Targeting the Market, Finding the Champions, Part I

Tom Schuler, foreground, second from right, at a reunion with his 7-Eleven teammates

Tom Schuler on Team Sponsorship

Tom Schuler has been part of two of the most successful cycling teams of the modern era. He raced for the 7-Eleven team from its inception to its end (1981-1990); started as an amateur and turned pro with the team in 1985, racing the ’85 Giro d’Italia and winning the ’81 National criterium championship and ’87 USPRO road championship along the way. After retiring from competition, he first went to work as an assistant director at the Motorola team before going out on his own. He managed the Saturn Professional Cycling Team with his company Team Sports, from 1994-2003. 7-Eleven was arguably the first outside corporate sponsor to embrace American cycling in what we think of as the modern era. The Saturn team showed both a depth, with a dominating domestic men’s team and dominating international women’s team, and an integrated marketing approach that hadn’t been seen in cycling before or since. If you went to a race where a Saturn member was racing, chances are, representatives from a local Saturn dealership were also present.

Team Sports has also managed several other cycling teams including: Advantage Benefits/Bissell, Colavita, Quarq, TargetTraining, Team Type 1, Volvo/Cannondale. The company began by managing an inline skating team. They currently are managing the Timex Multi-Sport team, now in it’s 12^th season, the Zoot Ultra Team, now in it’s sixth season. Team Sports also promotes events, including road racing, mountain biking, cross-country skiing, Xterras, and is the promoter behind the 2012 National Cyclocross Championships in Madison, Wisconsin.

Thanks to his experience, he’s in a great position to discuss the hows and whys of team sponsorship, which is why we sat down with him to better understand his experience and ask him about the current state of sponsorship in bike racing.

 

JP: Why, in your opinion, do pro cycling teams exist?

TS: Why does bicycle racing exist? The bicycle is a wonderful vehicle and people will always go faster and race each other. There’s both an individual winner, but the team supports that individual. It’s also drafting and help. Teams lend themselves well to sponsorship. The team isn’t called Alberto Contador, but Saxo Bank. You can brand a group of athletes a team and give them a name.

JP: Do sponsors lead with business or love?

TS: We’re going to talk about patrons of the sport, and sponsors. There are always patrons of the sport, people get emotional and they support that. Major league sports have patrons, like George Steinbrenner, but the people would do it regardless of business metrics. Certainly Fred Mengoni comes to mind in the US. I don’t know the patrons in Europe that well. There are patrons that have a brand and promote that brand by using something they’re passionate about. We have corporate teams like Saturn that need to show and justify their return on investment.

 

SATURN

JP: Did you initiate the sponsorship program with Saturn?

TS: The start of Saturn started at their agency, Hal Riney Partners, in 1990. They later got absorbed by bigger and bigger agencies. He (Riney) was the voice behind Bartles and Jaymes, among other things. But he was primarily a creative guy. He was Saturn’s initial agency in 1989. They needed an activity that was doable for a new company. They looked at a lot of activities and landed on cycling. It was both youth and family, both male and female, it was affordable, and from their estimation, there wasn’t any auto company that staked a claim on cycling. Being from San Francisco, they hooked up with Warren Gibson. He ran it the first two years. He reported to Hal Riney and Saturn and switched it back to their agency in Detroit, Carlson Marketing Group. They’re a huge group based in Minneapolis, but has a Detroit division.

So, Warren ran into some problems with budgets and the typical thing there. So they looked for a different person to run it. And that’s how I ended up with it.

Simultaneously, were talking to Volvo about the new sport of mountain biking.  Two car companies launching. It was a busy time for us. (For the Saturn team) We reported to Saturn and the Carlson Group.

 

JP: How did you come up with what the team did?

TS: They wanted the team to reflect their customers, their target audience. So, both who they are and who they want to be. Their metrics showed that cycling related to their customer base. It was split pretty evenly between male and female. That’s rare with a car company at that time. They figured cycling was practiced by women and men.

 

JP: So is this was why you had a strong women’s team?

TS: There was a men’s team for the first two years. They said there was no reason we shouldn’t have a women’s team. We got a women’s team going last minute with three athletes. Jeanne Golay, Julie Young, and Jessica Grieco. Eventually we became the world’s number one women’s team.

