Targeting the Market, Finding the Champions, Part I
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 12th 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.
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