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Thursday, December 28, 2006

But its a 'Southern Sport' right?

We hear that comment almost every time there is a discussion about the 'old guard Nascar' and the direction the sport seems to be going. The 'old guard Nascar' wants to keep the sport 'pure' and stick to it's roots, but there are a few problems with that line of thinking and preconceived notions.

In 1990 the Wall Street analysts estimated the net value of Nascar at 1.5 billion dollars. By 2005, that same net value was estimated to be 10 billion dollars. Growth of this magnitude not a coincidence, either it means that it is right in line with the 'Nascar expansion' we have seen over the past two decades or the pure bred 'southern race fan' is moving all over the country.


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

What I see above is that the 'Nascar fan', is in almost every case, directly proportional to the region's demographic where that particular fan lives. And the criticism from the 'old guard' has been that 'Nascar is taking away race dates and venues from the region where the majority of it's fan base is located. While that is partly true, one also has to look at where Nascar is attempting (or wanting) to move to. The Northeast and the West, make up 41% of the U.S. population, and 39% of the Nascar fan base. It only makes good business sense to see empty seats at a venue (one that only holds 55K) and want to move that race to an area of the country where the market share is less saturated. Of course we still see some empty seats at the California Speedway, but that pales in comparison to Rockingham when one sees that California still has twice the fan attendance of the failed track. And to top it all off, the same 'excuses', the old guard gave for the lack of attendance at Rockingham could be used for California. (bad race date, other race dates too close in the same area, and even weather to an extent)

Not only is NASCAR expanding geographically, it is also focused on increased ethnic diversity as well. Just how can a drive to actually add to the over-all fan base be a bad thing?


1999

2003

Trend

Hispanic

3.6 percent

8.6 percent

+139 percent

African-American

4.9 percent

9.1 percent

+86 percent

Source: NASCAR

Also, more than half of NASCAR fans fall between the ages of 18 and 44 with an annual income of more than $50,000, and women account for 40 percent of the fan base. Just how many 'marketing strategies' do we see that wants to target this very audience? What began in 1948 as an exposition of Southern bravado and a weekly bootlegger contest, today trails only the NFL as the nation’s most popular sport, and the reason for that is pretty clear.

Nascar (mainly the France family) saw the long term potential of their product long before the old guard fan realised what had hit them. That potential was the 'nation wide marketability', both on and off the track. Nascar boasts that they have over 75 million fans, and over half of them are considered 'hardcore'. Talk about a marketer's dream! Nascar was and still is successful in selling the "marketer's dream" with a true customer relationship management, technology innovation and integration, and the 'power of a brand' it's fan base had become to understand.

Fortune 500 companies have been struggling for years about how to increase revenues and lower costs balanced with growing thier customer base, strengthening customer loyalty, offering best in class service, building brand identity and investing in technology to improve the customers’ experience. Nascar can get an A+ in just about everyone of those categories, something that few other companies can say.

I stated above, Nascar has been very successful in 'growing the fan base'. What I'll call the 'big three' Nascar race venues (Daytona, Indy and Dega), last year sold an average of 186,000 tickets per Cup event at an average ticket price of $75. Other well placed race venues include Texas, Phoenix and Chicago. TMS and PIR 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. Can you say 'Juan Pablo'?

One of the other visions Nascar has been most successful at is the investing in technology to improve their customers’ experience, or the integrated experience. Attending a Nascar event, gives one a chance to experience the sport like not other sport offers. From scanners, to listen to the behind the scenes workings of teams/networks, to the garage/pit access, Nascar has been in the forefront in the race day experience. To this day, I don't understand why the NFL and a few other sports do not offer the vehicle to allow fans at the stadium to listen to the coach/coordinators chat of their headsets.

But Nascar has not stopped there, they have also tapped into the greatness of the home PC and the Internet, by making it possible to listen to the same scanner chat via 'TrackPass'. PitCommand offers a bird's eye view of all 43 cars via the Internet, as is a great companion to watching the race's network coverage. Let’s see, NASCAR has found a way to integrate fans, drivers, and pit crews through headsets, cell phones, scanners and even PCs.

The old guard to this day criticises Nascar for turning their sport from a 'regional spectacle' to a 'national phenomenon'. A year or so of declining TeVee ratings of this juggernaut doesn't even come close to what the old guard claims to be 'signs of failure', compared to the two plus decades of growth the sport has enjoyed. But I guess if the 'old guard' gets their way in the end, they would rather see their sport in old antiquated venues that refuse to upgrade, have their races televised on some obscure cable network, have their race teams become so underfunded due to limited sponsorship exposure, and have an over perception of limited growth potential.


2 comments:

Gvav1 said...

I love the stats...quite eye opening!

Sounds like the "old guard" has just enjoyed too much moonshine to think straight. Vroom...

Snafam said...

Every other Amercian based motorsports competition would LOVE to have even a small portion of the success of NASCAR.