While many properties have begun routinely hosting sponsor summits to facilitate dialogue and cross-promotion ideas among their corporate partners, NASCAR is taking the concept one step further, and likely establishing a trend for others to follow, by establishing a separate body that focuses solely on business-to business marketing.

The racing organization established the NASCAR B2B Council in late ’04 with five founding partners. The goal was to explore and establish business-building opportunities between its member companies.

The idea paid off, with each of the original members having gained at least four new business accounts, said Justin Johnson, NASCAR’s managing director of partnership marketing.

The initial success caught the attention of other NASCAR sponsors: 12 additional members have since joined the council.

As much as it has benefited sponsors, the council also has yielded return for NASCAR. With more companies looking for direct sales and revenue generation from their sponsorships, the council has helped sponsor recruitment and renewal efforts, Johnson noted.

“ROI can be a hard thing to measure. If I can tell a sponsor that they gained new accounts as a result of the relationship, that’s an ROI model that works,” he said.

The B2B council was a major factor in the decision earlier this year by Ingersoll-Rand Co.’s Security Technologies unit to sign a first-time four-year official partner deal, said Mark Moran, president of the unit’s spectator sports division. IR took the tie to sell security systems to NASCAR teams, tracks and cosponsors.

“Thanks to the council, we have met more decision-makers than I ever thought possible,” Moran said. “My goal was to set up meetings in the second quarter, take orders in the third quarter and celebrate in the fourth, and we’re on pace to do it.”

The council serves as a platform to educate members about each other’s businesses. “Most people think of UPS as an overnight delivery service,” Johnson said. “But their representatives explained to the other council members that UPS is all about logistics, which no one really knew.

“UPS backed that up by handling all of the logistics last year when NASCAR had its first Busch Series race in Mexico and they got all of our haulers, teams and staff down there,” Johnson added.

Companies involved in the council expressed a desire for other properties they work with to establish similar bodies.

“While they may not be appropriate for all properties, many would benefit from a B2B council in their sponsorship solicitation and retention efforts,” said Patrick Guilbert, vice president of sponsorship and events for United Parcel Service of America, Inc., one of the council’s five founding members.

The growing use of sponsorship as a B2B marketing tool also should prompt more interest by sponsors and properties in B2B councils. Half of all sponsors include a business-to-business element in leveraging their deals, according to the annual IEG/Performance Research Sponsorship Decision-makers Survey.

Impetus Behind NASCAR B2B Council
Johnson came up with the idea for the council after meeting with execs from paper manufacturer NewPage Holding Corp., a NASCAR promotional partner, which is the sanctioning body’s next sponsorship level after official sponsors.

“Two minutes into the meeting, their vice president of corporate sales said, ‘If you want my renewal, you’ll have to help me sell 50,000 tons of paper,’ ” Johnson said.

The comment was a wake-up call for Johnson, who joined NASCAR in 2003 following a seven-year stint at MLB. “B2B wasn’t something we embarked on there. We spent most of our time activating B2C sponsors against the World Series and the All-Star Game.”

Johnson knew he had to get NewPage in front of decision makers that worked for other NASCAR sponsors. The challenge, he said, was getting NewPage in front of the right executives.

“Many people think B2B is about introducing two senior vice presidents of marketing. We realized we had to drill deeper and get to the actual decision-makers–the procurement directors that buy paper products, mobile phones for field staff and all the other goods and services our sponsors offer.”

To accomplish that task, Johnson invited corporate partners to the inaugural council meeting following the ’04 Nextel Cup Series season-ending race in Miami. The meeting was attended by five sponsors: Best Western, Int’l, Inc.; Callaway Golf Co.; NewPage; Sprint Nextel Corp. and UPS.

Structuring And Setting Goals For Council Meetings NASCAR now holds council meetings four times a year around major Nextel Cup events: February’s Daytona 500; May’s Nextel All-Star Challenge in Charlotte; September’s Richmond, Va. race that serves as the final qualifier for the Chase for the Nextel Cup; and November’s season-ender in Miami.

The meetings are attended by member companies’ sponsorship contacts and their colleagues responsible for buying business products and services. The participation of the latter group is critical for the meeting’s success, Johnson pointed out.

The purpose of each meeting is threefold: identify reciprocal relationships; determine ways to compress the sales cycle; and share marketing goals and activation ideas.

Johnson kicks off each gathering with a brief “state of the union” address that includes race attendance figures and TV ratings. He then introduces new members, who share their reasons for joining the group, the types of companies they would like to work with and their buying cycles.

Following that, the attendees break off into a series of 30 minute “speed meetings” between two companies.

NASCAR makes it clear that council participants must be as willing to buy from other members as they are to sell to them. “Their entry into the council is not worthy of consideration if they won’t make a commitment to offer reciprocal value,” Johnson said.

There are benefits to buying from fellow members, with discounts and other incentives often part of the mix. “Our strategy is to not only gain incremental revenue but incremental cost savings as well,” said Moran.

For example, Best Western invites cosponsors to join its MVP program, which offers employees of member companies minimum 20 percent room rate discounts and also donates five percent of their charges to the Victory Junction Gang Camp, a NASCAR-affiliated charity.

The frequency of the meetings often inspires members to move quickly on developing relations with other companies. “Many properties have annual sponsor summits, but often you go back to headquarters and lose track of what happened,” said Tony Wells, vice president of event and partnership marketing for Visa U.S.A., Inc. ”NASCAR is fully dedicated to supporting ongoing meetings so a dialogue can happen.”

“The goal of the meeting isn’t to exchange business cards,” Johnson said. “When we meet, we want action to be taken the following week.” To help deals along, NASCAR also has created a password-protected Web site for members to use.

While the council has been a success, it also has experienced some growing pains. The high level of interest in joining the council by other NASCAR sponsors could make the group too large to be effective, Johnson worries.

“It’s hard to have 20 companies in one room and still drill down deep,” he said. As an alternative, NASCAR is considering starting a second council. If it does, the two groups could meet jointly once a year, Johnson said.