared dinner was placed in front of us. Steak and roasted potatoes. Spectacular. As soon as we were done, the coach door opened and two gentlemen entered. They were well-dressed, in their early 40s, and clearly friends of Mr. Hendrick. I figured out that one of the men was Mr. Hendrick’s doctor who had recently performed surgery on one of his knees. The other – who was quite chatty – I couldn’t figure out. I wish I could have recorded the conversation though. They talked about a recent charity event that they had attended and how they had tricked Jeff Gordon into all kinds of things that he had not agreed to for the auction. If I recall, the auction item was dinner with Jeff. Mr. Hendrick, in an effort to drive up the bids, told the audience that in addition to dinner, Jeff would pick the winning bidder up in his car and drive them to dinner. When that bump in bidding was over with, Mr. Hendrick then announced that Jeff would also pick them up “anywhere in the USA” in his private jet as well. These guys thought that was real funny. Not sure how Jeff felt about it. After they were gone, I leaned over to Christian and asked who that was. He casually answered… “That was the Mayor of Charlotte”.

We then dispersed to the track for the Busch race. We spent some time on pit lane, and then visited Mr. Hendrick’s suite, and then back to the pits… and then checkered flag…. and then back to the helicopter… what???

I grudgingly got on the helicopter for the return trip and we were joined by Mr. Hendrick’s son Ricky, his girlfriend and their pet monkey. The monkey did not appear to mind the helicopter ride and I am positive it sensed my overwhelming fear.

For Saturday, we drove to the track and Christian had lots to take care of. I told him that I knew my way around and we agreed to meet at the 48 team’s pit box one hour before the green flag – which we did. Christian then gave me some instructions. He told me to try to be in the 48 pit box area for the first pit stop – and then he said to make sure I was back in the pit box with 10 laps to go.

For the first pit stop, he escorted me so close to the action that I could have reached out and tapped the gas man on the back.

Great stuff… and then the rear tire changer scooped up some wheels nuts and set them on the wall in front of me. He told me “these are for you – but they’re hot – don’t touch them yet”. This was all part of the choreography I mentioned early and these guys had done this many times before. Christian told me I could stay there or go wherever I wanted to, but reminded me to be back – at the latest – with 10 laps to go…. which I was.

When I got back, I let Christian know I was there. Jimmie Johnson was leading the race by the way. Christian then said “No matter what – make sure you stay with me after the checker flag…. “.

Jimmie won the race…. Christian and I jumped over pit wall and we sprinted down pit lane towards Victory Circle. He ushered me in and told me to “stay put” and that he would be coming back to get me. I was there for the champagne and confetti, the interviews and the hat dance.

After about 30 minutes, Jimmie went to the media center, the crew pushed the car out… and everyone, including Christian left. This was midnight… by the way.

So… there I was… staying put. There were a few people lingering about, but it looked to me like it was all over. What should I do? Well… I waited, and sure enough, shortly thereafter… here comes Christian, Mr. Hendrick, Jimmie and Chad. Christian grabs me and tells me to come up for a picture with the guys and the trophy… which I did.

What a weekend. First class at every step of the way.

Sincere thanks to Christian, Mr. Hendrick and the rest of the choreographers for the great memories!

And of course now… if anyone ever asks if I have been on a helicopter, my answer is… “Yes…. twice…. it was Rick Hendrick’s helicopter and my second ride was with a pet monkey.”