Targeting the Market, Finding the Champions, Part II

Tom Danielson became a feared rider while contracted to Saturn.

 

JP: When you look at the domestic peloton these days, what do you think about the health of the sponsorship scene?

TS: Overall, cycling is healthy. Not racing, but cycling. The numbers are there for commuters, riders, racers. It’s an aging demographic, but it works for lots of people. Most cyclists have no interest in racing. You don’t need to be in racing to be a supporter of cycling.

An advertiser can use a bike in their marketing without sponsoring racing. Racing leads to another layer of cycling which leads to people riding bikes. Making bike racing a little more user friendly or making people more aware of it and why it’s an interesting activity.

So cycling itself is very healthy. Especially in our cities where it’s used more and more as a tool. Bike racing, the sponsorship, ebbs and flows, like car racing. Is racing necessary? It goes back to human nature.

I think a lot of the sponsorships … It’s expensive to sponsor a national (level) bike team. When you look at the money and measuring the return on investment, that’s the issue. If they could get return of investment at half the cost, it would be a much easier decision. It’s hard to get an American team to get to the level of Tour of California. It’s not an inexpensive activity to be involved in. Cost is a factor.

GoDaddy chooses the Super Bowl, which costs $3 million every 30 seconds. Why that and why not cycling? Car companies want to advertise how tough their trucks are, and the Super Bowl might be an easy decision.

The brand wants to get involved in an activity their customers are involved in. When it’s the non-endemics, why do they need to be in cycling? You have to make that link. Just putting your name on the team and hoping it works is not a good use of your marketing dollars

 Chris Horner enjoyed some of his most successful seasons as a Saturn rider.

JP: What about with the international peloton?

TS: In the European peloton, you see a lot more, you can kind of segment, you can see the sponsorship and see the segments or strategy a little clearer. There have only been a few true global brands that do cycling. Is Rabobank a Global Brand? I don’t think so, but they’re primarily a Dutch initiative. Their metrics, and they’re an example where they’re deep in Holland and deep across all cycling activities in Holland. It’s an example of a marketing plan where you see a return on investment.

Liquigas-Cannondale might be a business-to-business deal. I think Lampre, what is Lampre? The French brands have been national brands. There’s been Toshiba, an international brand. Motorola had potential, it was paid out of a variety budgets, but was a national brand. T-Mobile was an international brand. It had a German-American axis, but it was a national brand.

The day when more teams market globally, it will help the stability of the sport. In terms of the teams that have been around for a long time, they still don’t have a reason to go everywhere. I don’t think Liquigas sells in Holland. You have categories of true internationals, nationals, and business-to-business. There are teams based on a business relationship model. Not too many of those coming to mind at the moment. A business-to-business team is one that doesn’t influence consumers so much, but trying to get your dealer base or certain dealers.

 

JP: How about the now-departed Navigators Cycling Team (which was a pro team from 1995-2007)? Weren’t they a patron?

TS: When Navigators activated, it was business-to-business model. But to their credit, they were always trying to bring customers to entertain, even internationally.

 

JP: If ROI is important and Highroad had such an impressive ROI, why do you think they couldn’t land a sponsor? 

TS: No matter how good your numbers are, and I believe Bob had numbers to back up their sponsorships, the people believing those numbers need to be inside those companies. The team, to be successful, they have to be people in the company, pounding their chests just as hard as the Bob Stapletons and Tom Schulers about how great sponsorship is. If you had that, the sponsorship lasts. You had it at T-Mobile and Saturn.

You can get all kinds of metrics and I wouldn’t doubt that Bob’s ROI were significant, certainly enough to justify continuing or finding a new sponsor. But the people in the company have to be touting those numbers.

He turned around a ship that was taking on a lot of water. He ran a good program, and seemed to, through Cavendish and victories, I would have put him at the top of the heap for providing a return. He’s probably had six different sponsors in there. But again, if it’s just three years, it probably didn’t work as well as they could have for the company.

 Saturn was a team with unusual depth and organization.

 

JP: Do you need to find the “champions” of cycling to sponsor a professional cycling team?

TS: You need to have people inside (the company) to believe in it. It can’t be just one person. It has to be a recognition inside the company of ‘this thing works for us.’ You can’t tap someone on the head and say ‘now you’re a believer.’

We had brand managers at Saturn come and go all the time. A new person may come in and want to look at different metrics. They’re skeptical, but they look in the field and look around. I can understand how someone who inherited a cycling team comes in not being a believer. Cycling teams are multi-dimensional in terms of what they can offer a company.

 

JP: When people discuss what seems to be worse and worse news for top-level teams, two concerns are repeated, one is the state of the global economy, the second is drugs in the sport. Do you think these things are scaring away sponsors or limiting what is happening? 

TS: The global economy in general, the general trepidation of people to spend money and make those decisions. As tenuous as cycling sponsorship is, we’ve had the same go/no go decision rate in both good times and bad. You can say banks aren’t loaning money now, but I can’t say people aren’t considering cycling now. UHC (UnitedHealthCare) is a good contra indicator.

And drugs, I think we’re kind of, I think Stapleton alluded to it. It could be a country-by-country basis; it might not be as significant. In Germany, it could. Over there, at least, there are some pretty strong metrics in place to measure. But when you lose television coverage of your biggest event. So Bob’s comments are directed at the German market as much as anything. Has doping impacted the sponsorship we’ve gotten in America? I don’t think so. Vaughters program is working on moving out of that era, as was Stapleton’s. Wherever there’s a disaster, there’s an opportunity, too. Net-net, I’m not sure. I have to believe what Bob says when he says it has been an impact.

The public doesn’t seem to like The Cobra (Riccardo Ricco). But David Millar, guys like him are still heroes. I think at the end of the day, everyone feels that if it was my kid and that was the circumstances, I could understand it.

As cyclists, we might be bigger conspiracy theorists, and more skeptical. I agree that corporate America doesn’t care as much.

 

JP: What do you think teams should be doing to improve their chances to land a good sponsor?

TS: I think it’s incumbent on all the team managers to make that sponsorship as valuable to sponsors, and that’s how they can help ensure longevity. Pure impressions is one thing. If it leads to more traffic to the store, more purchases, and it’s incumbent on the managers to make things work and that will go a way to increasing the longevity of the sponsorship.

 

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