Dano’s View From the Pits – So you think you Deserve it?

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Hi everyone, this time around I’m going to give you my view on sponsors and what it takes to get them and then keep them, but first there is this little thing called responsibility.

I think its comical that people look at the big league teams like John Force Racing & Don Schumacher Racing and actually think that they got where they are just because they are who they are. WRONG!!! They busted their buns every week. They now have their own PR & Marketing people working full time but they did not get where they are at overnight. Both of these teams realized the importance of sponsors decades ago. They both grew from largely under funded or self funded teams. In fact even with the bad news over the last year that both of these teams were losing their major corporate sponsors in the near future neither one has took to the forums bitching about their circumstances. They go out and market themselves and use the years of experience that they have to garner new partners.

We all could learn quite a bit by just watching what they do and utilizing it in a smaller venue like ours. First and foremost is the fact that we are small fish in the ocean. Yes the big money will certainly go to the big fish. But you need to think like a big fish. It’s critical to follow a few guidelines that will increase the chances for your success.

First, be professional in all circumstances. Regardless if you are approaching a potential sponsorship partner in person or by mail, step up to the plate and create a positive atmosphere. This is just like a job interview, but not only are you selling yourself you need to sell your program, your goals and objectives. If you walk in wearing jeans and a t-shirt what kind of impression does that give off? It’s called perceived sincerity and professionalism.

Second, your proposal should be to the point, grammatically & spell checked correct. Start with a brief introduction of your team and its record. Next, outline what your goals are, then finally layout some very basic programs and what you are going to give them for each of those programs and explain that dollars can be negotiated for each level. It is VERY important that they get something in return not just a sticker on your bike. More on that later

Third, is the follow up. I don’t care if it’s by phone or by email or snail mail. Follow up and ask if there are any questions. Don’t be a pest but you need to follow up to show that you are not shot gunning every company in your area.

This basic approach can be very successful. But I want to make sure that you understand that you must grow a relationship with the sponsor. That’s why it’s called partnering. I have a new acronym for you it’s ROI. ROI stands for “Return on Investment”. Most companies have an advertising budget. Most allocate it by December for the coming year. Typically a small company 15 – 20 people with sales up to a million dollars have budgets of 1 to 2 %. That is spread over the entire year. Advertising includes websites and maintenance, publication ads, expos and literature. Believe me that the bulk of that $20,000 goes very quickly so you could never expect them to hand you $5,000 but $500 might be fairly easy thing to negotiate. But these companies tend to be localized and not need national or regional exposure since their customer base might just be the town or city that they are located in. Keep in mind that these are the companies that many times look at what we do and say, “Wow, that’s pretty cool and how can I be part of it”. Something as simple as a team shirt or a weekend pass to the race could be the deciding factor. Once you set the hook and get them involved that’s the beginning of the nurturing concept. But the most important thing is physical or monetary evidence that by them supporting your team that they get something back of greater value than they gave you. Without getting into great detail, think of yourself as a rolling TV commercial. If they are not getting more sales then they will stop the commercial. If you are successful then they will put you in another commercial. That’s why you must over-promote their product or service.

At the other end of the spectrum are the mega million dollar companies. The reality 2 x 4 here is you stand little to no chance of even getting past the front door receptionist unless you are a “Name”. Your resume must be long with continued success and a proven track record. So if you don’t have that don’t bother wasting the printer ink and postage.

I cannot emphasize enough the importance of getting as many sponsors on board as you can. Money sponsors are scarce any more. Product sponsors are still out their but the new approach that seems to be making a big comeback is contingency sponsors. Being performance based this puts equal value on both you and your partner. You win and give them exposure and they give you money. Enough of these types of sponsors can really help everybody’s budget. In fact in one sanctioning body the contingency sponsorship money amounts to more than the purse to win. Obviously sanctioning body contingency sponsors are dependent on using that sponsors products but you can negotiate similar deals locally. Talk to you local gas station and tell them that you’ll run their advertisement all season but if you win they give you a free fill up. Heck if you win 4 or 5 times that’s $500 right there. Restaurants, tax accountants, general stores, all can be bartered. Just because its not money for your program it does free up disposable income to put toward the race program

So now I’m going to step up to my soap box. So you think you’re worth big money. Really now, just how much do you think your worth? Let me give you a quick math lesson. Let’s pretend that a company gives you $500. The ROI on that would be a minimum of $5000. That’s how much that company needs to sell based on a 10% profit margin just to not lose money on their invest in your program. So if you think that $1000 is not that much then consider that YOU need to increase their sales by $10,000. Forget all the bull about it being a tax write off too. That $500 comes right off their bottom line. Trust me a $500 investment in a classified ad in the local newspaper will get them more of a return than that. This is why it’s so important to sell them and sell them HARD. Sure till you make up decals with their logos and do a few publicity photos that $500 does not go far, but you must be willing to sell them. Patches on your shirts, appearing at a function that they are having all adds credits to you. .Thank them in a public forum with a lot of cross promoting can do wonders. Get as many brochures and business cards from them and make sure you hand them out wherever you go. Recommend them to your friends and co-workers. When you do this it gives you bargaining power the next season to ask for more and emphasize to them that you do more to support them.

It’s really very simple, fellow team owners. Get whatever you can and then build on it. Show appreciation in big ways so that the sponsor feels good about you in this 2 way relationship. Go above & beyond what you perceive as what they deserve. You may not make any money the first year but each subsequent year your relationship will grow. If you’re lucky in 10 – 15 years your budget might be ½ of what JFR or DSR is. ONLY KIDDING!!!!! But it will grow. Also the more promotions you do the easier it gets. It’s easy to promote 3 or 4 smaller companies because you can do it at the same time.

The last thing I want to talk about is how the sanctioning bodies are trying to attract sponsors. It’s hard enough to get them to come on board but then when these prospective sponsors see negative and unprofessional criticism on public forums of other sanction body sponsors, do you seriously think that they are beating a path to the sanctioning body’s door to be next in line for criticism? Also if the racers will not support them why should they bother to put up free money? Sit down once and use the same 10% figure outlined above and see how much more product each one of the companies must sell just to cover the contingency & purse money that they put out. That number goes upside down real quick. One major sponsor that put up potentially $825 in contingency awards for an 8 event season in 2013 has an anticipated exposure of $6,600 for the season. But let’s be real that was never going to happen but let’s say half of that or $3,300. That means to break even that company needed to see an increase in sales of $33,000. Does this give you a clue now as to why sanction bodies and you and I are struggling trying to get sponsors even without bad ink? The days of $250,000 sanctioning body sponsorships is OVER!! We all must learn how to do more with less. Complaining does not solve the problem. Your actions mean more and as a collective we can either have a positive or negative affect

Dano Wert

Article by Dano Wert

– Dano Wert


So stay tuned for Part 3 – Professionalism goes beyond combing your hair & washing your hands.

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