Apr 20, 2011 at 02:48 PM
written by

Sponsorship Strategy At The Shack

Usually Wednesday's are reserved for Ahead of the Curve member profiles, but this week we're changing it up. Rather than an interview, we're going to share a critique on what one SponsorPitch member found wrong with a sponsor / sponsorship he's been researching. We are going to keep it anonymous at the member’s request, but feel free to provide your take in comments.

I was sitting at home a couple of Sundays ago, flipping through the channels when something came on I don't normally see on TV in April - professional cycling. Maybe it was the lack of anything else of interest on the tube or the two-wheel battle taking place on dirt-filled cobblestone roads, but I decided to stay on Versus. I'll be the first to say, I'm not so much of a cycling fan. I have friends in the Bay Area that love cycling like I love baseball, but I'd put myself in the category of the average American's cycling knowledge - Tour de France & Lance Armstrong.

What really started to pique my interest was seeing the team names were actually those of the title sponsor. It was much more than just a jersey sponsor (example: Real Madrid having the shirt sponsor bwin, but always being known as Real Madrid). So if you watch cycling, you'll most likely hear: Team QuickStep (Belgium), Team Movistar (Spanish Telecommunications), Team Rabobank (Dutch based bank with international presence). When the team's title sponsor changes so does the team name, regardless if the management and owners remain the same. In a sport that doesn't have ticket sales, concessions or parking revenue, etc, the sponsors provide the large majority of funding and therefore get the branding and name recognition.

Ok - so where am I going with this all? Being a "sponsor guy" I started taking note of all the various team names/title sponsors. Many are of European origin that I’ve never heard of before (Liquigas from Italy?). But then came one that many Americans will be familiar with - RadioShack. I knew Lance raced for RadioShack prior to his second retirement earlier this year, but it wasn't until I was sitting on my couch that I really gave it some serious thought. And to be honest, one thought kept creeping back into my mind - "huh?"

While cycling is a global sport - international riders, international races - its presence is most heavily in Europe. The only race that the average American knows of is that three-week race in France. There's a Tour of California, which is the biggest and most popular U.S. race, but that really doesn't get any recognition outside of California and certainly not with the greater American public. What really has me confused is that RadioShack is an American based company with American retail stores and no presence or intentions (at least that I’m aware) to go global or at the very least expand into the European market. Sponsorship reports indicate RadioShack is paying approximately $15 million annually for the rights to the team. These are rights to a team that primarily competes and is covered in Europe (very little coverage in the US). That means for the most part, RadioShack isn't even "talking" to their current or potential customers and consumers.

I called a couple of buddies of mine who live in Lance’s hometown of Austin and are big cyclists. Lance has a bike shop there and they’ve mentioned to me before that they hear a lot from just being part of the local cycling community. Some interesting tidbits from my conversation:

  • RadioShack’s CMO is a HUGE Lance and cycling fan and has been enamored by the "superstar" experience and privileges that come with being the title sponsor of Lance's team. If you look at his twitter page (@leeapplbaum), that statement is strongly supported. This seems to be an example of a decision maker's personal interests put ahead of business interests, something I have frequently encountered in my experience. When will this stop? Probably never, but let’s hope that these decisions and investments come with accountability.

  • Along the same lines, my sources told me they went to the University of Texas with some people who now work at RadioShack's corporate headquarters in Fort Worth. Sounds like the majority of the corporate employees haven’t really rallied behind the cycling team, thus doing very little for morale or attracting new talent. I took it upon myself to go into a couple of RadioShack stores in the Bay Area to see what the consumer facing employees thought of the team. I asked a couple questions:

    Me: How's the team doing this year?

    Employees: "Oh yea, good"; "I think pretty good"; and my favorite: "What team?"

    Me: Who do you think will win the Tour de France this year?

    Every answer: "Lance Armstrong"

    Me: Sorry to break it to you Team RadioShack employees, but Lance is retired!!

    To sum that all up: #FAIL or #NOTWINNING

    This was the first time in a very long time I had been in a RadioShack store. Very little has changed since my last visit. Based on their marketing campaigns and re-branding themselves as "The Shack,” I was expecting a new, revamped, hipper store. But nope, it was same old same old. Not exactly sophisticated and an underwhelming selection of products.

    What's even funnier (or sad) is that I came across this picture on the internet of Lance Armstrong and his teammates wearing a jersey with a retro RadioShack logo. So one day you want to be called the new, hip "The Shack" and the next day you're putting out a logo that portrays the days when RadioShack actually sold radios! Strategy?!?!?

    Thanks to his victory against cancer, winning 7 consecutive Tours de France and the internationally known LIVESTRONG brand, Lance Armstrong is arguably one of the most well recognized & influential athletes in the world. Unfortunately, RadioShack was not even able to capitalize on this! A study by Ace Metrix ranked RadioShack's use of Lance Armstrong in their ads as the 2nd least effective commercial campaign in 2010.

    In my very short research/discovery, I wanted to know if RadioShack or any of its partners are doing anything to help the team and fans from a technological perspective (i.e. an authentic sponsorship fit where the brand can actually tell a story about how it contributes to the team’s success and/or makes the fan experience better). I lean on my cycling friends both in Austin and the Bay Area. Their answer: nothing that they've noticed or been aware of (and yes, they consider themselves pretty big fans). The website (which in my opinion is pretty inadequate from both a fan and technological analysis) http://teamradioshack.com seems to back this up. It looks as if the team took the “easy road” and made it a microsite of http://LIVESTRONG.com, leaving them with limited capabilities for team customization.

    Without knowing how the sponsorship was actually sold, the evidence seems to suggest this is a scenario that involves a CMO who is a big Lance and cycling fan and saw potential for large media exposure (eyeballs), even though the majority of these eyeballs are outside of the US/RadioShack's market. Unfortunately, brand and business strategy appear to have been neglected.

    This is just one of countless examples that supports the need for sponsorship experts (not brand marketers) to guide the strategy of brands as they invest in sport & entertainment to drive brand and business objectives. Creating deep & meaningful relationships with key customers and consumers with sponsorship property assets requires a specific understanding of and skill for executing sponsorships. It isn’t all about eyeballs and exposure. Until decision makers and companies realize this, we will continue to see poor results from sponsorship investments. Brands will be damaged and/or see no impact from sponsorship, and our jobs as sponsorship sales professionals will only get more difficult.

    On a side note, I do want to praise RadioShack for their involvement with in the fight against cancer. To this date, they have contributed millions of dollars to LIVESTRONG. I tip my cap to any company that contributes to the welfare of society via CSR programs.

    The opinions expressed herein do not necessarily represent those of the publisher, SponsorPitch, LLC.

    #opinionstag photo credit