What's the most important thing that you look for in a driver?
If you said "On track performance" you are living in a fantasy world. The correct answer is, "The ability to generate exposure". It has always been like that. If you win, someone might want you to wear their shirts, or use their copiers, but the reason is that they want to be able to say "Alan wins with Acme" (making up names)
John Force had never been close to winning a race when he hooked up with Castrol. But he promised them that he would spread the word, and he delivered. Twenty-three years later, he still is. Kenny Bernstein went to Budweiser and told them he could help to sell beer, not that he could win races. That came later.
Let's take an example of Alan who is a successful businessman who has the money to race Super Street. Alan is willing to spend 1.5 million of his own money because he loves to race and he can afford it. Are you with me so far? Along comes XYZ corp. and wants to be on a car. They call Alan and say we would like to sponsor you for half a million dollars, just paint our logo on your car and cash the check. Alan says "DEAL!" I'm still having fun racing, and now I'm saving $500,000.00 What a deal! After all I was going to spend the money anyway. And XYZ can say that they have a Super Street car.
Now, on the other hand, Fred is a car owner who races for a living, he doesn't have the money that Alan does, but he has been able to feed his family from racing for a while now. His driver is Chuck, Chuck is a good driver and Fred pays him $50,000.00 per year plus a percentage of what they win, last year Chuck made $85,000.00 But Chuck isn’t that good at public speaking, he is even a little camera shy when the ESPN guys come by. Fred can't afford to spend 1.5 million to keep up without sponsor help so he tells ABC corp. that in order to race he needs $1,500,000.00, You still following me? ABC corp. says, well, XYZ is only spending 500 thou. so why do we need to spend three times as much? Fred tries to explain that the true cost is 1.5
XYZ now is thinking that they could call Alan's brother Jeff and get on board for "just" $500,000.00 But, Fred knows the game, he tells ABC that he will display the car 30 times a year in all the major markets. He will make the trip to the ABC annual sales conference, display the car. He will welcome the regional “Salesman of the month” as a VIP guest at the races in that region Above and beyond what Alan does for XYZ corp. ABC says, OK we can go $1,000,000.00 but that’s all we have. Fred thinks he can do it for that if he cuts back on testing and maybe does a little less R&D. (Do the math, he is giving up $10 THOUSAND a week!) But halfway through the season, he is running short of cash, and not running very well, because he can’t afford to test. ABC corp. is thinking that they are spending twice as much as XYZ and not getting the same results. Along comes Jeremy who has a connection with GHI corp. he is willing to pony up $750,000.00 Above and beyond what his salary will be, because he is a paid spokesperson for the company. Fred tells Jeremy that he will have to speak to the ABC corp. functions, and make appearances, Jeremy says, “no problem”. Fred has known Chuck for years, and hates the thought of having to let him go, but he can’t keep racing without the extra money, so he does what he has to do.
Now, is Fred the bad guy here? If you were Fred, would you do it differently?
Next week we’ll talk about Personal Services Contracts.
Alan