Imagine you have a large, passionate, loyal customer base. They love what you do.
But in order to keep growing, you need to find ways to attract new customers--and to find ways to turn casual customers into loyal customers.
Maintaining that delicate balance between satisfying loyal customers while introducing changes that attract new customers? That challenge can keep the leaders of almost every established business up at night.
But not Nascar president Steve Phelps.
Over the past two years, the sport has attracted new owners like Michael Jordan, Pitbull, Emmitt Smith, and Floyd Mayweather. It has added five first-time tracks to the Cup Series schedule last year and two more this year. It has introduced the Next Gen race car, a move intended to improve racing, cut costs for team owners, and align race car body styling more closely with street car styling.
To Phelps, pleasing long-term fans while attracting new fans isn't a challenge at all.
"In a lot of businesses," Phelps says, "you can do one or the other, but it's hard to do both. The good news for us is that achieving the balance you describe is easy. Existing fans and new fans just want a great experience. They all want great racing. Whether it's the drivers, the story lines, introducing the Next Gen car, making the styling more relevant for our OEM partners ... it all still comes down to the racing itself."
In short, it's what Jeff Bezos would call building a business strategy around things that won't change. As Bezos says, "It's impossible to imagine a future 10 years from now where a customer comes up and says, 'I love Amazon, I just wish the prices were a little higher.' Or, 'I love Amazon, I just wish you'd deliver a little more slowly.'"
The numbers bear out that approach. Unlike an established sport like Major League Baseball, where the average fan is 57 years old, Nascar's fan base is slowly but steadily skewing younger. Digital engagement hit record levels in 2021, and TV household share improved for the third year in a row. Tickets for this Sunday's Daytona 500 sold out over a month ago.
That growth gave Nascar the confidence to take a big swing: Holding the Busch Light Clash, the sport's annual season-opening exhibition race, on a temporary track built inside the LA Coliseum. Over 50,000 fans attended, 70 percent of whom had never previously been to a Nascar race. TV ratings for the event were the highest they have been since 2016.
"As a sport, we're trying to be bold and innovative," Phelps says. "We were the first sport to return to action, and then the first with fans, in the Covid world. Banning the Confederate flag at our racetracks, and the broader stance we took on social justice. Last year's schedule was bold. Bold is what our fans now expect."
Many of those changes have also pleased a small but vocal, and highly influential, constituent base: Nascar teams, especially drivers. To them, the sport is purely about competition. To fans, racing is essentially entertainment.
That dichotomy can result in a natural conflict between sport and entertainment.
"Publicly, our drivers are pretty good about not being negative," Phelps laughs. "But you can tell when they're genuinely enthusiastic, and they seem to love this race car. Drivers just want a raceable car, one that puts the outcome in their hands. They want their talent to shine through. And so do the fans."
Much as Southwest Airlines founder Herb Kelleher filtered every decision through the lens of one question--"Will this help make Southwest be the low-cost provider?"--Phelps uses fans as his lens, seeking to build that base by focusing on every stage on the casual-to-avid fan continuum.
"The surest way to 'lose' people," Phelps says, "is to stay the same. We have to keep moving forward. Embracing change--being bold and innovative at every turn--has to be our only constant."
That's true for any business.