Tag Archives: sponsorship

The Quest for the “Holy Tenth”

Posted on by
10

The following blog story may have references that resemble the real-life circumstances of my actual friends and acquaintances…. which is unfortunate.

“Looking forward to coaching today” popped up on my Twitter feed. The tweet was from a young American stud of a race driver who has an incredible racing resume. A young unemployed race driver, except for the occasional coaching and OEM ride and drive gigs. What really struck me about this was that another young up and coming go-karter had sought out professional coaching to gain that elusive 1/10th of a second – that “holy tenth” – even though the coach himself had not turned that elusive holy tenth into a viable racing career. To me, this would be akin to a medical student paying for tutoring from a former medical student who ultimately was not cleared to practice medicine.

Yes, that elusive 1/10th of a second…. that “holy tenth”.

The feeling was – and still is – that this holy tenth will lead to race wins, Championships and of course; sponsors; funding; corporate backing; partners… moolah!

So…. as young drivers are coming through karting and into open-wheel cars or sedans on their ascent up the ladder, their ‘team’ will spend thousands in search of the holy tenth. Many before them – and perhaps even their $500 a day driving coach – have actually found the holy tenth, and yet they remain unemployed.

I think owners and team managers get all goofy in search of the holy tenth as well. Invest $50,000 a day for testing – no problem! Invest $3,000 to have your marketing person attend a sponsorship and networking conference? – are you nuts?

Here is a sampling of the types of things that team owners, managers, drivers, parents and other supporters have always been able to justify spending money on;

  • testing
  • new tires
  • a better engine
  • a new race car
  • testing
  • data acquisition
  • shinier wheels
  • wind tunnel testing
  • 7-post rig time
  • a back-up car
  • new driving shoes
  • testing
  • a new 4-storey, 3 bed, 2 bath condominium for your pit box
  • a new website
  • CFD simulation
  • testing
  • driving coach(s)
  • fitness coach(s)
  • nutrition coach(s)
  • psychological coach(s)
  • motor coach(s)
  • testing
  • new helmet(s)
  • smaller, lighter, more reflective mirrors
  • a bigger transporter
  • new radios
  • iPads of course – w/carbon fiber covers
  • and did I mention testing?
Maybe I can find the holy tenth during green-flag pit stops by having a crew that does Yoga and eats Oreo cookies.
Marketing coach or new engine?? Marketing coach or new engine?…. No brainer!! You can’t dyno-test a marketing coach…
It doesn’t make sense to reach out to sponsors if I do not have a cool place for us to sign the contract….

These pit side condominiums are critical to success. This photo is actually outdated as the new condos have an elevator and parking; reserved and visitor. This team no longer exists because they lost their sponsors. Was it because of the holy tenth?

Some drivers even hire a “manager”. This “manager” will make sure that all of the team owners know if and when their driver finds the holy tenth. And then of course, their “manager” will negotiate the contract, commission the press release and hit up eBay’s “Private Jets” section…. right after they submit their monthly retainer invoice.

Now, I certainly understand that there are parts of “the job” that are undesirable. Some racers do not like to work out. Others could care less about interacting with the media. These mandated autograph sessions must really be bothersome to others. But to even consider that a young driver should become a student of marketing?? That… is…. ludicrous. Sidney Crosby and Tim Tebow didn’t need to do no marketing….

Think about it this way…. Let’s take two 14-year old racers – who are equal in every way, on and off the track – and have one of them mentored by a team of driver coaches, and have the other one mentored by a by a team of driver coaches PLUS a marketing coach. In the long run, which driver will be in a position to a have a sustainable career – as a racing driver – in motorsports? (If you answered…. “the one who found the holy tenth” – stop reading…. right now please…. no, really)

Hey, it sucks that talent is not the determining factor in racing today. But, until the organizing bodies figure out a way to create value-based sports properties instead of these cost-based ones, that’s the way it is.

As for securing sponsors, ten or 15 years ago, it was really more of a sales function. You were packaging your audience as an exposure play and just had to sell it. Today, if you want to play the exposure game, you’re done. In today’s search for sponsorship, you need to understand marketing – not sales. It’s a big shift, and it’s complicated.

A clear indication that someone has found the holy tenth… look at all of those sponsors!

Throughout my time in racing, I haven’t been shy about telling young drivers and their parents that they need to understand, and invest in, marketing. I can say without exaggeration that my message was offered to hundreds of drivers. Very, very few paid any attention.

“The holy tenth will set me free…”

One driver that listened was James Hinchcliffe.  Back in 2005, James, together with his parents took my advice. Imagine the look on all of their faces when I announced that James was going to be the Mayor of his own virtual city. That’s another blog story, for another day; “The strategy and tactics behind the Mayor of Hinchtown”. Stay tuned.

