B2B Return: Why Business-to-Business Sponsors Count Revenue, Not Fans

Most racers pitch sponsorship as a consumer play: fans see the car, fans buy the product. Some of the most stable money in motorsports works a different way. The sponsor's real customers are other businesses, like the team itself, the other sponsors on the car, the suppliers in the paddock, and the dealers and fleets that buy in bulk. The fans matter, but the return gets counted in invoices between companies.

Business-to-business ROI is also among the easiest sponsorship returns to measure, because a business deal has a name, a date and a dollar figure attached. The sponsors who work this way told my Sponsorship Summits what they count, and they were just as clear about how long it takes.

The paint scheme isn't what the sponsor bought

David Morton, senior vice president at Fifth Third Bank, described a NASCAR partnership in terms most racers would recognize: the bank pays, and it gets its paint scheme on the car for a set number of races plus social media through the team's reach. Then he explained why that isn't the point. "For us that's important, but it's not the driver of ultimately the return on our investment," he said. "It's that measuring the business relationships that we gain that the team provides access to."

The first relationship Fifth Third looks at is the team itself. "We expect to become their primary bank, and that can be providing lending services, that can be treasury management, cash management services, credit cards, all the things it might take to run a team," Morton said. Next comes ownership: is the team "owned by a person that has another business that we would be able to provide banking services for?"

Then he gave the target. "We're looking at basically a three to five return on the dollars that we invested and the revenue we get back," Morton said. "So if we invest $1, we expect to get three to five dollars back in revenue." As much of that as possible should come directly from the team and its owners, and "the rest of it comes from who that team can introduce us to and help us get business that we wouldn't have" gotten otherwise. ▶ Watch David Morton explain the math

Plan on three years

That revenue doesn't arrive in one season, and Morton warned both sides against pretending it will. "We tend to look at them in three-year increments. I'm a big believer in not doing a partnership with a team that's just one year at a time," he said. "I think that it's got to be a two-way commitment, and it takes time to get the return on the investment. Any team that tells you that they can get you return on investment in one year is not telling you the truth, and any sponsor that thinks that they can get the return in one year doesn't know what they're talking about." ▶ See the full answer

The reason is how business development works. A team introduces the bank to a supplier. The banker builds a relationship. Months later the supplier's credit line comes up for renewal and moves. A racer who pitches a B2B sponsor on a one-year deal and promises immediate results is telling a sophisticated buyer that he doesn't understand how the buyer makes money.

Be additive, and pick a sponsor nobody else has

When Fifth Third considers a new team, Morton asks one question: how is this team different from the partners the bank already has? "How can you be additive to what we're already doing? What new business can you bring us that we won't get through our existing partnerships?" he said. The bank's targets fall into clear groups: other teams in the series, the tracks, the other corporate sponsors, and the suppliers to the sport. ▶ Watch David Morton on new partnerships

So when you pitch a B2B sponsor, show what's around your program that the sponsor can't reach now: a different series, a different region, a different set of co-sponsors, a supplier you know personally.

Morton also explained why a bank went into racing at all. "What we really liked about racing is that nobody else was doing it. There weren't any other banks doing it," he said. "It's a wide-open market for us to be able to put a stake on the ground, differentiate ourselves from our competitors." ▶ Watch the clip For racers, the lesson is that a non-endemic company with no competitors in the paddock may find more business there than an endemic brand fighting for attention.

Count the sales to the people beside you

Stanley Black & Decker works the same way on a larger scale. Tony Merritt, vice president of marketing sponsorships, listed B2B as a core part of how the company tracks its return. "We track a lot of B to B, so sales to other sponsors with the teams that we're with," he said. "So within NASCAR, whether we're selling fasteners to Toyota, Ford and Chevy through our Stanley Engineered Fastening product, whether we're selling tools to the fleets at UPS and FedEx. So B to B is a big piece of our tracking that return on investment."

Customer hospitality supports those sales. "We want to be where our customers work, play and where they spend their money," Merritt said. ▶ Watch Tony Merritt on tracking B2B

The relationship with Toyota shows how it builds over time. Andre Jackson of Toyota described how Stanley Black & Decker's brands show up throughout Toyota's business, not only on shared race cars. "Our dealerships, they have the Mac Tools boxes," Jackson said. "It's been corporate as well as on the track." ▶ Watch Andre Jackson and Tony Merritt on the partnership

Toyota dealers have service departments, service departments need tools and tool chests, and two companies that met through racing end up doing business far from the track.

Racers can build these deals too

You don't need a Cup team to think this way. Ryan Arciero of 1Nine Industries, the Trophy Truck driver whose race shop hosted the Off-Road Sponsorship Summit, described how his team looks at the business behind its biggest sponsor. Terrible Herbst Motorsports' partnership with Monster Energy also helps the Herbst family's convenience stores and gas stations. "There's a lot of B2B benefits for the Herbsts with their convenience stores and gas stations," he said.

The team looks at which products sell in those stores. "They sell X amount of product. Who are the ones that we're selling? Who are the big ones we're selling? How do we figure out how to do partnerships with these guys? And then tie in our motorsports program to it as well, which, to me, creates icing on the cake," Arciero said. "At the end of the day, partners, they want to sell more product. They want to increase eyes on their brand. They want to increase their bottom line." ▶ Watch Ryan Arciero explain this

The same team also sells BFGoodrich tires through its shop. "Not only are they a partner and sponsor of ours, but we actually actively go out and sell their product as well," he said.

The takeaway

• Map the businesses around your program: your own team's vendors, co-sponsors, the track, suppliers, and any business your owners run. Those are a B2B sponsor's real targets.
• Ask a B2B prospect what return it needs and how it tracks deals that came from the program, so you know what to report.
• Pitch multi-year terms and explain why: relationships take time to turn into revenue.
• Show what you add that the sponsor's current partners don't.
• Make introductions on purpose, follow up on them, and include them in your season recap.