Even though I grew up in the Deep South my perception of NASCAR had always been a Non Athletic Sport Centered Around Rednecks. But when the order comes down from Gonzo corporate HQ to attend the Subway 500 at Phoenix International Raceway (PIR) – preconceived notion or not, it is a Gonzo’s duty to venture into the unknown.
So, we were off to the races. It took us nearly two hours just to enter the parking area. And once we parked, the racetrack was still nowhere in sight. What we did see was a city in the middle of the desert. RVs covered the landscape, and the sky was filled with waving flags displaying numbers like 24, 48, 17, 8 or 3. As we debated which way to go, we finally agreed that the best course of action was to follow the Budweiser signs (we were pretty thirsty, you know, it being the desert and all).
Within a matter of minutes from entering the stadium we realized the loyalty, passion and commitment of the NASCAR fans runs skin deep…literally.
Having now experienced my first NASCAR event with 110,000 in attendance; GonzoBankers, I believe the National Association for Stock Car Auto Racing, an organization that boasts 75 million racing fans with more than half being hardcore, can teach us a few things about true customer relationship management, technology innovation and integration, and the power of a brand.
Gonzo faithful, we have been struggling for years about how to increase revenues and lower costs balanced with growing our customer base, strengthening customer loyalty, offering best in class service, building brand identity and investing in technology to improve our customers’ experience. Admittedly, some progress has been made, but all of our efforts combined pale in comparison to what the “good ol’ boys” of NASCAR have done within the past few years.
Numbers Don’t Lie
According to Wall Street analysts, in 1990 the net value of NASCAR was placed at $1.5 billion. Fifteen years later, the value is now estimated above $10 billion. An increase of this size either means the South expanded above the Mason-Dixon Line or the demographics of NASCAR customers are changing. The following shows the regional distribution of NASCAR fans:
|
US Population |
NASCAR fans |
|
| Northeast |
20 percent |
20 percent |
| Midwest |
23 percent |
24 percent |
| South |
35 percent |
38 percent |
| West |
21 percent |
19 percent |
| Source: NASCAR | ||
Not only is NASCAR expanding geographically, it is also focused on increased ethnic diversity as highlighted below:
|
1999 |
2003 |
Trend |
|
| Hispanic |
3.6 percent |
8.6 percent |
+139 percent |
| African-American |
4.9 percent |
9.1 percent |
+86 percent |
| Source: NASCAR | |||
More than half of NASCAR fans fall between the ages of 18 and 44 with an annual income of more than $50,000, and, believe it or not, women account for 40 percent of the fan base. Feel free to correct me, but I have seen many a bank strategy that had a very similar target base. Moreover, what began in 1948 as an exposition of Southern bravado and a weekly bootlegger gathering today trails only the NFL as the nation’s most popular sport.
Growing the Base
In 2004, the big NASCAR races (e.g. Talladega, Daytona, Brickyard and my apologies to the “big ones” I left out), sold an average of 186,000 tickets at an average price of $75. New race tracks have popped up in Phoenix and Texas and new tracks are planned for Los Angeles, Chicago and – can you believe it? — New York City.
Opening tracks in Phoenix and Texas is one way NASCAR is capitalizing on one of our nation’s fastest growing populations, Hispanics. According to the U.S. Census Bureau the Hispanic population will nearly triple from 35 million to 102 million people by 2050. Remember that strategy you put together last year talking about banking the un-banked? You might want to dust it off.
Customer Loyalty
A chilled Budweiser tall-boy (that’s a 24-ouncer) brings in many a fan but the Official NASCAR Members Club hooks ‘em for generations. Having Richard Petty as the National Membership Chairman (if you don’t know who he is then you really do need to get out of the office more often) is like having Warren Buffet as your bank’s spokesman.
The Official NASCAR Members Club is open to all race fans 13 years of age and older. Talk about a loyalty program. A few of the perks include behind-the-scenes access and experiences, such as NASCAR VIP treatment at races, race week parties (oh and for those 21 and over, all the Budweiser you can drink), a membership magazine, special weekly emails from your favorite drivers, a members-only Website, and special discounts on Official NASCAR authentic items. And to top it all off, members receive a NASCAR Members Club “PowerPass” that they can proudly display around their necks at any raceway, alerting onlookers that they are looking at “King Bubba.” The best part of the deal is that the $40 annual membership dues can be paid with a favorite-driver-branded official NASCAR Visa from MBNA. (Somebody’s paying attention.)