“Of course you can change the speed limit to 300kph in Hinchtown…. you’re the Mayor”

Ultimately you need to become a viable marketing platform that employs racing, as well as many other assets, to sell a company’s products and services. So, yes, the holy tenth is important – there’s no doubt. Testing, fitness and nutrition are all critical to success. And great coaching is mandatory.

But, you must ALSO be a student of marketing.

So…. make sure you get right on that, as soon as you and your driving coach get back from testing.

“Hey boss…. If we buy this $4 gagillion dollar car wax, we might finally locate the holy tenth,” explains team manager person. “Get two goddammit!!”

Racing Sponsorships Come and Go… but Twitter is Forever

Posted on by
3

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.

Canadian Superbike… Follow-up To My Rant

Posted on by
Reply

In my rant last December about the Canadian Superbike series, I mention that I had tried to reach out to influentials before I ever considered writing a blog story. But nobody wanted to talk to me about it. I get that a lot.

So, when I did set about to ‘rant’ about Canadian Superbike, I can honestly say that my goal was that one or two people of influence would actually reach out to me, and that we’d get together to talk about the current state of professional motorcycle road racing in Canada.

I had set my goal too high… well, not just too high, but out of sight.

Apparently, just about everyone involved believes that the current state is “just fine… thank you very much”. Certainly, everyone involved who has the power to make change believes that. Of course, there is every possibility that right this minute, behind the scenes, major positive changes are being crafted.

Or not.

Here is a summary of the feedback that I did receive. And let me preface this by saying that I do know that the original blog story was sent (not by me) to most, if not all, of the stakeholders in motorcycle road racing in Canada. OEs, sponsors, suppliers, riders, media, etc. I cannot confirm that they all read it, but the few I spoke with sure had. I am not going to name names here, but here’s a summary;

1. I got a phone call from a vendor to the series. This well-known gentleman was really disappointed with my approach and felt that if I would have reached out to the series organizers in advance, that they would have listened to me. I can tell you that my conscious is very clear on this point. I attempted to do exactly that, at least five times in 2010, and never got the call. But imagine if I did speak to them… “Hey I believe that the responsibility of the CSBK series is to generate CONTENT.  This content is to be used as an AUDIENCE AGGRAGATOR for its STAKEHOLDERS.“ Can you imagine the reaction that I would have got? This well-known gentleman who provides services to the CSBK series – maybe for a fee, I do not know – felt that the series was very well run. I guess the takeaway was that I don’t know what I am talking about. I get that a lot. That was in December and I have never heard from him again.

2. I spoke to a rider in the series. One of my points in the rant was that if the series does not provide enough value for the motorcycle industry to support it, don’t even think about going outside the industry for sponsors. This rider felt this is a valid point. I do not get validation very much. I have stayed in touch with this rider and have offered to be a sounding board for sponsorship ideas and brainstorming and we do that from time to time.

3. I spoke with someone who works for the Canadian head office of a motorcycle company. He admitted to reading my blog story, but you could see immediately that he was thinking; “Why did I admit that??” It was a very awkward moment for sure. He definitely did not want to talk about it, but he did say one thing that I found incredible. He said something like: “You know Jim, the motorcycle companies here in Canada are just not big enough to put money into racing.” I asked him to please consider what he had just said. I told him that “no motorcycle company in Canada should EVER put money INTO racing. None. Ever.” I suggested to him that “Canadian motorcycle companies should be investing in targeted marketing communication programs. These programs should use racing as proof-of-concept for their quality, service and performance messages. These programs should be designed to sell motorcycles, be trackable and sustainable, and there should always be a positive return on investment so that these programs never go away – even in the toughest of times.” He didn’t want to talk about it. I get that a lot.

4. I spoke to another individual who responded with this: “You seem angry….”. I confirmed this – “Hell yes, I’m angry. Motorcycle road racing is fantastic and I am angry that nothing is being done to stop its decline”. I agree that I need to chill out.

5. While at the Toronto Motorcycle Supershow out at the airport, another gentleman who is known and respected in the industry approached me and told me that one of the series organizers was at the show, and that he wanted to talk to me. “Super…. anytime…” was my response. This series official was 30 metres away from me at the time and that was as close as we got. I get that a lot.

6. And finally there was this from someone who has been around the Canadian motorcycle road racing scene for 30 years; “I hate to say it but the WHOLE thing needs to end and be reborn or it’s just going to be a further decline.”

That’s about it.

I readily admit that I need stop pissing and moaning OR do something about it. Well, what can I do? I now have 11 pages of notes with ideas and concepts, designed to not only resurrect motorcycle road racing in Canada, but globally. This is not a Canada-only problem. All motorcycle road racing worldwide could use more audience, more value for sponsors and increased return on investment right? While everyone is thinking about “cutting costs”, I am thinking about “increasing value.”

