Understanding the Power of B2B Deals in Sponsorship
When we see or hear of sponsorship deals taking place, we typically see the surface of it. Drivers/team announcing a sponsorship deal on social media, logos plastered on race cars and fancy branding work. What happens behind those deals almost always goes far deeper than just a plain branding deal.
Business-to-Business deals (B2B for short), are an often forgotten but immensely powerful and effective way of finding the money to go racing. We’re going to cover what it is and strategies you can apply to make it work for you.
The reality of traditional sponsorship
The cost of motorsports is nothing to joke about. Even entry-level series like Formula 4 cost hundreds of thousands of dollars a season to compete in. If you’re trying to sell exposure and compare that to the cost of media buying. It’s almost always going to be a losing proposition for you.
Often the number of fans at a race circuit or following of a race series is to just too small to justify a sponsorship that covers the season’s budget. Yet, the cost of going racing is anything but small.
Until you get to Formula 1 or Indycar, where you have worldwide exposure from millions of fans. It’s really difficult to sell exposure itself. But then in Formula 1, the costs are exponentially higher. Even for a mid-pack team like Haas, they’re spending well over US$120 million for season.
Sponsorship itself really isn’t enough to pay for the season’s budget which ranges in the hundreds of millions, yet the cars are still going racing.
So is all hope lost for sponsorship? Absolutely not. It’s a very viable way to bring in some funding but its effectiveness is skyrocketed when combined with B2B business deals.
Businesses within Motorsports
These are just a few types of businesses involved in motor racing:
Often these are huge businesses that have a global presence. What brings them to racing is all the B2B opportunities and exposure they get.
You see, without race teams to run race cars, tyre companies don’t have cars to mount their tyres onto, and without race tracks, the race cars don’t have anywhere to run.
This is all very simplified, but the point is there are hundreds of businesses who benefit from an involvement in motorsports and they’re all connected in some way. Almost all of them are focused on growing and turning a profit run sustainably.
Working with them to benefit their business in a big way opens you up to a lot more bigger opportunities.
Your job is to simply help them grow, by either increasing their sales, amount of customers or saving them money. You can do this by using the resources of one company to benefit another.
For example, you could get a lubricants supplier to give you their products at a cheaper cost, which you could then sell to your race team or auto shops you have a relationship with. In exchange, you give them all the sponsorship benefits and exposure at the race tracks plus you help them sell more.
What’s your unique offering?
For a company not involved in motorsports already, one of the biggest selling points and value propositions you as a racing driver have is access to the motorsport industry. You have contacts, knowledge and expertise. There are many products that have been developed or tested in motorsports, and this is exactly why so many major car manufacturers are in Formula 1 and Formula E developing their technology.
Some questions you can ask yourself include, who do you already have relationships with? Do you have a good relationship with a company you work for? Does your family or relatives run a business?
What is it that you can provide that makes you invaluable to a team or sponsor? How can you bring value by connecting two businesses or more?
It’s a must to find the unique value you can add to the offering. It may have something to do with where you come from, the people you know or whatever industry experience you have.
Once you’ve thought about what you can offer. You have to link that up with what a company wants. Put yourself in the business owner’s shoes, ask what would make this a truly great deal for them? Can their audience or ideal customers really be found in motorsports?
Count the Numbers
If it was easy, everybody would’ve done it and been racing already. Most deals you try to put on may not happen for some reason or the other. You have to learn from each failure, and then assess and adjust your strategy going forward.
Don’t only limit your options to your racing program only. Because there may be much more suitable championships, racing drivers, and teams who could work with a company. If you have a company’s best interest in mind, then it could be even more lucrative to strike a deal with another driver or team. You help them get a B2B deal and then get sponsorship or a commission for putting the deal together.
The mindset to take away
Think of all of this as creating partnerships more than sponsorship. This is business after all, so be professional, conduct yourself like a real businessperson.
Be a connector. Look for opportunities for sponsors and companies to do business with each other, through hosting networking events, workshops or putting on other activities.
Sell sponsorship benefits on top of a B2B deal. This can really sweeten up your offering and help bring in the budget to go racing.