I’ve been racing cars professionally for almost 15 years now, and as soon as people find out what I do, the questions start coming in hard and fast. Questions like “What’s the fastest you’ve ever gone?” and “Have you ever had a bad crash?” and so on. But the two I get asked the most often are these: “So you race NASCAR?” and “How do you get sponsors to pay you?”
I don’t really mind answering those same questions over and over (except for the NASCAR one; that’s fucking annoying.) But the sponsorship question is the hardest one by far, mainly because there are so many parts to it that any response turns into an hour-long dissertation on the commercial state of motorsports—and also results into said person never asking me another question ever again. At least it has that going for it.
To understand motorsports sponsorships you first have to understand the business of professional motorsports. A race team is a business like any other business. It has expenses—cars, drivers, crew, equipment, logistical, office, accounting, so much coffee, etc.—and needs to bring in revenue to cover those expenses. Where we go off the rails is in how we bring in that revenue.
Race teams don’t have paying customers like a normal business (I’ll leave the pay driver conversation for another day) so the only real source of income for teams is sponsors.
As you can see by just looking at various cars, in the various series around the world, there is no one type of company that has an interest in sponsoring motorsports. Red Bull, Rolex, Visit Florida, UPS, and Viagra have all graced the body panels of race cars all over the world. None of them have anything in common other than the value they, individually, see in racing.
Now some of you might read this and think, “Why would Holland want to tell me how to get sponsors to go racing? Isn’t this like taking money out of his own pocket?” Actually, no! It isn’t.
But there are so many people out there getting it totally wrong that they actually turn potential sponsors off and screw it up for the rest of us. More importantly, if more potential racers start doing a better job pitching and working with sponsors, it helps bring more sponsors into racing, making the sport healthier and hence more attractive to other sponsors. So there is a method to my madness.
Now let’s find out how to get you jokers paid.
When speaking with a sponsor, the amount of money you need to go racing is totally irrelevant. The only thing that matters to the sponsor is how much return they get on their investment.
This is by far the most important concept to get your head around when approaching a sponsor, and by far the one that almost every single one gets wrong.
It’s so important I’ll say it again. The only thing that matters is the sponsor’s ROI.
Imagine you run the Super Go-Fast Racing™ team. And imagine you’re meeting with the CEO of a widget company to ask for sponsorship. Your team needs $100,000.
The WidgetCo. CEO has that much in her marketing budget but also options on how to spend it—she can take out ads online, do radio or TV spots, or even make some good old fashioned email blasts.
All of those methods are tried and true, but, more importantly, their response rate can be directly measured and tracked—proving or disproving their effectiveness.
So let’s say the WidgetCo CEO decides to spend $100,000 of the marketing budget on online ads on a fictional automotive website that we’ll call Jalopnik.com. God, that name is incessantly stupid; who would ever name a website that? Let’s call it Puff-A-Lumps.com instead.
The CEO is all set to purchase ad space knowing that if she spends $100,000 on ads on Puff-A-Lumps.com, she will get an increase in business worth $500,000 from those ads (a 5:1 ratio is considered good; 10:1 is exceptional.)
Now you, the would-be racing mogul, are here to ask for the same $100,000. How do you show her you can give the same 5:1 return as online ads can?
Businesses exist to make money. If they give you some of their money, they are going to expect to make even more money in return. If they can’t show someone how they are going to make money by giving a racing team some, then end of story.
It’s that simple—but there is an exception. Keep reading to the end.
One of the big myths of sponsorship is that it’s only about PR and marketing. To be fair, there is absolutely a marketing component to almost every sponsorship deal. However, the primary driving force behind most of these deals is B2B (Business to Business).
What is B2B? In short it’s the exchange of products, information or services between companies rather than consumers (which is known as B2C). B2B works thusly:
Company A has something that Company B wants. Company A says OK, you can have it, but it will cost you. Company B says OK what will it cost us? Company A says “Well, we have this race team…”
Look at a race car sponsored by a big box store, for example. The first thing you see is the big store logo everywhere. The logical assumption is that the store is writing some fat checks to be involved in that program.