It was a great value to have the women’s team; it cost very little.

We always presented the men’s and women’s team as equals, as one team. They don’t get any less budget, any less treatment. We presented them as we presented the men’s team.

Saturn presented themselves about the customer experience. So they wanted to be different. So they wanted one price, they were retailers not dealers. The atmosphere should be welcoming and more comfortable for women.

JP: How did you go about doing metrics?

TS: They used at least a couple of measurements. IEG, International Events Group, were commissioned to look at it. They’re engaged by clients to measure the results of sponsorship. About halfway through, they looked to determine ROI. They were investing in events as well as the team. The team was their main property in cycling. They determined that their best ROI was the team and they decided in the last few years to do it even better.

(Eventually) They wanted to hire an expert in cycling to work at Carlson as a contractor, so they hired Michael Aisner (promoter of the Coors Classic—JP). So they hired him to come up with all sorts of activation strategies, making targeted PR, placed many stories in national publications. So we were racing the same, but we were activating at a much higher level for those last few years.

JP: Did he increase ROI?

TS: Absolutely. It showed robust returns. Me coming up with the metrics myself isn’t fair.

JP: Can you share the numbers?

TS: I don’t know, but it was a multiple of their investment, and it was good to keep us going for many years. When it came time to renew, it had to make sense.

 

JP: Why did they pull the plug, was it not working anymore?

TS: One of the basic tenets of sponsorship, you’ve addressed the audience for a long time, they know you, so you move on to another group. So they moved on to marathoning.

 

JP: So success can cost you?

TS: The decision makers were told “everyone in cycling knows you” so address another group, like runners, and make sure they know Saturn.

 

JP: Was the Volvo sponsorship run with the same kind of vision and support?

TS: Probably not as sophisticated for marketing and activitation. They liked the involvement with Cannondale, they liked the image it produced. It was a high-end car with a high end bike. Activation-wise, they used a number of agencies, but not the same. Metrics-wise was both North American and then Europe. After the team took off in the US, the Europe side decided that it was a way to reach younger customers. And Europe was initially cold on it. They eventually took it over.

 

JP: How did these programs compare to the Saturn program in terms of what the sponsor wanted and what you gave them? 

TS: I think by far Saturn was the most sophisticated in terms of spending on activitation and success at determining return on investment. The Colavita men’s team is now Jamis-Sutter Home, and the women’s team will get sponsorship money but not management from Colavita. TargetTraining, Rick (Spear) was a good patron of the sport. Team Type 1 always had to work for a sponsor and provide ROI. Phil Southerland is not a patron, but a manager, his sponsorship has to have a marketing return. Advantage Benefits/Endeavor/Bissell. Mark Bissell has been a patron, but does work it into their marketing mix. The Quarq team was supposed to be a marking platform for Quarq shoes. The job of the team of promoting sales should always be there, but sometimes the measuring stick is not always used the same way to connect to end sales. Connecting to sales is something sponsors all try to do at various levels.

Image: Alex Steida, Photosport International

John Wilcockson Joins RKP [UPDATED]

I began RKP for two reasons. The first was because I was tired of people telling me I was doing a good job but the guys in sales hadn’t hit their numbers and someone needed to go home. And it sure as hell wasn’t going to be the sales guys because that would be stupid. The second was to create a place where I could follow the pieces my heart told me to write. Why was that so hard? I still don’t know. One of the first pieces of advice I was ever given by a master poet was to follow my heart. That if I thought something was interesting, I was absolutely on the right track.

I’ve worked for a lot of different editors and only one—Brad Roe—trusts my gut without exception, so until peloton came along, I’d had a lot of ideas never find a home. What Brad did for me I’d like to do for some other folks.

Wait, let’s back up a sec. I thought this would be just part of my income stream. That it would be a modest little thing, but that I could make a home for a few writers where they could do good work guided by their guts.

As it turns out, things have gotten (note my use of the passive) decidedly less modest as of today. I’ve hired John Wilcockson.

You read that right, but go ahead and reread that last sentence. I’ve had to, myself.

