Is ROI better than exposure?


Finding sponsors for the upcoming race season can feel like an all-consuming process. You may have done all the correct research leading up to when you meet with a potential sponsor, and the brand could be a perfect fit for your race team, but if you don’t know how you can provide a return on their investment (ROI) then you might be turned down.

What is ROI?

Let’s go back to the basics first. In the words of Alex Striler, “Return on investment is a metric that measures the performance or benefit of an expenditure. If a company spends $100 on something and it gets back $500, then the tangible return on investment is $400, or 4X the original investment.” So how can you apply this methodology to racing?

When you are preparing your deck to pitch your ideas to a brand, you want to know what they currently do to measure ROI. The best way to find out is to simply ask them. “Some companies have a formula, but most do not. Trying to calculate returns for several hundred race teams is not something many people are prepared to do. This is where you can help them. The more information you give your sponsors in a year-end Proof of Performance Report, the more you help them justify the expense of your program.

“Calculating the exact ROI is impossible, so use the topic to demonstrate your understanding of the business of sponsorships. Show marketing directors that you understand their financial challenges, and you know how to support them with useful data.

Never offer just exposure!

Have a companies logo on the side of your race car used to be the most valuable position a team could offer – but that just isn’t the case anymore. Instead, there are many deals going on behind the scenes with teams that never advertise on the car, they simply find other avenues to work together. Now I’m not saying the exposure of logos on your vehicle is bad; if you are getting media’s attention and they are printing your images or posting them online that is great! Having that high visibility and reach is very important; but it’s only one piece of the sponsorship puzzle.

In fact, Alex says that exposure is the last thing most sponsors want; they are more interested in activations and sales, they want B2B relationships and VIP hospitality for employees, customers, and vendors. But, if it’s a new brand or a new company that is just getting started, they will be more interested in exposure to build up their brand awareness. However, if they are very new, then they most likely won’t have a budget fit for your funding needs. “If you’re going for the big money, you need the big companies. But big companies don’t need exposure; they need a lot of things but not exposure.”

Where most teams stop at putting a logo on a car when pitching, I want you to focus on expansion and strategy to create value. You should take advantage of marketing tools that are out there and available to you that weren’t around 10, 20 years ago. When you are pitching, are you thinking long-term? Is this a company you only want to work with for 1-2 years, or do you want to renew with them for years to come?

Every type of company needs different help when it comes to the marketing goals they are trying to achieve. Do your research to see how long they have been around, have they sponsored motorsports in the past, and how they currently calculate ROI.

When you’re ready to take the next step after finding out the facts, you’ll need a marketing presentation to pitch your sponsorship ideas! Download my free guide HERE to know how to create your sponsorship deck.

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