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 The Business Of Racing - Sponsorship

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PostSubject: The Business Of Racing - Sponsorship   Sat 02 Jul 2016, 2:18 pm

Education
Or lack thereof, could be the reason that finding sponsorship has long been perceived as one of the most difficult things a racer can accomplish, as well as the reason that so many racers might not achieve their racing goals. How many times have you heard or said, "We will move up if we can find sponsorship"? If we can agree that the definition of insanity is a state of mind that causes someone to do the same thing over and over while expecting a different result, then we can also agree that approaching racing sponsorship from a different perspective may be required to advance your racing career, while relieving some stress on your personal finances.

Sponsorship is the most underutilized, misunderstood, and abused tool in the corporate marketing war wagon. As a racer seeking sponsorship, you have learned that many companies have had less than favorable experiences with sponsorship. The one variable seldom considered in all of the sponsorship books, articles, and workshops, and something that you just can't learn in a classroom is that many local, regional, and yes, national companies do not know how to maximize the value of sponsorship. Even worse, they don't know how to use it properly as a tool to drive business. A common mistake is to confuse sponsorship with advertising. While you are competing with advertising, direct mail, and other marketing programs to get your share of the corporate budget, you are not offering the same capabilities. Well-designed sponsorship programs offer the ability to distribute coupons, generate sales leads, enroll new customers, conduct corporate entertainment, test market/introduce new products, directly increase sales through rights agreements, and more through a single avenue. Those things are referred to in marketing speak as activation, or "promoting the promotion." The rule of thumb is that for every dollar spent on sponsorship, a company must spend an additional dollar on activation. Keep this in mind when the time comes to talk dollars and cents. Sponsors that cheapen or don't budget for activation will certainly be disappointed at the end of the year, and you will lose a sponsor.

On a much more touchy -feely note, sponsorship has the ability to create an emotional connection with fans, or in your sponsors' words, potential customers. It is a fact that NASCAR leads the way in fan loyalty, which in part is an emotional reaction that fans have because of their passion for the sport. But that concept goes beyond just NASCAR. Regardless of the sanction, this fan loyalty can quickly turn into brand loyalty. It's your job to educate your sponsorship prospects of this fact as well as the many opportunities that exist by partnering with your race team.

Have you ever called a prospective sponsor and heard, "We're not interested. Sponsorship doesn't work," or "We've sponsored things before and think it's a waste of money"? If so, chances are they agreed to sponsor something, be it racing or the ballet, and didn't understand how to use this valuable tool. However, companies that sponsor usually stay in it. According to IEG, the leader in sponsorship intelligence, 82 percent of sponsors plan to maintain or increase their sponsorship budgets in the coming year. Timing is key to getting a piece of that action, as 43 percent of companies determine their sponsorship budgets between October and December, while an additional 23 percent determine budgets between January and March.

As the sponsorship numbers continue to grow at the national level, where companies are being sold sponsorship programs by well-educated marketing professionals, it is our job locally and regionally to be in a mode of education in terms of how we are selling sponsorship. Many local business owners and regional executives have never sponsored anything because they don't understand how to make it work for them.
Racing Sponsorships

Research
Identify companies that are currently in the mode of advertising. Check out the newspaper, TV commercials, SPEED Channel, other racing broadcasts, and of course, companies that are local track sponsors. Spend quality time with your research in order to save tons of time and money commonly wasted by calling companies that have neither the budget nor a good alignment with racing.

The First Call
After you have done your research, you should be able to identify no less than two good reasons that a company would want to work with you and sponsor your race team. Find a way, based on the capabilities of sponsorship outlined above, to help companies achieve their business goals/objectives. Do they manufacture a food product that can be sold in the track concession stand? Are they seeking to entertain their customers? Do they want to generate excitement at their retail location with a show car visit? Whatever you do, don't ask, "Wanna sponsor a race car?" Rather, ask, "Are you interested in sampling 1,500 people per week for 20 weeks?" or "Are you interested in distributing 10,000 coupons over six months in X, Y, and Z markets?" Sell them on the benefits or deliverable s of sponsorship-not the word sponsorship (which may be a dirty word if they don't understand it).

