SBJ/September 11 - 17, 2006/This Weeks News

DeWalt tools with NASCAR sponsorship model

The power tool maker recently extended its
deal to sponsor Matt Kenseth’s race car.
With NASCAR’s Chase for the Nextel Cup beginning this week, DeWalt is riding more than a wave of momentum with Matt Kenseth’s streaking No. 17 car. The power tool maker, which has been the primary sponsor on Kenseth’s Cup car the past seven seasons, is complementing its on-track success by forging a unique sponsorship model that defrays costs while attracting industry-related partners.

DeWalt’s considerable equity in Kenseth, whose team is owned by Roush Racing, contributed recently to a new three-year deal that will keep the familiar black and yellow colors wrapped around the No. 17 car through 2009, according to Jon Howland, DeWalt’s director of marketing. Terms were not disclosed, but it’s believed to be worth nearly $20 million annually.

What makes DeWalt’s sponsorship unique, though, is that it buys more than just a designated space on the hood. The deal gives DeWalt all of the sponsorship space on the car. Howland, in turn, takes responsibility for selling the associate sponsorships, some of which include primary sponsorship for select races.

An associate sponsorship normally runs in the low-to-mid six figures, but a package that includes up to three primary spots a year — what’s known as “paint-outs” — can cost $1 million a year. Three of DeWalt’s associates have invested in those.

While it’s not completely rare for a sponsor to buy the entire car and sell off pieces, DeWalt has succeeded with another unique concept: It keeps the partners specific to its biggest customer base, the professionals at the construction job site. DeWalt and its associates market primarily to professionals, who account for more than two-thirds of tool sales in the U.S.

“It’s about marketing your product to a very targeted user,” Howland said. “It’s a very conjoined message. … We want to own the job site.”

Roush has used this model with other teams, but few sponsors have orchestrated a lineup of partners the way DeWalt has. GE Sealants and Carhartt industrial clothing joined the team in 2003, while USG Sheetrock came on board in 2004. R+L Carriers and Rinnai Corp., a maker of water heaters, rounded out the team this year.

“DeWalt has a strong interest among installers and contractors, and so do we,” said Ervin Cash, Rinnai’s senior vice president of business development. “We depend on installers to put our product in. DeWalt seems to have one of the best strategies for using a sponsorship to engage the audience.”

Some companies were targeted by Howland, while others were leads from Roush, but they all brought a certain synergy to the sponsorship. The sponsors are teaming up for a fall promotion that launches this week. “Matt’s In, You Win,” a play on Kenseth’s berth in the Chase, is an online sweepstakes at DeWalt.com that will offer tool-type giveaways during each of the Chase’s 10 weeks.

“Pretty smart, to the extent that there are co-marketing opportunities, as well as some B2B,” said Mike Bartelli, senior vice president of motorsports at marketing agency Millsport, which made Kenseth a member of Team Tylenol. “Their industry-specific model makes a ton of sense.”

In addition to combining efforts for promotions, such as “Win Matt’s Garage,” which awarded a consumer a garage full of tools and other goodies (all of which was delivered by R+L Carriers, of course), they’re working together at the track.

DeWalt’s Rolling Thunder is an 18-wheeler that unfolds into a 100-by-100-foot platform where visitors can use a DeWalt screw gun to hang USG sheetrock. The sponsors take advantage of hospitality at the track to entertain contractors and others who don’t usually use their products.

DeWalt also has earned acclaim for its yellow trucks that visit construction sites so that workers can test tools. That provided an opportunity for Gatorade, a longtime Roush partner, to work with DeWalt at job sites.

“Gatorade has been a partner of Matt’s from the very beginning and even they’re going to job sites now to stress the importance of hydration,” said John Miller, Roush’s vice president of sponsor marketing.

DeWalt President Bruce Brooks gives the sponsorship significant credit for the company’s rapid growth. Sales annually top $1 billion, and Fortune magazine last year recognized it as one of the 10 brands that improved the most from 2001 to 2004. DeWalt now commands a 35 percent share of the professional-tool market.

Kenseth’s consistently high performance is integral to that sponsorship, Howland said. Kenseth, NASCAR’s 2003 Cup champion, is assured of a spot in Chase for the third straight year. Only Jimmie Johnson and his sponsor, Lowe’s, could say the same going into last weekend’s Rock & Roll 400 in Richmond, Va.

“When the contractor goes for a DeWalt tool, it’s expected to perform to a high standard,” Howland said. “So it’s important for us to have a chance to win [at the track]. We’re not going to be associated with a B-level team.”

DeWalt takes responsibility for selling
associate sponsorships for the race team.
With the rising cost of sponsoring a Nextel Cup car, more primary sponsors are selling off races to an associate. It works for DeWalt because it already has built up significant equity in the No. 17 car, so the tool maker can share Kenseth without losing the connection to the car, Bartelli said.

DeWalt will keep its familiar yellow and black colors on the car for 27 of the 36 races this season, while the other nine will go to associates. During the 10-race Chase, the No. 17 car will sport an R+L Carriers paint scheme at Martinsville and a USG Sheetrock scheme at Phoenix, and Carhartt will be featured in Charlotte. DeWalt will keep the other seven races.

“I get asked if we can’t afford a full-year sponsorship, but I’m not sure that we need 36 races to send our message,” Howland said. “Can associate sponsors afford a full year? Maybe not. But they can get into the sport for a fraction of the cost and make it appear to be a primary.”

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