In banking we like to measure customer loyalty by length of relationship and/or products per household. NASCAR has its own measurement for this elusive prize, “All Bubba’d Up.” When race fans get dressed to go to the races, they get all bubba’d up. They have on their favorite driver’s hat, numbered shirt, pants, socks, shoes, sunglasses, earrings, and whatever else they can find that proudly displays their loyalty to the sport and their favorite driver. Guess the identity of this GonzoBanker who beyond a shadow of a doubt got All Bubba’d Up:
Banking on a Brand
When Nextel Communications replaced Winston as the flagship sponsor of NASCAR, many held their breath fearing the South would rise again and a civil war would ensue. I mean, really, what the hell does a communications company know about racin’? Apparently a lot. According to Nextel, more than 90 percent of avid race fans are now aware of the Nextel brand. Not bad for only one year of marketing. This was accomplished through at-track branding, national promotions, advertising campaigns and proactive media relations. BusinessWire reports all this resulted in a conservative return of $100 million of earned media value.
Nextel’s integrated marketing campaign with NASCAR and its fans has been extremely valuable, bringing in average revenues 20 percent higher than the average Nextel subscriber. Nextel has seen a 400 percent increase in its customer base within the NASCAR industry.
The Integrated Experience
Attending a NASCAR event begins (and of course ends) with a chilled Budweiser. That in itself was good enough for me but the innovation at NASCAR keeps on churnin’. To enhance the fan experience Nextel and NASCAR increased the capacity of the Nextel at-track wireless network through what they call NASCOWS, portable “cell on wheels” towers that travel to every NASCAR Nextel Cup Series event. This service improvement resulted in more than 500,000 customers using their Nextel phones at-track a total of 50 million times, through cellular calls, Nextel Direct Connect, the instant nationwide push to talk walkie-service and wireless data uses. Ka-ching!!
So the avid fans have their Nextel NASCAR phones and they are dialing like caffeine induced accountants. But then there’s the FanScan. This is a service that provides access to in-car audio of drivers and teams talking during the race. With a Nextel headset and scanner tuned to a favorite driver, a listener can feel like a member of the pit crew.
Not only is it possible to utilize this service trackside with a Nextel headset, live audio feeds are available via home PC, demonstrating that NASCAR knows how to extend the racing experience far beyond the black top oval. Let’s see, NASCAR has found a way to integrate fans, drivers, and pit crews through headsets, cell phones, scanners and even PCs. Damn, most of us are still trying to figure out how to integrate the call center with the branch!
GonzoBankers, chuckle all you want at NASCAR and its fans (I still do), but I must say I have gained a newfound respect for this phenomenon called NASCAR. This juggernaut that was once written off by anyone not living in the Deep South is a prime example of just how powerful creativity, innovation, marketing and, most importantly, building customer loyalty can be.
The Sun Sets in the Desert
With the PIR Subway 500 approaching the 312th lap (end of the race) and our bellies chock-full of nutritious beverages it was only appropriate that the GonzoBankers paid tribute to the NASCAR fanatics:
So intrigued were we by the sheer number of loyal fans, not to mention the amount of beer sold, the merchandising opportunities and the money the NASCAR sponsors are making, Gonzo Corporate decided to get in on the action. Drum roll please. Gonzo loyalists, today we unveil what is sure to be the 2006 Daytona 500 winner:
Jeff Gordon (#24) and the rest of the pretty boys best get ready ‘cause with Steve “Days of Thunder” Williams behind the wheel you won’t need your rearview mirror to know where we are.
Although we don’t have an engine, a pit crew or money for gasoline our hope will not be diminished. Bankers, start your engines. Hopefully we’ll see you at the races.
-tj
“We got owners, favorite drivers… an’ we got rookies, advertisers, like, uh, let’s see, Gillette, Kelloggs, Viagra, and, uh, Budweiser. No caviar. It’s beer and Mopar. Vroom, vroom, I love NASCAR.”
–Cletus T. Judd