But look again a bit closer. Do you see all of the other big name logos like Coke, Energizer, Belkin, Crest, Dove, and so on? What do you think all of these companies have in common?
Yes. Their products are all sold at that superstore near you.
The store wants to sponsor a race car program but doesn’t want to write a bunch of big checks all by themselves. So they go to some of their retail partners who have been asking for better placement and promotion for their product at their stores nationwide.
The company gets better exposure for their product, which directly translates into more sales and the store gets funding to sponsor their race team. Deal done.
Do not expect to hit a home run your first time out of the gate. Even if you can get a sponsor a solid 5:1 ROI, most sponsors are going to shy away from someone without a proven record.
For a second dose of reality, do not expect to raise your entire racing budget from one sponsor. Title sponsors usually provide no more than 50 percent of your budget at max. You then have to go to secondary sponsors to bring in the remaining funds. This is generally true in every form of racing.
That being said, signing a primary sponsor makes the operation more attractive to secondary sponsors.
Which leads me to my next bit of advice: always have enough budget in the bank to go it alone. If a sponsor signs on, happy days! You don’t have to spend as much of your own money.
Well, logos on cars don’t do shit own their own. There needs to be a concerted marketing effort behind the logo on the car, to engage consumers and get the full benefit of the sponsorship. In the industry this is known as “activating” the sponsorship.
Your proposal can’t be, “I have a race car and it gets seen by a lot of people, therefore, if you put your logo on my car you will get exposure and people will buy your product.” There needs to be a plan to engage those consumers.
Where else will you car be seen? Car shows, magazines, TV? How else are you able to get your sponsor’s logo—and more important the company message—in front of the people that may want to buy their products? If you can’t do any of that, then the logo on your car is irrelevant.
You can expect a sponsor to have to spend $1 in activation expense for every $1 of sponsorship to maximize the investment. So in our fictional sponsorship deal, you, the owner/driver of the Super Go-Fast Racing Team™ is, actually asking for the CEO Of WidgetCo to spend $200,000 of her budget, not $100,000.
Do you already own the car you plan racing? A trailer? Tools? If the answer to any of those questions is yes, then congrats, you are ahead of the game.
Going to a sponsor empty handed is a tall task. If you are starting with nothing, you’re basically asking the sponsor to pay to get your program up and running. Technically, then, the sponsor doesn’t need you at all to go racing.
You may counter with the fact that you’re a really great driver with lots of potential and have won all kinds of races, but, to be completely honest, great drivers are a dime a dozen. Race team owners love to call us the loose nuts behind the wheel—if one nut doesn’t fit then you just replace it with another.
For a lot of sponsors it’s more attractive to sponsor you with product, or at least a discount on product, than cash. Think things like tires, parts, motor oil and so on.
But almost every proposal I see is focused solely on getting cash and totally ignores product sponsorships. If you were budgeting for an item you need to go racing, getting it for free is the same as cash.
Discounts on products are some of the easiest sponsor deals to put together. If you can get a company to give you a 30 to 40 percent discount on a product you need, that’s money saved on your end and most likely nothing more than unrealized profit on the sponsor’s side, as 30-40 percent is usually the profit margin on a lot of products.
Product sponsorships are also very attractive to sponsors because you are actually using their products in competition. It adds weight to the old “win on Sunday, sell on Monday” saying.
If that’s not enough, one last good bit about product sponsorship is that the sponsor typically wants to make sure that their product is seen is the best light, so they are more likely to provide additional support to make sure that their product is working at its best.
For the past couple of years at Pikes Peak I’ve worked with companies like Pirelli who had a tire engineer on hand to make sure I could get the most out of their tires. Alcon and Pagid who optimized my brakes, and JRZ did the same with my suspension. More importantly all of these companies were involved all the way through, giving me much needed engineering support.
This type of support is off-the-charts invaluable, and all at no cost to me.