I am not suggesting that I am going to start a new, competing – for now – Superbike series here in Canada. To do that, I’d need the entire industry to come together to share new ideas and a fresh perspective, and certainly, they’d need to have open minds. They would have to leave “Because that’s the way we’ve always done it.”… at the door.

But… they’re not going to listen to me. I get that a lot.

And, In case you missed it, here is my original rant.

Jim

NASCAR’s Declining Audience – What would Steve Jobs do?

Posted on by
Reply

** I wrote this blog post on December 1, 2010 – 10 months before the untimely death of Apple visionary Steve Jobs. I still believe that Steve’s desire to challenge status quo and push creativity are the perfect benchmark for all to follow. RIP Steve. **

NASCAR’s Declining Audience – What would Steve Jobs do?

No matter how much NASCAR’s fan base has declined, I was reminded recently that they still have a massive audience. And yes, this is true. Whether it be a sports property, reality TV show or sitcom, most would be thrilled to have the large, loyal following that NASCAR still has.

Having said that, I still see reason for concern.

The first issue is simple. The audience is declining. This is a fact.

The second issue is also simple. The cost to participate is not declining. This is also a fact.

Let me address audience first. Growth and decline in audience are impacted by momentum. By attending a race, and/or watching on TV, fans get to join the conversation. The activity is validated by how many people are in the conversation, and you get this word-of-mouth growth. This used to (and did) takes years.  The conversations are sprinkled with questions like “Did you see….? Did you hear what (driver) did?” And when asked, you better have an answer and an opinion. So, the sport grows in popularity.

As soon as the conversation starts to contain language like; “I don’t care anymore”,  or “No, I didn’t watch that race”, or “I’m not going this year”, or “I can’t afford it”… the audience declines with steady, negative momentum.

Combine this with our new ability to communicate in real time, to likeminded people, all over the country(s), and you can see that momentum can and will shift faster than ever before, thanks to Facebook, Twitter, et al….

So, audience is declining, but it is still a large audience.

My other concern is on the cost side of the equation.  To put it in the simplest terms; the audience that Sprint will pay to reach today, is not the audience they bought. They paid for a larger audience. There are/were a lot of very clever people behind the language in those contracts – on both sides – so there might be clauses that increase the rights fee payable to NASCAR if certain audience metrics are exceeded. There may also be clauses that reduce the rights fees if there are declines in audience. If these clauses exist, NASCAR is getting lower rights fees, and that is not good. If these clauses do not exist, then Sprint is getting less value and that is not good.

And of course, where I used the word “Sprint” above, you could insert any team, series, or event sponsor. They are all getting less than they paid for.

TV rights fees are returned to the broadcast partners by selling advertising. Tough to make a profit – which they are entitled to do – with “less” audience.

The costs required to operate a race team, a race track, a licensed merchandise trailer or a hot dog stand have not declined. But their available market has.

On the race team side, in 2011, Roger Penske will end his 18-year sponsorship (partnership, loyalty, friendship) with Mobil1 and will move to Shell. Penske did this because he will get more ‘benefits’ (cash, in-kind, pass-through, technology, plus…). Okay, makes sense, but why would Shell move from Childress and Kevin Harvick – the team and driver that almost won the Championship? The answer is simple: audience. Penske brings an additional relevant, measurable ‘audience’. What the Captain has that Richard does not, is over 300 car dealerships that consume a massive amount of lubricants. With an overall decline in ‘audience’, Shell needed to find other ways to get measurable return on investment.

So, there are two strategies at play here. One is cost-cutting, and you can see that everyone is trying to do that.

To me, they should first and foremost cut the schedule. I could dedicate pages to the benefit of doing this. To over-simplify, let’s squeeze today’s audience into a schedule that will fill the seats at the track, and will re-energize TV numbers.

The second strategy is to grow or re-grow the audience.  And whenever I see a business in decline, I do what most of you reading this do. I ask myself a simple question: “What would Steve Jobs do?” (WWSJD)

So, if Steve Jobs was running NASCAR, he would declare that “the product is crap”, and that we need to “reinvent the customer experience with our brand!” Can you hear him saying that? I can.

He’d use technology  – at the highest level – to completely change the way fans consume the content. But he would not market the ‘technology’. He’d market the experience… the engagement. He’d make it cool to be a NASCAR fan. You would not just watch a NASCAR race on TV. You’d consume the content in a simple, user-friendly, meaningful-to-you, kinda way. At the track, it’d be same, only cooler.

Steve would also re-write the rule books and change the org charts of the teams. Technology would be encouraged that allows the fan to have a deeper understanding of the sport. This is key. The fan does not need to know how they got the content. They just need ‘content’ to deepen their relationship with the sport. When Steve rolls out the new iWhatever, his pitch always goes straight to the customer experience.  This is what he’d do with NASCAR.