The Proposal
Your proposal should focus 10 percent on you, 10 percent on racing, and 80 percent on how they can earn a positive return on their investment through sponsorship. If possible, get away from mailing your proposal. Most computers are sold with Microsoft PowerPoint, which is a very versatile presentation program that you can use to create your proposals. If you don't use the computer or aren't sure how to use PowerPoint, ask a crew or family member to be your race team's marketing director. Make that person responsible for creating proposals and following up with prospects. The greatest advantage of PowerPoint is that it can be e-mailed, which saves you money in printing and postage.

Work with your Track or Series Working with your track or series is perhaps the best way to give yourself an advantage in selling sponsorship. They can provide you with billboard space, tickets, track program ads, and most of all, the ability to sell products in the track concession or souvenir shop. As you work out a partnership with your track, you should ask for discounted pricing, as it's in their best interest to have well-funded teams racing at their track. You also become a sales agent for them, so it's a win-win situation no matter how you look at it.

Finding sponsorship for grass-roots racers may be getting more difficult. The economy has slowed, but the cost of auto racing isnít declining. So for a lot of racers, this may mean getting out of the sport, or finding some serious sponsorship to finance their racing efforts.

Many grass-roots racers have no idea what they should be doing to attract sponsorship, and many aren't willing to learn, or invest, in hiring someone to assist their efforts.

Here are 20 key points that a grass-roots racer should keep in mind when going after sponsorship. In fact, these basics of sponsorship can be used by just about anyone seeking a marketing partner. They are listed in no order of priority, every one of these points can be useful in your sponsorship efforts.

1. Don't sell too cheap.

If you don't feel that what you offer is worth much, businesses will agree. Set a figure a realistic figure based on value offered, and make it higher than what you need (that leaves room for negotiations). You can always come down with your fee, but it is almost impossible to increase the amount.

2. Request a realistic amount of money.

Too many sponsorship seekers think a serious primary sponsor should finance the race team. A sponsor is a successful businessman and is only going to give you what he thinks the deal is worth to him. If you can show that the package you offer will affect the bottom line, generate exposure, and bring customers in, the chances of getting that businessman to sign on as a sponsor are much improved.

3. Run the race team like a business.

Don't leave all your business sense behind when you go through the pit gate at a speedway. Run the team like a real business, and you will impress potential sponsors.

4. Don't beg.

Never tell a potential sponsor that if you don't get a sponsor, you won't be able to race. They don't care. At least those offering serious sponsorship don't care.

5. Talk racing as it pertains to increasing the sponsors business.

Most sponsors don't care about your auto racing. They do care about their business, and what you can do to help their business. Show that you have a way to attract customers, and they will listen. Telling them about all the wonderful things you have done in racing and plan to do, will do nothing for the business, and they will have no interest.

6. Add value to the package.

Many sponsorship packages are done backward. Ninety percent is devoted to the race team, and 10 percent is devoted to the marketing efforts to make the sponsorship work. It should be just the opposite. The days of offering to paint the sponsors name on the race car and calling it "sponsorship" are long gone. You have to offer a package that includes, perhaps, signage at the track where you race on a regular basis, include a night at the track for the sponsor, and include program advertising and billboard advertising. Public address announcements can also be included. The racer should be spending part of the money received from the sponsor to keep the sponsor happy. You need to have a marketing fund in place to make sure the sponsor gets the exposure they paid for. Twenty percent is a good figure to work with.

7. Use the hauler as a rolling billboard.

More people will see the logos and names on the hauler as it travels to and from the races than will see the race car at the track. Sell the benefits of the hauler exposure, and charge for it.

8. Generate exposure for the sponsor.

Create and distribute a media release when the sponsorship is secured. Keep the media informed with news releases and newsletters. Create stories on the team, including sponsorship names, for program books and organization newsletters. Make sure the announcer at events where you compete has an information sheet on the team including sponsor names. Keep in mind that the exposure generated in program books, newsletters, and in the media is basically free. This requires just a little work by you or someone who has some writing talent.