Be warned that in racing (and in the real world) your reputation is the single most valuable thing you possess. Sponsors whose products and reputation aren’t up to par can drag you down with them. When you sign a deal, you are joined at the hip with your sponsor. Their reputation is your reputation and vice versa.
Several years ago I raced a Volkswagen GTI in the Pirelli World Challenge Touring Car series. We built the car with support of several product sponsors (see rule #6). One of those sponsors was a well known VW tuner who had a short shift kit for the GTI.
We debuted the car at Mosport in Canada, one of my favorite tracks, and we were quick out of the box. But during the first practice I had an issue with the gear changes. When I tried to engage fifth it felt like I was getting third as the engine revs would go up as I released the clutch, not down as they should on an upshift.
A post session tear down revealed that was indeed the case. Unfortunately during one of these mis-shifts, I had over revved the engine. While it was still functional, it was also down about 15 horsepower due to a damaged valve. I still managed to set a track record during the race but was only able to get a third place finish in the race due to the missing ponies.
I had to go back to the sponsor after the weekend and tell them that I couldn’t represent their product anymore, as I didn’t want someone purchasing their flawed product based on my endorsement.
The opposite of that was earlier this year at Pikes Peak where I ran a salvage title Corvette Z06. The stock Z06 has a well-known overheating issue and my car had an extra 200 HP, which wasn’t helping matters. There were a number of partners we worked with to control the issue, one of which was fluids supplier Motul.
As expected during the race, my engine temps started creeping up. Mid-way through the run I was seeing 320 degree oil temps, the point at which the Z06 starts shutting down to protect itself. More importantly, it’s above the temperature where oil can start to fail.
As blowing an engine on the side of a mountain at 130 mph is not something that would be conducive to my continued existence, I was more than a bit concerned. However, having worked with Motul, I knew that their product was capable of holding together. I was able to continue to push to the top and grab fourth in class.
Truth be told, I was offered a substantial amount more to sign with another supplier, but one with a product that I felt was much less capable. If I had just gone for the money grab, the post on the race could have been a lot less positive—or an obituary.
There is nothing more soul-shattering than trying to land a sponsor. I will pitch a hundred potential sponsors just to land one deal. That’s been every year for the past decade and a half.
Most companies you approach will tell you give you a flat-out no, or simply not respond. However, the hardest ones come from sponsors that actually show some interest. Once you get an initial positive response, it’s amazing the things that you’ll do to try to get that contract. Changing proposals to fit the whims of a half dozen different VP’s? No problem. Multiple PowerPoint presentations? Hell yes. Fly out to meet with the big boss? Sure, what time’s the flight?
Then you wake up to an email that begins “Sorry...” And weeks and months of work mean nothing.
All I can say is, keep trying. If you’ve paid attention to my above rules and you keep pushing eventually you’ll get there. If not, maybe the reality is OSB (Other Sports Beckon.)
So let’s say you are successful, and after all the blood, sweat, tears and PowerPoint presentations, you finally landed a sponsor for your Super Go Fast Racing Team™.
Great! Now the hard work begins.
I spend more time taking care of my sponsors then I do driving cars. From the outside, motorsports all looks like champagne and glory, but the reality of being a professional race car driver is that it’s a job just like any other job. Don’t you get sprayed with champagne at your job?
I mean sponsor event appearances, media days, trade shows (You think anyone wants to be at SEMA?), dinners where you hear bullshit stories from company VPs, and so on. All of these things add up to a full-time job and then some. And that’s just the stuff that’s in the contract.
This conveniently leads me to my next point. Always under-promise and over-deliver. If you’re contracted to be at an event for an hour, stay for two. If you’ve said you’ll do two Facebook posts a week, post every day.
All of these things get noticed by a sponsor. The more value you bring, the easier it will be getting that sponsor to sign on again for year two.
Oh sorry, did I forget to mention, most deals are year-to-year? After one year the deal is done, so one of the first things you’ll need to do is start working on the proposal for next year.
Last but not least: if you have rich parents then ignore rules #1 -9 and go straight to enjoying your career as a race car driver. As with everything in America, it’s easier when you just start rich.