And let’s be clear on technology. Formula1 owns “technology” in the mind of the consumer. That is not what we are talking about here. We are talking about the use of the highest technology for the benefit of the audience. Formula1’s use of technology is for braking, cornering, and accelerating… they can have that positioning.

As far as the org chart goes, they’d still interview Chad Knaus during the race, but they would also interview the team’s CEO – the “Customer Engagement Officer”. This person would manage how and where fans can consume their team’s content, in real time and on what devices. The good teams will build measurable audience by focusing on this deep engagement, and then learn to monetize it. NASCAR will want to do this as well, but the good teams will beat them to it.

Next, Steve would fire everyone associated with the television programming. No more Kenny Wallace…. Sorry! He’s just not cool enough. Steve would fix the TV product. If I knew how, then I’d be running Apple. I just know it’s broken – and that he’d fix it. It is the only TV that I watch that literally puts me to sleep. My family thinks it’s hilarious.

Steve Jobs would use technology that would allow fans to relate to the talent of the athletes. But he’d market the access and content, not the chips and ram and whatever else is in his box.

I think that “Have at it boys” was a necessary step – on the track.

I also think that Brian France needs to gather up his management team and offer them the same directive – “Have at it team!” – It’s time to make decisions for our brand with the belief that Steve Jobs will be presenting the ‘new’ NASCAR in a Keynote presentation.

It better be new and beyond cutting edge, and it better be cool…. And, it better be now.

Anatomy of a Motorsports Sponsorship Deal

Posted on by
Reply

The Sprint PCS Story

This case study, if it had a title, could be called “Credit where credit is due” – or maybe we would call it – “Yeah…. I did that deal”. That title would come from the ‘discussions’ held after the fact about how this partnership came together. Who ‘really’ made it happen? I am still not sure – but I’ll tell you what I saw….  from where I was standing.

Would it have happened without Arie Luyendyk – Indy 500 Champion – as the professional athlete and corporate spokesman?

Would it have happened without Fred Treadway as the team owner?

Would it have happened without Grant Haughawout as the show-car truck driver?

Would it have happened without the ‘Milkman’?

What would have happened without Square One – the decal/vinyl graphics shop?

We may never know…. they were all ‘involved’….. and oh yeah….  so was I.

In March of 1997, while overseeing all marketing, communications and sponsorships for Treadway Racing – a 2-car team competing in the Indy Racing League – I contacted both the Indianapolis Motor Speedway (IMS) and the folks from IEG (the sponsorship guru’s in Chicago). I proposed that we host a motorsports marketing seminar at the Indianapolis Motor Speedway sometime during the awesome ‘Month of May’ activities. We would invite up to 1,000 executives… decision-makers from companies not involved in the use of motorsports as a marketing tool. We had two strong credible industry forces to capture this audience – the Speedway, site of the world’s largest single day sporting event, and IEG – the global leader in sponsorship. So I crafted a letter, to be sent on IMS letterhead and under Tony George’s signature, that was sent to IEG’s targeted list of marketing pros. It invited these execs to a full day at the track on the Friday preceding the qualifications for pole position, which would happen on Saturday. We knew that to invite them to come on a Saturday would lessen the attendance significantly – despite the draw. Who would be willing give up a weekend, even for this? They would have breakfast with Tony George and 4-time Indy 500 winner – A.J. Foyt. They would then get a tour of the museum, including the basement where the good stuff is kept. Then off to Gasoline Alley, the team garages and pit lane – all of which require ‘special’ credentials. A tour of the corporate hospitality facilities, specifically the luxury suites overlooking pit lane, would be where they would end up. What wasn’t in the letter was that when we got them to the suites, they would get a soft ‘pitch’ on team and league level opportunities. This letter was sent to approximately 1,000 executives. Who showed up? Stay tuned…..

Sometime in mid-April, Grant, who then hauled around one of our showcars, was unloading a car at the Castleton Mall in Indianapolis. Why it was going on display escapes me, but here is Grant unloading the car when a young guy walks up and is intrigued by the car (that’s the whole idea – by the way). He quizzes Grant… how fast? how much? why no tread on the tires? how much power? – the usual.  The guy gets around to asking Grant why it’s there and Grant explains the ‘marketing power’ of one of our showcars. The guy then tells Grant that his company – Sprint PCS – is about to launch in the Indianapolis market and quickly figures out that he could use this car to help kick off the program. He hands Grant a card and is told that one of the marketing peeps from Treadway Racing will give him a call. The next day, Grant hands me the card at the race shop and tells me that this guy wants to ‘rent’ a showcar. I immediately take the biz card and hand it to the “Milkman’.  David, (Milkman) who was responsible for Business Development (finding new team level sponsors) calls the guy from Sprint PCS and they agree to meet and chat. Within just a very few days, a showcar request escalated to having our driver – 1990 Indy 500 Champion Arie Luyendyk – launch Sprint PCS – at a media event held at the Speedway, in the Treadway Racing suite. Arie would make the first call on the new Qualcomm manufactured Sprint PCS phone during the first week of practice for the 1997 Indy 500. To call the timing lucky would be an understatement. At this point, the ‘negotiations’ were with local market reps from Sprint PCS – out of Cincinnati I think.

