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Winning doesn’t guarantee cycling sponsorship!

  • 485 wins since 2009 is simply incredible!
  • Losing a title sponsor that heralded your team as a valuable marketing asset is unfathomable.
  • Is HTC’s loss of their title sponsor simply the cost of doing business?

As cyclists and cycling fans we just learned a very important lesson! Winning races alone does not guarantee cycling sponsorship! Even the most successful team over the last 3 years, winning 485 races, is not immune to a title sponsor deciding to walk away. It seems difficult to fathom, in light of HTC CEO Peter Cho’s rousing endorsement of Bob Stapleton’s team and the value sponsorship would bring to the company’s brand: “…we are excited about the opportunity to communicate HTC’s brand value through the great sport of cycling…. “HTC’s sponsorship of Team Columbia-HTC is one step in HTC’s commitment to increasing its global brand value and recognition.”

So, why did HTC have such a dramatic about face? Here are a few thoughts we should keep in mind with regards to corporate cycling sponsorship.

01) Cycling sponsorship is a business! Corporations as Taiwanese telecommunications giant, HTC, invest in sponsorship to achieve business objectives as increasing sales, revenue, market share and competitive position. Companies leverage cycling sponsorship, its global platform and growing demographic as a marketing platform to:

  • Create awareness and visibility for their company, brand, products and services.
  • Increase customer and brand loyalty.
  • Project an intended image and garner positive PR to attract new clients and consumers.
  • Augment existing marketing and advertising campaigns.

Companies don’t sponsor cycling, as the recent velonews.com article “The secret handshake for bicycle racing sponsorship” noted, because they share our passion for our wonderful sport!  In fact, I think one of the comments from a velonews.com reader summed it up best by writing “…Simply riding in the team kit and getting on the podium isn’t enough.” The bottom line, cycling sponsorship is a business!

02) Cycling sponsorship MUST drive business results: Companies expect a Return on Investment (ROI) from their investment in sponsorship. Measurable business results like increasing sales, revenue, market share and competitive position only come from creating (or increasing) awareness and visibility with consumers and clients in the company’s target markets. Cycling sponsorship’s impact on a company’s Key Performance Indicators (KPI’s) may be measured through:

  • CPM (Cost per one thousand media impressions; the number of marketing opportunities presented how many people see and/or recognize the company’s brand, product or service in an advertisement, at an event…). The Reuters article “Sponsors see value in backing cycling teams” describes how cycling delivers more affordable cost per one thousand media impressions (CPM) making cycling sponsorship a bargain when compared other popular spectator sports.
  • Surveys, questionnaire’s, focus groups, etc, help identify the impact of sponsorship on recognition of a company’s name, brand, product or service.
  • Codes, e-mail, registration or “opt in”, responses to promotions, traffic (store, event or website): Metrics sponsors will review are – “Did sponsorship have a significant impact on the number of consumers entering a specific code, signing up for something through e-mail, registering on a site on the web or redeeming a coupon?” Most sponsoring companies will quantify how well sponsorship of your team supported a company attaining their business goals by measuring these factors. Which is why it’s critical to qualify what a sponsor expects and what your team can realistically deliver. (More on sponsorship qualification later).

Visibility may also be measured through something as simple as counting minutes of television exposure the team and sponsor receive. During Versus’ coverage of the Tour De France Paul Sherwen noted how one team broke down the number of minutes its riders were on television throughout the Tour. Typically these minutes were in long breakaways where the sponsor’s company name was highly visible to the global TV audience. The minutes were tallied and presented to the sponsor as publicity and exposure which drives awareness, brand recognition, interest and traffic which can result in increases in sales, revenue, market share and competitive position.

03) Meeting expectations: As mentioned in the previous section, clubs and teams need to qualify sponsors thoroughly to ensure they can deliver expected business results. It is vitally important to perform research, engage in discussions and understand how your team will be measured and how the prospective sponsor will measure success (Example: increase in coupon redemptions by 25% over 60 days, increase in survey responses, increases in traffic and sales by 30%). Your club needs to have a thorough understanding of the sponsors business objectives, how you will be measured, over what period of time, and if it is possible to deliver the desired results.

04) Sponsor qualification: Another component of the cycling sponsorship equation is your qualification of a prospective sponsor. To ensure success your club or team needs to evaluate how well sponsorship will help the prospective sponsor reach their target audience and cycling’s demographic.

The sponsor is qualifying you and the value sponsorship of your club or team provides. It is equally important for your club to qualify the sponsor in order to meet their expectations and maintain a long-term, mutually beneficial relationship. To establish a successful sponsorship relationship overlap needs to exist between their market and people who will be exposed to your team through events, races, participation in community service, local or national initiatives, communications or social media platforms.

Simply stated, if a company sells a ubiquitous, industry leading, telecommunications product, but most of their target market are not cyclists or fans of cycling; their sponsorship of a global team is not going to provide the return on investment they expect! It doesn’t matter if cycling sponsorship is a more cost-effective vehicle than traditional sports or advertising methods. Reaching their target audience and driving results has to be the foundation of a mutually beneficial sponsor relationship. If they don’t achieve the expected results the relationship will not last.

Here are a couple of tips to keep in mind.

Always look for new sponsors: Your search for new sponsors should never end. It is a year round proposition which, just like training for a race or major event, never stops. An effective annual sponsorship plan is just like base miles can in preparing for the upcoming season. It’s a continual process which can pay huge dividends by following a structured process. Think about it, when is it ever a problem to have too many sponsors or too much funding?

Lastly, perception means everything! A positive perception by companies sponsoring, or interested in, sponsoring our sport is paramount. Identifying and understanding those perceptions enables your cycling club or team to remove potential barriers and objections which might prohibit a sponsor from investing. As mentioned in “2011 Tour: A recipe’ for sponsorship success use every opportunity to sell the value of our sport to companies large and small, regardless of industry or location. Point out how companies sponsoring professional teams are receiving incredible exposure for their company, brand, products and services. When loyal domestiques go off the front, fry in the sun and are battered by winds for hours, explain how this is a tactic to not just attempt to win, but more so to provide exposure for the sponsors emblazoned across the jersey’s, helmets, shorts and butt! Television cameras, photographers, eyeballs in person, and on television, internet, from smart phone, laptop, are all capturing and displaying the action.

Watching HTC-Highroad fold is not easy for any fan of cycling! However, hopefully, we can learn from this experience and accept that winning races is not the only component in the sponsorship equation.

Thanks for visiting. Remember, until next time, “Keep the rubber side down!”

P.S. – Thanks to Bob Stapleton, members of the HTC-Highroad men’s and women’s team and to the HTC company for giving us some incredible memories over the last 3 years! You did it right!

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