Perhaps you have been approached by someone in the NASCAR industry about sponsorship – this could be sponsoring a specific race team, becoming the sponsor for a specific race event, or even becoming an Official Partner of NASCAR itself. What are your next steps? How do you proceed? There are at least five fundamental questions that you should ask yourself when considering a NASCAR sponsorship.
How much will this cost?
Cost is probably the first question that pops into everyone’s mind when considering a sponsorship. I caution you to take time to ask questions and think through the costs. Beyond the direct sponsorship cost – that is, what you pay for the assets - typically, you will find there are additional costs for activation, staffing, travel and other areas depending on the type of sponsorship. How you structure your deal will also impact the final costs – who will produce the signage, who will install and remove the signage, who pays for the apparel – all of these are great questions to consider when negotiating your sponsorship package. For a deeper dive into the costs associated with a NASCAR race team sponsorship, take a look at our previous blog post on this topic.
I recommend talking with others that have sponsored something similar in the past. They can help guide you on how to account for the additional costs. There will always be room to spend more money to go bigger and take your sponsorship to the next level. However, consulting with someone that has experience in working with sponsorships (ideally, a marketing agency) can help you prioritize what is the best way to get started and what can be added later. Hopefully, you are working with a partner to which you can ask candid questions and work alongside so each party wins at the end of the negotiation. Remember to choose your partner carefully.
Who will manage the sponsorship?
Once you sign on to become a sponsor, there is typically more work to be done to bring the sponsorship to life. Having clear understanding of who is responsible for each element is critical. Is the partner going to activate each of the elements that they sold to you during the negotiation? Do you have a team from your own company that will be working on the sponsorship elements? This can be done in a number of ways and it really boils down to how you are set up organizationally. Some companies that have internal support for the sponsorship will divide up the elements amongst themselves and tackle the activation in-house. Other companies would rather spend resources to hire a marketing agency to activate the sponsorship and they simply manage the agency (who is managing the sponsorship).
As we mentioned in our earlier blog post regarding race team sponsorship assets, there are several components to a healthy sponsorship. These include, but are not limited to, public relations, branding, customer entertainment, and B2B opportunities. You may find that your company is well suited to handle some of these areas, but not all of them internally. Therefore, you may look to hire someone as an employee of your company to fill the void or simply outsource to a group that specializes in the area where you have functional, or capability, gaps. Either way, don’t feel pressured to do this alone. Assembling the right mix of support will make a huge difference in the success of your sponsorship.
What does success look like?
Before getting started with a sponsorship of any kind, it is crucial that you clearly understand what you are looking to accomplish for your business. What is the itch you are trying to scratch? When considering a NASCAR sponsorship, ask yourself and others involved, does this help solve our problem of (fill in the blank here). As sponsorship outcomes vary from deal to deal, there is not a single answer to this question. The only answer that matters is how YOU define success for your business.
Perhaps you are a brand-new company looking for a way to get your name out there. You believe in your product and know that everyone’s life will be 10X better if they would start using your product, but you are not sure how to reach your audience. I suggest asking questions to the people around you of how will sponsoring this race team or race bring more awareness to our product. Will this type of sponsorship reach the correct audience? What happens when they see my product brand? Is there a call to action as part of the sponsorship? These are questions to consider as you evaluate what success looks like for your investment.
Before you spend money on the sponsorship, be clear on what problem you are solving and what you hope to get out of your investment. Knowing this information up front will help you set up tracking and measurement tools to help you determine if the sponsorship was successful or not at the end of the term.
How will I measure results?
Now that you know what you are trying to accomplish, or problem you are trying to solve through the NASCAR sponsorship, it’s time to consider how you will measure your investment. You have probably heard the phrase “measure twice and cut once” – this is applicable here. It’s important to take the time and set up tools to track your sponsorship activation to know at the end of the sponsorship whether you accomplished your goals or not. If you get to the end of the sponsorship and you don’t know what you got out of it, how do you know if you should reinvest for another term? For more details on understanding why measurement is so important, check out our blog post on measuring sponsorship impact.
Thankfully, there are some great tracking tools to help you. If brand awareness is your goal, there are companies that will track how often and for what duration your brand showed up in the media (tv, radio, print, socially). If you are looking to close deals through your sponsorship and the focus is on customer entertainment, there are a few methods you can use to track sales. First you can set up your program so that only customers that have spent X amount in new business are eligible to attend or be part of the event. Another way is to invite prospects and your sales representative that calls on them to the event and track the progress of engagement post event.
Whatever your goal is, take the time to invest in measuring your results. When you arrive at the end of your sponsorship and you are considering renewal, this key piece of information will be critical for your next decisions.
How long will it take to see results?
Living in an immediate world these days where everything is at our fingertips, we can get frustrated when things take longer than we expect. Be patient though, Rome wasn’t built in a day, right? I think the best way to approach this topic is to set markers, or milestones, up along the way. If you have followed the outline of this blog post and have set up a tracking system to monitor activity and ultimately give you an idea of whether this investment in a NASCAR sponsorship has worked or not, then you are on the right path.
Using your tracking system, set up short term goals for your sponsorship. If building a database of potential leads is your goal, set a realistic target for the first event that you are going to be collecting data. Once you have completed your first event, measure against the goal you set for it and really think through how you could improve, what went right or wrong and talk about it with others involved. This will help you be more prepared for the next activation (of which you should set a goal for as well). As we noted in our previous blog on measuring the impact of sponsorship, sponsorship awareness may take between 3-5 years to fully penetrate a fanbase, thus you must be patient with the sponsorship process along the way.
Continuing this process in realistic steps throughout the entire sponsorship season will help you avoid the pitfall of getting to the end of the term and wondering what went wrong. This method will also keep you engaged along the way, energized when you hit your short-term target and keep you from wondering whether your investment will provide the return you are looking for.
Investing in a NASCAR sponsorship is a big decision. You are essentially locking arms with a partner and stepping out into the world to let everyone know about it. Take your time to choose a partner that will help you reach your goals. Be sure to ask yourself these five questions so that you are ready to launch as soon as you make the commitment.
You will have other questions along the way, but hopefully this list will help you get started. If we can help you navigate through any questions around a NASCAR race team sponsorship, please let us know.