By early May, the rsvps were returned from those executives who would take advantage of the ‘opportunity of a lifetime’ to come to the Speedway and get the behind-the-scenes look at this sports and event marketing powerhouse. Out of 1,000 invites, 11 people were coming, representing four companies. Wow… this is tough. But of the four companies attending – two of them that signed up did business together – Sprint PCS and Nortel. The executive from Sprint PCS was none other than Charles Levine – the newly appointed CMO for Sprint PCS.

Back to the local market event. Between business media and the racing media, the product launch/media event that was held at the Treadway suite at the Speedway went well enough with Arie that Sprint PCS asked for Arie and the showcar to be present at the first retail store opening which was happening in just a few days. We all agreed on rights fees, expenses and all that stuff real quick and within 48 hours, the Sprint PCS newspaper advertising was featuring Arie Luyendyk and inviting customers to meet and greet Arie – get autographs, photos and racing memorabilia. Now, it is important at this time to mention that a few key people were not involved in any way at this time – team owner Fred Treadway and Sprint PCS CMO Charles Levine. The store opening went well and Sprint PCS was seeing measurable results from the program at this level. Sprint marketing types from Cincinnati and Minneapolis were catching the drift of all this. At this point, there was great desire on my part, and on Milkman’s part to grow this program – Sprint is one of those powerhouse companies that bizdev folks get real excited about. We also knew the power of local market buy-in, as well as the power of buy-in from key ‘influentials’ below the person who ‘signs the checks’.

Friday May 9 came quickly but we were ready. Working in concert with speedway marketing types, we had a full day planned for our 11 attendees – all of which showed up. We went about our business of racing on that day. We had plenty to do – over 100 guests from our other sponsors were present. The suite was full of guests all day long. We were doing last minute contingency sponsorships including an agreement with Tom Floyd from Pennzoil. I mention this because as it turned out, this became a very lucrative partnership for us.

Somewhere after lunch, I reached out to one of the Speedway marketing people that was on the tour to inquire as to what the mood was like – I wanted to know how they were responding. I was told that one of the attendees really ‘got it’. He was talking about Charles Levine from Sprint PCS. I didn’t actually meet Charles until around 2:30 that afternoon. We had a brief introduction and I asked him if he was enjoying himself. He was ‘cool’… “I know what this all about”… was his attitude. I then asked what he thought about our local market efforts and he thanked me for what we had done. When I started to get into a little of the detail of those efforts, he cut me off explaining that he didn’t get too involved “at that level”.

I think it is important to point out that by this Friday, we (Treadway Racing) had been on track for 4 days – and that Arie had topped the speed charts every day. It was an intense battle with Team Menard where bragging rights, momentum and confidence were all on the line. Arie was very serious about being the quickest – and around 3pm on Friday, Arie again worked his magic – setting fastest lap of the day, on the track. All this time, Milkman and I had been brainstorming on how to get Sprint PCS involved and we decided to pull Charles Levine out of the tour to talk to him. I arranged to meet Charles in the Treadway Racing hospitality coach on the promise that it would only be a few minutes and we would quickly return him to the tour. He reluctantly agreed so Milkman and I bolted down there from the suite with a copy of a proposal that had been prepared for Kraco. (of Galles-Kraco fame – owners of Michael Andretti’s race car in the mid-80’s)

We sit with Charles and get right to the point. We can get Sprint PCS on Arie’s car tonight and with Arie being the favorite for the pole tomorrow – Sprint PCS will be seen all over the country for a fraction of what their existing ad plan can do – and we had already proven the demographic similarities through our local events. Charles seems interested but he leaves the motorhome within 3 minutes explaining he doesn’t want to miss the tour and that he will think about it.

I am feeling that we have a 50-50 shot at getting some sort of partnership. After 14 years (at that time) of trying to put these programs together, that was very optimistic for me. Milkman and I quickly figure out that if Charles were to say yes to some sort of program at 6 pm tonight, our decal vendor will most likely be long gone. So we take a big chance – Milkman and I get with Steve Turner, (our decal guru, purchasing manager, tire guy, mechanic, all round good guy) we call Square One Graphics and prepare them for a possible order for Sprint PCS decals. Now at this point, we don’t know what might happen, but we need to prepare for just about every conceivable level of partnership. We quickly put together a list of various sizes and colors. That list by the time we were done was over 200 decals. Square One doesn’t have artwork for this new logo so I suggest that they get a newspaper from last week and pull the logo from an ad and begin scanning it so that it will work on his computers. These vinyl graphics shops that are based in Indy, there are 3 or 4 of them, live and die by their ability to service this type of last minute request – it happens all the time. To further complicate our situation, Square One was working flat out on another team’s ‘last minute request’. We were told, in no uncertain terms, that if we needed these decals, we needed to confirm the order by 6pm and that Square One would have them ready by 4:00 am – yes 4:00 in the morning – Saturday morning. Cool….. plenty of time.

