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THE TURNAROUND
Old School Meets New School in NASCAR
Aired April 16, 2005 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: ... Sarah Michelle Lunde. Lunde has been missing for nearly a week. Police are questioning a convicted sex offender who was allegedly at Lunde's home on the day she disappeared. He is in custody on unrelated charges.
The FDA calls some ads for the popular drugs Levitra and Zurtac misleading. The agency says its notified manufacturers Bayer and Pfizer that their ads make unsubstantiated claims and need to be pulled. The FDA also told Bayer, maker of Levitra, that it failed to disclose proper product information and FDA warnings.
The official mourning period following the funeral of Pope John Paul II ends today. Cardinals destroy the pope's ring and lead seal, signifying the end of his reign. They also had a final meeting ahead of their conclave. Monday, they'll begin the process of selecting a new pope.
More news in 30 minutes, "THE TURNAROUND" with Ali Velshi begins right now.
(BEGIN VIDEO CLIP)
ALI VELSHI, HOST: Next on THE TURNAROUND, old school meets new school in the high octane world of NASCAR.
RANDY BAKER, PRESIDENT, SPEEDTECH AUTO RACING SCHOOL: To be honest with you, we're a marketing company that happens to race cars.
VELSHI: Can NASCAR's hot ticket win over a small businessman who's clinging to his traditional ways?
R. BAKER: We had a way that we've been doing schools for 25 years and it seemed to work before.
VELSHI: Two racing generations meet head on.
ROBBY GORDON, OWNER/DRIVER, ROBBY GORDON MOTORSPORTS: For him to grow his business, he's going to have to accept the marketing opportunities.
VELSHI: THE TURNAROUND begins now.
(END VIDEO CLIP)
VELSHI: I'm Ali Velshi in North Carolina at the intersection of two great American passes, fast cars and money. Here, a former driver with a long family history in NASCAR hopes that his racing school is his ticket back to the big time. What he doesn't know is that we're going to surprise him with an introduction to a member of NASCAR's new bold and entrepreneurial generation. And after three days together, our school owner is either going to spin out or be on the road to a turn around.
(BEGIN VIDEOTAPE)
R. BAKER: I would say we're top shelf in what we do.
VELSHI (voice-over): Meet Randy Baker, the man in a driver's seat of a small racing school in the town of Concord, North Carolina. He calls his school SpeedTech. He'll teach anyone, from complete novice on up to pilot an authentic race car around the track at speeds of 160 miles per hour.
R. BAKER: It's a humbling experience. For most people, they get in that thing and it's like whoa, this is more than I ever expected it to be. You know these cars are at real McCoys.
VELSHI: And Randy would know. His father, Buck, and his brother, Buddy, both made names for themselves on the old school racing circuit. Randy himself made it as far as Daytona, where a bad crash in 1986 ruined his racing career.
R. BAKER: We're on the second to the last lap; I flipped down the back stretch. I broke a bunch of ribs and broke my back, and had some contusions and things like that. So I laid out that year. And, I'm telling you, you can lay out of racing for a short time and people forget about you. You know, it's out of sight, out of mind.
VELSHI: Nearly 20 years later at age 46 while Randy runs his school, he still dreams of making a big comeback.
R. BAKER: To get me back in the race car, I'll have to do at least a million in sales, possibly bring some corporate business my way. That would be huge to me.
VELSHI: But that's a far-off goal. Right now, SpeedTech's finances are in trouble. Despite taking in close to half a million dollars last year and after drawing a modest salary for himself and his wife, Randy's business only cleared $5,000.
(on camera): What's the business struggle here?
R. BAKER: The business struggle is just keeping up with the expense of everything. Fuel costs are going up, insurance but track expenses are anywhere from -- well, it starts at $3,500 and goes to about $7,000 a day.
VELSHI: Just to lease a track?
R. BAKER: Just the track. Now, you got to have insurance.
VELSHI (voice-over): Factor in the fuel, meals for students, uniforms, transportation and keeping a staffed ambulance on site. It's easy to see how expenses add up for just one class. R. BAKER: And I love racing and love race cars but there's times when I could come to this place here and cuss at race cars because of -- you know it's just -- this is not making the money that it needs to.