9. Know the difference.

There are two types of sponsors those who, more or less, just give you money (supporters/fans) and expect nothing in return, and those who are the serious sponsors who actually expect a return on their investment.

10. Don't promise what you cannot produce.

Don't promise to win races and championships. Don't promise to get the sponsor exposure in all area newspapers, trade publications, and other media. Instead, tell the potential sponsor that you will be giving it all your very best effort.

11. If you can't talk business, or you can't write an effective letter, or you can't develop a proposal, or don't understand selling, you must hire someone to do it for you.

Don't expect anyone worthwhile to do it on a commission basis. Either hire someone to help you, or buy some marketing materials that will help you do it yourself. Be certain that the finished proposal or cover letter includes good grammar, correct spelling, and the proper names and titles of those who are being contacted. And don't forget, there is nothing worse than a greasy thumb print on the letter or proposal.

12. Research the potential sponsor.

Be sure that the sponsor can benefit from the program you offer. Be sure they can afford what you are asking. Custom-tailor programs that incorporate current marketing objectives, and try to expand on the need for on-site hospitality cross-promotions between your sponsors.

13. Don't conduct business on the telephone with the TV playing in the background or kids talking.

Have a dedicated phone line installed (it is not that expensive). Only those who are involved in the sponsorship marketing program answer the phone. If you cannot have someone there all the time, install voice mail. It will all pay off. If a potential sponsor calls and ends up talking with your children, chances are good that your program will not be taken seriously.

14. Mass mailings don't work.

There is a very well organized program that includes contact letters, postcards, proposals, telephone calls, and more that does work. Mass mailings to people you have not talked to in advance will probably end up in the wastebasket. Many times, well meaning secretaries will save their boss the trouble of reading a proposal?one that was not expected by tossing it in the trash.

15. Develop a relationship with the track promoter.

Let him or her know that you are available to do personal appearances, car shows, etc. It gives you the opportunity to meet more sponsorship prospects, and at the same time you are doing the promoter a favor. That can put you in a position to get better rates for your sponsors when they want to try some marketing opportunities at the track.

16. Get involved in local charities and local civic organizations.

A lot of business people belong to these organizations and this is a great way to meet them. Cultivate relationships.

17. Grass-roots racers should not be seeking sponsorship from corporate America.

You may stumble on something and get lucky once in awhile, but you'd do better to spend your time working on the local and regional companies that will have more interest, and derive more benefits, from the exposure you generate for them. There is always the opportunity to bring in several sponsors rather than just one primary sponsor.

18. Bring them out to the races.

Give your prospective sponsors the "royal tour" at the speedway. It may not seem like anything special to you, but to people who have not been there before, showing them all the behind-the-scenes activities can sell the deal for you. Give the tour, a bag of goodies to take home, and have someone go with them to explain what is going on. This is where the promoter, whom you helped by doing personal appearances, can kick in with some tickets and pit passes to make sure the potential sponsor gets VIP treatment.

19. Put it all in writing.

To avoid problems in the future even with the small deals make sure that everyone involved understands what they should expect. Put it in writing and have the principals sign. There will be no doubt as to who does what, when.

20. Once you have made a commitment, the sponsor s needs come first.

We've all heard too many stories about teams, even champions, who couldn?t be bothered to show up for an autograph session or a radio interview. Then they are surprised when the sponsor doesn?t want to continue to support them. When you have that sponsor, make sure that you act your best at the races and everywhere you go representing your team and sponsor. You never know who may be watching. Dress and speak properly when representing your team and the sponsors, and make sure the sponsor is kept informed of what the team is doing all season. Be in touch personally from time-to-time, by telephone, newsletter, and more.


Courtesy of Stock Car Racing News
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LowFatBug
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PostSubject: Re: The Business Of Racing - Sponsorship   Sat 02 Jul 2016, 10:16 pm

Yeah, gonna read through this more. Skimmed through it when you first posted it.
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