CYCLE – The Business of Racing: Dealership Involvement
March 16, 2005
Filed under Features
Editor’s Note: This is the second in a three-part series on the Business of Racing. Here, we explore the role dealers play in supercross and motocross racing.
It’s safe to say that nearly all of today’s professional off-road riders started out in the amateur ranks at the local level. Community motocross tracks are the ideal training ground for first time and up-and coming-riders to hone their skills. Kids as young as four and five are competing in the pee-wee class. This is where future motocross and supercross stars are born.
Keeping the local motocross scene alive and healthy is vital for the continued success of professional off-road racing. Dealer participation is key to keeping the wheels turning. The payoff for a dealer can be beneficial says Kerry Graeber, the director of communications for AMA Pro Racing. “There are tremendous opportunities for dealers to be involved with racing. At every level, particularly amateur racing, riders purchase products to support their involvement with racing and they frequently end up relying on a specific dealer.”
The question for a dealer is whether or not to get involved by sponsoring a team, a racer, or a race. What are the benefits? How will it affect the bottom line? “We felt that the local track provided an opportunity to do some grassroots marketing,” says Kirby Mullins, owner of Seminole Powersports, a 22-year-old dealership in Longwood, Florida, just outside of Orlando. Mullins describes the scene at the three local tracks in his area as an exciting place during race weekends. “It’s great exposure for us.”
Three years ago, Seminole Powersports started getting involved in the local motocross and ATV racing scene. The dealership has three levels of sponsorships for its motocross riders. Level one is for a rider just starting out who shows some potential. That level provides a discount on a new motorcycle and a discount on parts and accessories. Level two is for a rider who is a little faster and more experienced and provides for a bigger discount on a bike and parts and accessories. Level three is the top level, and while riders are not fully sponsored by Seminole Powersports, they do get use of two new motorcycles every six months and close to dealer cost on all parts and accessories. The dealership also provides trackside support, trailers, banners, jerseys and hats with dealership logos. “Once we show up at the race track it’s like we’ve created a little village,” describes Mullins on the truck and trailer pit setup his shop provides for his racers.
Right now the dealership sponsors seven level three motocross riders.
Seminole Powersports has several staff members who spend part of their day working on race efforts with one person devoting nearly one-third of his time on team support and marketing. “We’ve got a fulltime race support team,” says Mullins. “We expect phone calls (from the riders) every week on how they did.”
At this point, Mullins only supports his riders with product, no money. He says the dealership is considering a contingency program much like the manufacturers provide for their riders.
At least a dozen motorcycles a year going out the door free, parts and accessories sold at dealer cost… one might ask what’s the payoff at that level? “Number one,” Mullins explains, “when the bike comes back it’s typically pre-sold. There are riders coming up behind our riders looking to buy at a discount, so we really don’t have an issue with inventory. In fact, this helps us dispose of some inventory on the retail side that would be considered distressed merchandise.”
More important is the main reason dealerships get involved in racing, and that is name recognition. “What we have gotten more over is that word-of-mouth recognition, people saying ‘we see you guys everywhere,’” Mullis explains. “We are at all the tracks, all the races. If we’re not at a track people are wondering why.”
He admits it’s difficult to monitor if the buzz surrounding his shop has actually increased floor traffic, but what he does know is that at least 22 percent of people walking through the door are referrals. His sales team does a good job of “sourcing customers,” finding out what brought them into the dealership. “If 22 percent of my business went away, that would be significant.”
Payback to the community is also part of the reason Mullins feels it’s important to be involved with racing. “The community has been good to us. This is our way of giving back just a little bit. It may help that one person who may not be able to race without this kind of support.”
Support like that can breed better riders. “If they weren’t supporting me, I probably wouldn’t be riding as much,” says Chris Kasavage, one of the top motocross racers in the Orlando area competing in the 125A and 250A motocross classes. The 19-year-old was recruited to ride on a level three sponsorship for Seminole Powersports in late 2003. For the past 15 years, his parents supported him. “My performance has increased a whole lot since the dealership started supporting me. I’m set up with fresh equipment so everything is so much easier.”
