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Editor’s Note: The author, David LaPorte, is the executive director of the Nature Valley Bicycle Festival, a 10-day celebration of bicycling that includes amateur and professional racing, recreational rides, kids fun races and other community events. The Nature Valley Grand Prix, part of the Festival, is part of USA Cycling’s National Racing Calendar.
Ever wonder why a U.S. company outside of the bicycle industry would invest in bicycle racing? Here’s a hint: it has nothing to do with athletic excellence or a love of the sport. Any marketing executives who buy a sponsorship based on a personal passion for the sport should polish up their resumes, because they’ll be looking for a new line of work.
None of these companies directly profit from bicycle racing. For them, and hundreds of other U.S. companies, bicycle racing is an engagement marketing platform. If the sponsorship successfully supports their marketing goals, it will thrive. If it doesn’t, it will die.
Sports like American football, basketball and baseball are wildly popular in the U.S. Just being associated with a popular team produces a return on investment (ROI). But even these sports execute against their sponsor’s marketing goals, because then they get more money.
In cycling, we’re so close to the sport that we often make the fatal mistake of assuming that our sponsors share our goals. They don’t. Just ask them. And cycling isn’t popular enough for a simple association to be valuable in the U.S. marketplace. So having a dominant team or an epic event won’t rake in the cash. If a sponsorship property doesn’t advance the marketing goals of the client, it’s toast. Or, more likely, it won’t have even gotten in the door in the first place.
Bicycle racing isn’t competing just with other sports sponsorships. It is also competing with other event sponsorships (e.g. music festivals) and advertising strategies, such as 30-second TV spots, print ads, couponing programs and increasingly, social media campaigns. Good marketers will spend their budgets on whatever mix of strategies deliver them the highest ROI.
For the sponsorship to be sustainable, it’s critical that ROI increase in value as the years roll by. If the sponsor is excited by the growth potential, they are a lot less likely to shift their money into some other strategy. But if they think that the value has topped out or is in decline, they are likely to figure that they’ve squeezed all the value out of that marketing strategy and will give something else a try.
Nature Valley likes the energy and big crowds of criteriums, so three of the six stages of the Nature Valley Grand Prix are criteriums. They wanted a national program modeled after their Nature Valley Amateur golf property, so we created the Nature Valley Pro Ride. They’re big believers in sampling, so we sample at all of our events and connect them with other events, including recreational rides. They also wanted to do retail promotions, so we recruited a grocery store chain as a sponsor. We added a Gran Fondo this year to help them reach recreational riders. Now they want us to make the Nature Valley Bicycle Festival a tourist destination.
These changes have not only delivered more value to Nature Valley for 11 years running, but they have made our events better. We have reached our goals of expanding the fan base, promoting all forms of cycling and raising money for a pediatric hospice. So you can have your cake and eat it too.
What’s true for events is also true for teams. Teams need to understand their sponsors’ marketing goals and execute against them. And, just like with events, it’s usually a fatal mistake to assume that your sponsors have the same goals that you do — because they probably don’t. Again, just ask them.