The Myth of Free Stuff

A friend of mine made a comment the other day to the effect of, “Man you are so good at getting free stuff!”  Unfortunately, I think he is missing how a proper sponsorship relationship actually works.

While there are “charity” examples out there, the majority of cash or equipment sponsors are making an investment in you and expect a real return on that investment.  Our team does have a good track record of attracting and retaining sponsorship, but I would say this mostly because we don’t look at any of it as “free”.  Let me give a typical example:

A smaller cycling product company might have $2M in revenue and a $40,000 marketing budget.  To outfit our team with their product (clothing, wheels, components, etc.) will cost them something like $10,000 in cost.  That is a quarter of their budget and likely their single biggest marketing expense for the year!  In a public company, you are rarely allowed to get away with targeting anything less than a 15% return on capital.  If I follow that rule and keep it simple, that essentially means you need a quick path to showing a $11,500 benefit to them.  This can be in direct benefits like additional sales, or less easily quantifiable things like marketing exposure hits.

In an earlier post I mentioned that winning bike races usually isn’t really all that important to your sponsor.  While being the winning team typically gets you more exposure (additional interviews, photos, fans, etc.) that is an indirect way of going about things from a marketing perspective.  While our team is quite adept at winning bike races we work very hard to offer more direct benefits to our sponsor partners.  This is in the form of things like clinics, group rides, school visits, content generation, social media campaigns, etc.  Our riders and staff spend at least as much time on these activities as they do training and racing.  I strive to run the team like a marketing company that happens to use bicycle racing as its chosen media for communication.  By prioritizing resources accordingly we are able to offer a much greater benefit than someone who just happens to be fast on a bike.

This week alone we have a race in San Dimas, CA from Friday-Sunday.  On Monday we visit Felt Bicycles HQ in Irvine to meet their staff and discuss our equipment.  Then on Tuesday we have a school visit in Beaumont, CA to talk about bicycle safety and promote our next race before starting the Redlands Classic on Wednesday.  While that means there is no ‘down time’ for either the riders or myself, it also means we are able to maximize our California trip and give the best service to our partners we can – many of whom will gain far more exposure from our visits than any race results we will achieve along the way.

Next time you are writing a sponsorship proposal or asking someone to support your racing, think about what you are actually offering them (and how to communicate it) in return.  If you are willing to work for it and can quantify a real return you might be surprised how much ‘free stuff’ you can actually get!

Don't be that guy.

Don’t be that guy.

The Power of a “Good Job”

So I recently shared a text exchange to my wife.  It was between me and some of my riders, celebrating the fact our team received a last minute invite to one of the bigger Pro races on the national racing calendar.  We were both surprised by the high we got by reading all the virtual high-fives.

I have attended plenty of management training in my career and have always been encouraged to make an effort to find and celebrate the ‘victories’ in business.  However, the culture in most of corporate America makes this come across as forced in my experience.  We keep our emotion in check at the risk of not being ‘professional’ and are told to push for more instead of accepting the status quo.  The result being that I have had exceptionally talented peers confide that they didn’t know if their boss was satisfied with their work.

One of things that makes sport beautiful to me is that success is far more black and white, and the feedback is instantaneous.  In business, if I report a 25% EBITDA to my board for a quarter, they will almost invariably tell me to target 30% next time.  If I win a race, then I am the best that day – period.  (I have yet to have a team manager tell me I could do better than first place, but perhaps that is because I haven’t met a team manager with an MBA yet.)  On a well-run sports team, that instantaneous feedback makes for a much more open culture of communication.

On Horizon Organic/Einstein Bros, we meet before each race to discuss tactics and the plan for the day.  We then meet again that evening to go over what went well, and where we could do better.  Hugs and high-fives are given when we win, and constructive criticism is given when mistakes are made.  That isn’t limited to the riders, as I have made it clear it needs to extend to management as well.  If I do something well (like pull a bunch of strings to get us in a big race) then they all make an effort to tell me I did well.  If I were to run out of water bottles in the team car, then I am sure I would get feedback to not let that happen again!

At the level we compete at, everyone is super talented and well-prepared.  Mental confidence often makes the difference between winning and losing, and part of my job is to give my riders that confidence to ride at the front and make the race.  The fact they give it back to me, makes it all the more fun and our team that much stronger.  Whether you are managing a sports team, a small business, or a public company, we could all strive to do better with this.

And to the riders and staff of Horizon Organic/Einstein Bros, “Great job guys!”

We could all use an extra high-five!

We could all use an extra high-five!