Back on the tour…. the clock is ticking. We decide that we have to pull Charles out again. I call one of the tour leaders on their cell phone and ask them to put Charles on the phone. They were actually on the race track, being driven at a very high rate of speed and Charles was not impressed with this second interruption. He reluctantly agreed to meet me back at the Treadway Racing motorhome and we sat down again. I got right to the point…. “Here’s what we can do…. but need an answer right now!, I can give you an associate level partnership which includes signage on ‘everything’ for $250,000.”

I whipped out the Kraco proposal again and showed him that what I was offering him was, relative to the Kraco proposal, a good offer. I also showed him the exposure that Arie had received from Pole Day qualifying in 1996.

Well…. Charles said yes – to a 1 race deal – the 1997 Indianapolis 500, starting with Pole Day (tomorrow) for $250,000…. But then he immediately said that he had to let his marketing people in Kansas City know about it…and get their blessing – he wanted them to be supportive of this – and rightly so. He also said that he wanted to figure out a way that he wouldn’t have to pay for it. I wasn’t sure exactly what that meant but explained that we had to get started. So, we separated again – Charles called head office and Milkman and I called Square One to give them the green light. We agreed to meet at the Speedway, at the entrance to Gasoline Alley (which will be locked) at 4:00am.

Charles rejoined the tour – and remember that execs from Nortel were on the tour? Well Nortel is a major vendor to Sprint – they sell them telephone switches – big ones – multi-million dollar ones. So Charles got Nortel involved ‘somehow’. We believe that there were co-op marketing dollars involved but we never did find out. It was good enough for Charles – so it was good enough for us. Scott Goodyear, who was Arie’s teammate was also supported by Nortel, although a different group – but a nice fit nonetheless.

We had done this deal on a handshake – we didn’t have any choice – and I thought that we were we done…. for now. We weren’t. Charles asked to meet us one more time and ‘suggested’ that because their market launches in Texas and Nevada happened at the same time as our races there – “I would like you to just leave the decals on for those 2 races as well”. This was not part of our deal – we could have asked for more money – but were pretty sure that would have been risky. But we needed something – so we asked that for Sprint PCS phones for everyone on the team – and – that Charles agree to a meeting in Kansas City to discuss a multi-year plan that includes vendors, retail distribution, corporate hospitality, use of marks, inclusion in Sprint PCS advertising, and anything else that we could include to help with the launch of their new brand. Charles agreed – we agreed – we all went back to work. I ran into Fred Treadway on pit lane around 6pm – told him what he had done, to which he replied “Cool”.

So, we met the decal guys at 4am (jumped the locked fences to get into the garage area – a big no-no)…. and by the time the gates opened at 6am, we had Sprint PCS logos on everything. Arie went on the capture the pole, and then went on to win the race. Charles had done very well – Sprint PCS received over $3.5 million worth of in-focus TV exposure for this event (source – Joyce Julius) – and we were thrilled with the future possibilities with this global brand.

By mid-September a multi-year multi-million dollar partnership was done that included Qualcomm and Radio Shack.

So… who did this deal? Well, as you can see it was a team effort. Lots of people can take credit for this one – and rightly so. The photos below – courtesy of the Indianapolis Motor Speedway – highlight the fruits of all of our labour. Enjoy!

An Open Letter to IZOD IndyCar CEO – Randy Bernard

Posted on by
1

** I originally published this blog story in August of 2010 – nothing has really changed. **

An open letter to Randy Bernard – IZOD IndyCar Series CEO

So you’ve been handed this box full of puzzle pieces and you been tasked with putting it back together. There might be a few people that hope that you fail, but they have a personal agenda, and I am not one of them. I hope that you make the cover of Time magazine – twice.

I am going to be the next – but not the last – in a long line of super-duper experts on the topic who will offer some insights into the challenge that you have accepted.