John has covered an incredible 43 Tours de France. His career spans from Jan Janssens’s nail-biter of a finish to the present, with no interruption. Think about that. Merckx? He was there. Same for Hinault and Indurain. And Armstrong. How many other people know exactly what they are doing in July as clearly as John does? (Well, for the record, photographer John Pierce does, but he’s an exception.) His experience among English-language journalists is unparalleled and that’s a word that is frequently overused. In this instance, it’s not.

I can even credit John with being part of the inspiration for my desire to write about cycling.

Okay, so a bit of clarification: John has elected to work for both peloton and RKP. He’ll be splitting his time between the two entities. The story here is that two small (okay, one small, one tiny) companies coordinated efforts to give one of the gems of the cycling world a reasonable income. Neither one of us could have done this on our own.

People say opportunity knocks. I’m here to say that if it does, the tapping is very light. Stuff rarely lands in my lap. All the great things that have happened in my life—my wife, my work, my son, whatever passes for fitness these days—I’ve had to chase down. I’ve been working behind the scenes for weeks to make this happen.

That promise to make RKP a home to great writing has played out in a surprising way. I didn’t expect anything like this would ever happen. But a promise can hide ambition within it, so I’ve found. I’m excited to bring you a great voice. Watch for John’s posts on Tuesdays.

[UPDATE] I thought it might be nice to check in with John to get a statement from his perspective. He had this to say:

“I first heard about RKP from Boulder videographer Brian Patrick, who said it was the coolest cycling site he’d seen. So I checked it out and thought, anything that has ‘red kite’ and ‘prayer’ in its name has to be aimed at true European bike-racing aficionados, perhaps with a spiritual bent. Nice!

“So here I am, ready and excited to clip in to the pedals and begin this new challenge. My first RKP column will appear next Tuesday. Thanks, Patrick, for the chance to reach some new readers!”

2012 Prognostications

 

Let’s get the new year off on the right foot. I think fortune telling to be worth only slightly less than the word of someone working on Wall Street. And predicting the future contains all the science found in an episode of Entertainment Tonight.

So I’m going to jump in with a few predictions for this year. They may constitute wishful thinking more than actual predictions, but going into this new year, I’ve spent some time thinking about what the new season will bring.

Change will be the watchword for the year. I suspect the various changes in behavior we will see on the part of various riders, teams and companies will require lots of re-thinking. In some cases that thinking will go as deep as identity, but it could require rethinking less who you are than how you do business.

Change in Strategy: If Fabian Cancellara’s attacks at Milan-San Remo, Ronde van Vlaanderen, and Paris-Roubaix were bold, expect him to be more guarded this year. Don’t be surprised if he waits until later in the race to make his move. That said, for such a strategy to work, his accelerations will have to be more ferocious. A late-race attack needs afterburners to succeed because more of the favorites are willing to burn matches to ensure their own chances. Of course, because Cancellara has one of the biggest engines in the peloton, don’t be surprised if he goes even earlier in a bid to catch competitors off guard.

Change in Goals: Of the many teams that will be invited to compete at the 2012 Tour de France, Thor Hushovd signed with the one guaranteed to prevent him from attempting to notch another stage victory at le Grand Boucle. It could be argued that Saxo Bank would similarly clip the Norwegian’s wings, but with Alberto Contador’s 2012 season a matter of much speculation and at least some doubt, it could be that he could have signed with Bjarne Riis only to arrive with plenty incentive (and direction) to get some result, any result. Hushovd will have a free hand at Roubaix, but can that really be his only goal for the season? And if he doesn’t find success there (how often does a rider achieve his sole goal for a season?), what will become his plan B? Complicating matters for him is the fact that he will share the non-Tour spotlight with Philippe Gilbert, a guy who wins more often. There’s not a team with more promise or more volatility currently licensed. Years from now we could look back on this team as the one that put La Vie Claire and Astana to shame.

