NASCAR, 5-Hour Energy good match
On a sunny Sunday afternoon last November in the Arizona desert, Clint Bowyer parked his mangled race car on the pit lane at Phoenix International Raceway. He'd been intentionally wrecked by Jeff Gordon, and was already fuming when he looked up at the JumboTron and saw his team scuffling with Gordon's in the garage.
Instinctively he took off. Dead sprint to the scene. Target: Gordon.
He was livid.
His sponsor was elated.
"It was the best commercial for us I've ever seen," Rise Meguiar, 5-Hour Energy vice president of sales, said with a laugh. "The company loved it. We played it over and over and over again. We even put it on our website. There were some YouTube things that fans did with it, too. We just loved it."
Meguiar said 5-Hour enjoys its presence in NASCAR as sponsor of Bowyer's No. 15 Toyota. Naturally the company invested in the sport to move product. Meguiar says that strategy has worked "incrementally." One big reason, she said, is mainstream commercial credibility.
"I know that when we moved up to Sprint Cup, everybody looked at 5-Hour different," Meguiar said. "Even when we went to Nationwide, it's a respected brand at that point to the customer.
"Scott Henderson, the president of our company, said look around at who plays on that field and those are very credible companies, and we want to be known as that. We are that. We're a very credible company.
"There's reputations out there with energy drinks, and we get lumped into it unfortunately. That's not who we are. We want to show our customer we are a credible company, we are a Fortune 500 company. And here we are in NASCAR."
She said 5-Hour uses its NASCAR program to increase purchases from retailers, obtain better display space and build stronger relationships with retail buyers.
Michael Waltrip Racing sources explain that 5-Hour awards the trunk area (deck lid) and rear end (television panel) to a retailer that meets stated goals for a predetermined period of time leading into a NASCAR event. The sales team reaches out to retailers on a local level -- NASCAR is consumed nationally on television, but activated locally -- and the most active earn the spot on the car.
The 2012 season included more than 30 retail partners, including convenience store chains like 7-Eleven and Circle K, pharmacy/drugstores like Walgreens and traditional grocery stores like Kroger and Publix. Those are in addition to Wal-Mart, which 5-Hour gained through the NASCAR/Wal-Mart "Race Day" program.
Each time a retailer's logo was on Bowyer's No. 15 car, it represented $100,000 to $1,000,000 in incremental purchases from 5-Hour Energy, according to MWR's marketing team. The NASCAR program also drove sales of 5-Hour's Pink Lemonade flavor. Bowyer's cars in October carried the pink lemonade paint scheme, which helped 5-Hour sell more than 8 million bottles of the new flavor during the promotional time frame.
5-Hour began its NASCAR relationship with Rusty Wallace Racing in 2008, in an attempt to gain media exposure with a new audience. It worked well to a certain point. But in 2011 it was time to move up to the highest level with the most exposure.
"It was time to go play with the big boys, with the McDonald's and the Lowe's and the Home Depots of the world," Meguiar said. "We wanted to expand the credibility."
Meguiar said 5-Hour's NASCAR relationship has been profitable, and new retailers continue to consistently engage in the program. In 2012, she said, it was difficult for 5-Hour to sell retailers on purchasing advertising space on the TV panel and the deck lid. This year, Meguiar said, there are more customers lobbying for that space than there is space to offer.
The original sponsorship agreement between 5-Hour and MWR, signed late in 2011, called for 24 events in 2012, Meguiar said. But when MWR offered the opportunity last April to expand that commitment, 5-Hour agreed to a 35-race sponsorship in the effort to solidify Bowyer as the face of the brand.
In doing so the company learned key markets that worked best for its business. So this year, the company placed its emphasis on those 24 markets. Most were major metropolitan areas and markets that included retailers in the marketplace, including Daytona Beach, Fla., Sonoma, Calif., Fort Worth, Texas, and Loudon, N.H. 5-Hour has no plans to expand past 24 races in 2013, which leaves MWR with 14 races to fill with sponsorship on the No. 15.
"We don't really do percentages. We can just tell you that what we spend on NASCAR we definitely get back in return. We get ROI [return on investment]," Meguiar said. "As our owner would say, it's a no-brainer. It's a slam dunk. When we tried it in Sprint Cup it was, so we stayed in it.
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"We're comfortable where we are [with 24 races]. Some markets don't work as well as others. Some, we either couldn't get customers to attend hospitality, or couldn't sell enough product to pay for the race itself."
5-Hour tried other sports platforms, including the NFL. But NASCAR and golf offer something football can't: direct marketing to consumers, and for retailers.
"It's media exposure on TV. When you see your logo going around the racetrack, that's enticing. That's a commercial. They're on TV," Meguiar said. "And we can sell against it. We've put Clint Bowyer displays in the stores and it's incremental sales for us."
That's why picking the right driver is so important, she continued. He or she must project the company message without concern for damaging screwups. Bowyer was perfect for 5-Hour. Meguiar was a NASCAR consumer long before the company entered the industry fray. She said she watched Bowyer ascend through the ranks, and after interviewing several drivers and teams, Bowyer, she said, was an obvious choice.
"He takes the product. He believes in the product. He's got the personality that people really appreciate and enjoy," Meguiar said. "That's very big to us. We need somebody that has the personality that works within our company and our customers. That really expanded our sales base with our retailers. Clint brought a lot to the party."
Bowyer confirmed it's a great fit for him, too.
"For me it works because the sponsor fits so much of my life," Bowyer said. "It's wide open all the time, and in doing so, every now and then I need some help. My fans directly run into the same problem going through their daily lives. I've learned a lot during my career about business from being with corporate sponsors. The thing about 5-Hour is that their product works without any gimmicks."
Ultimately it's about selling bottles. Nothing more. Nothing less. Every program the company undertakes is based on sales.
"We're able to sell a whole lot more bottles in Sprint Cup," Meguiar said. "The excitement level definitely rose, because there's more viewership and more recognition, and people recognize more drivers. There's more attention. We have more attendance on a Sprint Cup day than we ever had on Nationwide, from a retailer standpoint."
That was the key reason behind the move to MWR, and a relationship Meguiar said is a true partnership.
"The contract was signed and we never looked back," she said. "If I ask for something, they don't go look in the contract to see if it's there. Michael [Waltrip] and Clint both, if I need them at a retailer or at a golf outing or to go to a presentation, they're there. It's never about the contract. It's about the sponsorship and the partnership. That's been very refreshing."
Bowyer said that's the way working with MWR is supposed to work.
"The reason Michael Waltrip Racing is still in business is Michael's willingness to go above and beyond for his sponsors, his commitment and enthusiasm," Bowyer said. "I try to do those same things -- keep it lighthearted and fun and entertaining. Our sponsors bring a lot of clients to the racetrack. It's our job to make sure they're engaged and entertained."