Let’s start with those experts. Already – and I am speaking metaphorically here – you have been in the presence of two seemingly sane, professional, accomplished, well-regarded stakeholders who are on the complete opposite sides of an issue or solution to a problem. So who do you listen to? Oh sure, you take in both sides of the issue and go with your gut. That has always worked. But frankly, you can’t afford to be wrong. Let me use a completely different scenario to illustrate my point. You have this tree in your front yard and it is oozing ‘stuff’. You call two tree experts to give you their diagnosis of the problem. Expert 1 says that the tree must be cut down and removed. Expert 2 says that he can treat the affected area and it will be fine. Who do you listen to? With all due respect, you are not qualified to know which one of them is right. You have the same problem in your role now. Who do you listen to? Ask five people in your paddock and you’ll get five answers. So, who do you listen to, and… what the heck is the question anyway? I think the questions are; What is your goal? And… What is the problem? These need to be answered before any solution can be applied. Getting everyone to agree on those answers is near impossible, but this is my letter to you – so these are my answers…

What is your goal?

I am going to assume – because I do not know – that your goal is to make the IndyCar Series a professional sports property that is supported by a “large audience”. And “supported” means in-person, and through media (TV, radio, www etc). So measurement, for the purposes of this exercise is “large audience” – period. It’s not the coolest cars, longest straightaways, highest speed, greatest dancer, biggest tires, sexiest driver…. It’s “large audience”.

I choose “large audience” for a couple of reasons. First, nothing that you are doing matters if nobody cares. It’s not about close finishes – USAC Midgets and go-karts have some of the best “racing” you’ll ever see. But nobody (except Robin Miller) cares. You need audience. And second, and this is key: Audience = Value. Over the past 15 years, I have had literally hundreds of racers, team managers and team owners say to me “I need a sponsor”… and my response for the past 15 years has always been the same. “No you don’t need sponsors… you need value. Find value and the sponsors will come….” Approximately – give or take – 100% of those people walked away shaking their head and mumbling that I didn’t know what the hell I was talking about.

What is the problem?

So, the goal is ‘large audience’. That’s what you need Randy. But, what is the problem? Let’s examine other success stories in properties that have ‘large audiences’. There are some very simple lessons learned from the Olympics, the NFL, the World Cup and American Idol. And it’s simple really, when you step back and look at the key ingredients. There’s only three, and here they are Randy:

1) The audience needs to be able to relate to the talent of the athletes.

2) There has to be something significant on the line. In other words, the ‘prize’ for winning has to be substantial.

3) You need to have the very best competing at your events.

That’s it. Don’t believe me? Just remove, reduce or diminish any one of the three and see what you have. When you have these three things in place, everything else follows. Everything. Audience, sponsors, TV, merchandise sales, the best team owners, the best athletes, the best crews, the best talent… everything.

Below are my “success triangle” illustrations to make my point. To oversimplify, “Success” is a triangle consisting of the three elements above. Your goal is to have a big triangle. The bigger the triangle, the more successful you are. Again, simple. And the triangle, as a shape is perfect because the size of your success triangle will be restricted to your weakest element. Have a look at these illustrations:

So, that’s the problem Randy. The IndyCar success triangle has some short, weak, flimsy sides.

Okay… still skeptical. Let me prove it. And we’ll do each ‘ingredient’ – one at a time.

1) The audience needs to be able to relate to the talent of the athletes.

I am going to give you examples of properties where this is missing, relatively speaking, and I’ll give you examples of properties where this exists.

Let’s start with the Big 4 mainstream sports properties in North America. The NFL, NBA, MLB and NHL. Remember, the audience needs to be able to relate to the talent of the athletes. Which of these sports has the ‘largest audience’? That would be the NFL. Which has the smallest? The NHL right? From the mind of the audience, which sport is easier to understand, and why? Here’s the NFL; two 350 pound guys, who can run really fast, smash into each other. It’s like the Flintstones meets NASCAR. The audience can see this and understand what is happening. A wide receiver completely stretched out to catch a pass with one hand is easy to appreciate – even if you have never seen football before in your life. This is really important. In the NHL, the audience is able to understand the athletes ‘better’ if they’ve played hockey themselves. If you take the same person and expose them to football and hockey, they will grasp football first. This is how you grow audience. By having the ability to relate to the talent of your athletes. And no matter what the NHL does to try to explain ‘offside’, they will always be limited by this. In your sport Randy, the challenge is that unless you’ve driven a race car, it is hard to “see” Will Power’s talent and relate to it. To the masses – the general public – Will looks the same as Danica going through any given corner. But there is clearly a difference in talent that is hard to appreciate. In fact, speaking of talent, what is Danica’s talent compared to Sebastien Bourdais? Both are clearly extremely talented, but they are talented at two completely different things. Which ‘talent’ will drive your growth? To have mass appeal, you need the best athletes, and the masses have to be able to relate to their talent. This is a big challenge, and that is putting it lightly. Cricket is an incredible, global, professional sport, but I don’t follow it. I can’t relate to the talent of the athletes. I just don’t get it.

2) There has to be something significant on the line. In other words, the ‘prize’ for winning has to be substantial.