Change in Mission: Omega Pharma-QuickStep is a team that will be forced to reinvent itself. Having signed Levi Leipheimer and Tony Martin, the team management will need to figure out how to support a rider at—at the very least—shorter stage races, if not a grand tour. Given the lousy year Tom Boonen had (and only a rider of his stature can win Gent-Wevelgem and still have a lousy year), it would seem unwise to hang the whole of the team’s hopes on him for their big results. To do so would mean wasting the investment on Leipheimer and Martin.

Change in Business: Electronic shifting is going to change the evolution of component groups. The move from 10 to 11 gears and from 11 to 12 will no longer require new control levers. Instead just a software update will be necessary. Riders using Di2 will be able to purchase a Dura-Ace 11-speed cassette and instantly have 11-speed Di2. Neat trick. The upshot here is that one of the traditional drivers/limiters to a new group is a redesigned control lever. If adding another cog is as easy as software code, then you have to ask just what will drive the introduction of a whole new group. The question isn’t as easy as it seems. Is weight enough of a driver? Almost certainly not. How much performance increase is enough? That’s almost impossible to quantify, but there’s a tipping point, most will agree. With this technical hurdle out of the way, we may see Shimano and Campagnolo doing more to update their groups each year and in that there’s the risk of turning off the bike-buying public. Caveat venditor.

Change in Scope: Well, Bicycle Retailer let part of the cat out of the bag, but it wasn’t all of the cat by any means. You’ll see a post regarding the other half of that story soon. A change in scope is what’s happening at RKP. I began this blog as a way to publish work that wasn’t finding a home at mainstream media outlets. Belgium Knee Warmers proved there was an audience for it and RKP gave me a way to follow my heart on subject matter and make some money, so that I could continue to do that work. My one promise to myself was that RKP would be a home to good writing. That promise has taken on a slightly more epic cast (and while the word “epic” gets overused, in my personal circumstance I get to use it this time).

 

Toy Story

 

The story arc runs something like this. Brightly colored paper gives way. Eyes bulge. Cardboard box shunted into dad’s lap to disassemble the taped, zip-tied and/or shrink wrapped parts. Through grunts of effort, mumbled swearing, the installation of batteries and a final, defeated consultation with the instructions the toy becomes functional.

The children play with it for twenty, possibly twenty-five minutes. It gets abandoned on the floor in the middle of the living room to be tripped over and then kicked into a corner. Time passes. It gets picked up, played with and redeposited in the middle of the floor five to ten more times.

It is at this point that the kids look beyond the ostensible primary purpose of the toy and begin to wonder how this once bright, shiny, new toy actually works. They begin, slowly at first, and then with increasing urgency to pull it apart.

Now it stops working. The batteries are dead anyway. Sometimes the batteries are removed and hurled behind the couch. This turns out to be a pretty eco-friendly way to keep them out of the landfill.

Now what’s left in the middle of the floor are the pieces and parts of the non-functioning toy. Mom and dad spend two or three cycles reuniting parts with original toy before giving up and simply throwing away whatever gets caught under foot.

What begins at Christmas in an orgy of paper-ripping joy winds down by March or April. The house becomes a veritable mausoleum of the used, abused and discarded.

I wonder why we do it.

But then I look at the bikes hanging in the garage and the parts in the bin and tools in their chest. Every time I go for the pedal wrench, the good one, I push aside two crappy, old ones that are rounded out and useless. Deep in the parts bin there are single pedals. Where did the other pedal go, I wonder? I almost never put my pedals in the wash. And anyway, I’ve checked the dryer vent.

I have a lovely set of dead Ultegra shifters. I keep them in a bag with a note that says, “These don’t work.”

I have an inert front derailleur from my old mountain bike. Someday I’ll look at the spring and work out what’s wrong with it. No I won’t.

I have a small collection of toothbrushes that have been used to clean cassettes and chains. I have a chain cleaner as well. It doesn’t work anymore. Too caked with grime. Don’t touch it. It’s gross.

The last two bikes I’ve rid myself of, I just gave them away. They were done. No longer functioning. Collecting dust in a corner. To solicit money for them seemed silly, verging on mean. Someone with far more love in their hearts than I’ve got will clean them, reattach their missing parts and ride them again. Maybe.

Ultimately, it’s just the toy story all grown up. Instead of batteries, lube.

 

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