The benefits to a local rider like Kasavage are obvious. “It just makes me feel good when I’m coming up to the line and I’ve got people behind me. It makes everything run smoother. I have less work to do during the week; more time to practice. I just have to line up and race.”
Mullins’ hope for his riders is that they qualify for an amateur national competition like Loretta Lynn’s and move on to the professional ranks. Once a racer moves on to that level, Mullins says, there’s not much in it for his dealership anymore. “We concentrate on the local circuit. Somebody who’s riding the Texas circuit or the California circuit is not much benefit to us.”
YAMAHA OF TROY
It is a benefit, though, for a dealership like Yamaha of Troy. In 1992, the three partners in the multi-bike line Dayton, Ohio-based dealership started sponsoring racers. “At the time we had a mail order company. We started a race team to promote that part of the business,” says Scott Paul, president of Yamaha of Troy. Having a business like mail order with a customer base all over the country obviously benefits from the exposure that sponsoring a rider on a national or regional circuit would provide.
The first rider to gain support from Yamaha of Troy in 1992 was Todd DeHoop, a one-time 125cc Regional Supercross Champion. That was the start of Troy Racing. The next year, Johnny Omara and Erik Kehoe were added to its ranks. Honda jumped on board and provided a level of support in the mid 1990s creating what eventually would be known as a factory-supported satellite team. After Honda’s support of Troy Racing decreased, the dealership was left to provide the bulk of its support. In 1998, Yamaha jumped on board with an official factory sponsorship of Troy Racing’s 125 team. “Our results were really good. Our team was professional. We had an image they were looking for,” says Paul of the Yamaha deal.
The Yamaha-supported supercross team now consists of two riders on the east coast and two riders on the west coast. “Our budget for our race teams is more than $2 million,” reveals Paul. He does admit that there have been times when the owners had to lay out money from their own pockets in the early years. “Its really an up an down process.”
Troy Racing is now one of the most well known 125cc professional supercross teams in the country. “Our program is to find the up-and-coming young riders,” explains Paul. The shop sponsored Australian Chad Reed his first year in national competition. “We were the ones who brought him here. He rode in our program for a year, won a championship in 2002 then signed on with Yamaha. That’s our goal. Get them good enough to have them step up to the 250 class.”
All this national exposure and competition has paid off for Yamaha of Troy. The mail-order portion of the company is a multi-million dollar business and Paul says, “Hopefully, the expertise of Yamaha and knowing what works and what doesn’t on the bikes gives us an edge over the competition. Hopefully our name is well recognized and people want to buy products from us.”
Whether or not a dealership has something to sell on the national level, name recognition of a dealership at any level can’t hurt. A local rider who makes it to the big-time can certainly help create that buzz. “Many dealers benefit from the affiliation of a successful rider who can help generate awareness for the dealership,” says Graeber of the AMA. “Travis Pastrana, one of the biggest names in motorcycle racing, has been affiliated with Cernic’s [of Pennsylvania] for essentially his entire career and I would say that relationship has benefited both of them.”
Both Paul and Mullins caution any dealer thinking of getting into the sponsorship business to take a long hard look at how they want to grow the dealership and if marketing to a racing crowd will bring in the kind of customers they want. Once they decide that, they say it’s a big commitment. “You’re either in the business or you’re out of it,” Mullins advises. “It’s a fulltime job, but well worth it.”
On the professional level at which Yamaha of Troy is involved, Paul says, “The sport is a lot different now than it was 12 years ago when we started. Rider salaries have gone through the roof. Obviously to find the talent takes a lot of money. It would be relatively risky to get into a full-on race team like we have.”
Dealers can still be involved and benefit from a national race without actually sponsoring a rider. Graeber suggests, “Dealers can drive floor traffic and awareness by tying into a pro race in their area. Ticket sales, appearances by factory-sponsored riders and advertising in conjunction with a specific event are just a few ways to use racing to grow a business.”
For the dealer who wants to jump in and start sponsoring local riders Paul says, “There’s a lot of talent out there if you can find the local kid who someday is going to make the break into the national scene and do well. Supporting him with loyalty will hopefully trickle down.”
– Genevieve Schmitt