Randy, this ingredient is key because the audience wants to know that there is something on the line. A monumental prize for the winner, and significant lost opportunity for the loser. The audience needs jubilation driven not just by financial gain, but by the prestige of winning, and they need heartache and disappointment. They need to see success and failure at the highest level. This is why your Indy 500 means more than the Iowa race – whatever it is called. And this is why the 6:00pm news is so popular. People think that “Reality TV” is relatively new. They are misguided. “Reality” programming such as the newspaper or TV news broadcasts have always been around. Reality TV was borne from the audiences’ desire to see winners and losers, pain, sorrow and occasionally – joy. When the audience’s appetite wasn’t fulfilled from 6:00pm-7:00pm, the networks created their own misery – Reality TV. Ted Turner, of course, recognized this many years ago and created CNN.

Back to my point Randy; The Stanley Cup, the Super Bowl, an Olympic Gold Medal, the World Series, The Indy 500, the Daytona 500, the Monaco Grand Prix, the Kentucky Derby, the Masters, the 24 Hours of Le Mans. These ‘prizes’ transcend these sports. Audiences that have no interest in the ‘sport’ come from far and wide to experience these events. Why? Because there is a significant prize on the line. If the prize for winning American Idol was a three-night gig at the Holiday Inn in Brownsburg, Indiana, who would watch? Take the same talent – talent that the audience can relate to – and change the prize. Simple. Motorcycle racing in the US is a great example of what happens when you take away the prize. It’s dead. The Daytona 200 used to mean something. They took away the prize and they excluded the best athletes…. and you can stick a fork in motorcycle road racing. But I digress.

3) You need to have the very best competing at your events.

Okay Randy, this one is real ball-buster. I say that because as long as there has been motorized competition, there have been “fast guys, rich guys and idiots” (thanks Sam Moses). But nonetheless, as I have stated above, and as history has proven, if you do not have the very best in your ‘competition’, you will fail – always. How many players in the NFL ‘bought’ their roster spot. Randy, I know you have heard this analogy many times before, but if Mark Cuban had bought the Dallas Mavericks and inserted himself into the line-up, the audience would disappear. Not at first, because remember, we love failure, pain and misery, and we need to be able to relate to the athletes. But in this case, it is not sustainable. You want more proof? Look at the Grand Am Rolex Series. What a can of worms they are in. Without their ‘gentlemen racers’, they would not exist. You should thank your lucky stars that you have not been charged with growing their audience. Ride-buyers and other ‘drivers’ who have no business being on the track, while the real talent sits on the sidelines, won’t work. Here is the other problem with this, and this is also very critical. As soon as a driver, or a team owner, reaches into their pocket to participate in your series – you work for them. Period. Do you want to work for Chip? Or do you want to work for your audience? Which ‘boss’ offers long-term stability? When your property has not provided enough ‘audience’ to build a profitable value proposition, you’re in trouble. I don’t care that “it’s always been like this”. What I care about is that it won’t work. So, if your going to head down the path of allowing ride-buyers, you need to change your positioning. You’re not a professional sport. You’re a platform that allows talent-less people to “live their dream”. You’ll need some branding/marketing agency to help with the positioning on that. Maybe Gene Simmons of KISS. Does your audience understand why Milka is racing and Bourdais is not?

So there you have it. I am fully aware that I have not offered any real solutions here. But, until somebody points out what the problem really is, anything you do is either short-term or irrelevant. If a new car is the answer, then you need a new car – all the time. If splitting one race into two is the answer…. cool, but that is change for change’s sake, and you need your next 10 changes lined up and ready to go.

So, my letter to you Randy is to tell you what the problem is.

There are great lessons to be learned all around us. Like American Idol. I love American Idol because of the beauty and simplicity of the show as a marketing communications platform. What is the difference between Carrie Underwood before and after appearing on American Idol? It’s not talent – she had that. Sure they massaged it, but she had talent. She’s one of the world’s best. The only difference between Carrie before and after is…. audience. That’s the only difference. But this isn’t just any ordinary audience. American Idol’s audience is 30 million strong – the world’s largest focus group. Every week they tune in and answer the question that American Idol is really asking. That question is, of course, “Which one of these 80,000 contestants’ album who you buy?” Again…. so simple. Every week, the focus group answers that question and when the record comes out, they already have…. audience. The producers of American Idol aren’t in the TV business – they’re in the music business. And Ford and AT&T fund their search for new talent. Think about that and explain how a new car can do this for you. And think about your focus group Randy. Who are they? Where are they? What do they want?

So that’s it. You need the best athletes in the world. They need to be relatable and you need to have the big prize. Do this and history has proven that you’ll have audience. And audience Randy… equals value.

Move fast Randy… be careful who you listen to… and good luck. I am pulling for you. I really am.