VELSHI: If Randy is old school, Robby Gordon is new. A championship driver who's a fast up and comer in the world of NASCAR. He's got more than 300 race starts under his belt and this year, at just 36 years old, he's the brand new owner/driver of his own NASCAR team. Racing is all about money, and that means sponsors. There are names everywhere, plastered over cars, suits, hats, and everything else.
GORDON: Without sponsors, we're not racing.
VELSHI: He's only a few years into his NASCAR career, but Gordon has already proven his talent and business savvy by nabbing corporate sponsorships, including Paris Casino and Jim Beam. Right now, he's on his way to SpeedTech where he'll be Randy's mentor for the next three days.
Its' Day 1, 2:00, Randy waits, wondering who his turnaround guide will be and supervising repairs on these awesome machines.
VELSHI (on camera): All right, so, right foot in.
R. BAKER: That's correct.
VELSHI (voice-over): One look inside Randy's garage and a racing fan can't help but be impressed.
(on camera): Look at that, I'm like a natural.
R. BAKER: There we go.
VELSHI (voice-over): Some of SpeedTech's school cars have been raced by NASCAR's legend, including 2005 Daytona 500 winner Jeff Gordon and the late great Dale Earnhardt, Sr.
(on camera): They're stripped down. There's no creature comforts in here at all.
R. BAKER: Built for speed, not comfort.
VELSHI: Now, how do I -- do I get out with the steering wheel in?
R. BAKER: No, no.
VELSHI (voice-over): Within a few minutes, Robby Gordon walks through the door.
R. BAKER: Good gosh!
GORDON: Good gosh, trouble is in the house.
R. BAKER: What's going on?
VELSHI: John Story, the CEO of Robby Gordon Motorsports leads the way.
JOHN STORY, CEO, ROBBY GORDON MOTORSPORTS: How are you doing?
R. BAKER: Nice to meet you. How are you?
GORDON: My pleasure. Hi, Randy, how are you?
MELISSA BAKER, VICE PRESIDENT, SPEEDTECH, AUTO RACING SCHOOL: I'm Melissa Baker.
GORDON: Hi, how are you? Nice to meet you.
STORY: Hi, Melissa, John Story.
M. BAKER: Nice to meet you.
VELSHI: Robby and John have to tread carefully. They realize Randy's 25 years of racing experience outweighs theirs.
GORDON: You've been around this sport longer than I have. Obviously, your family has been around it for many, many years and I'm sure there's things that we're going to be able to learn from you as well. So, I look forward to that.
BAKER: Sure. Great.
VELSHI: But Robby and John already know they can help Randy in what they consider to be the most crucial area.
STORY: Well, I'm not sure we came over here today thinking we could help you guys with your out track experience in all but one of the things that we have been pretty good at lately is the marketing side of the business...
R. BAKER: Well, that's where I've been lacking.
STORY: ... finding the money and corporate sponsorships.
VELSHI: But Randy immediately reveals his distrust of the strange, new world where the most successful racers aren't always the fastest. They're the ones who chase down the biggest sponsorship dollars. Getting a piece of the action means getting aggressive about pushing his business.
M. BAKER: Because of his family name, you know, marketers are big to jump on us, and say, oh yes, we can do this, pay us this amount of dollars, and we're going to show you how to do this and they really haven't. It breaks my heart to see him so frustrated sometimes.
STORY: He shouldn't be afraid of marketing. There's no company in the world that operates successfully without a big and aggressive marketing campaign.
VELSHI (on camera): What are some of the things that we should put Randy to now?
STORY: Robby, obviously, is going to be certainly more interested and I'm not even qualified to think about the cars and the on-track performance, but I'd love to see what you have, if you have, brochures or presentations or some of your clients.
VELSHI: All right, let's get down to business.
(voice-over): But during the short break that follows, it becomes clear just how challenging this turnaround is going to be. Coming up...
R. BAKER: Right now, I'm still unclear of what exactly what we're going to get from it.
VELSHI: ... will this old hand at racing be willing to learn some new business tricks?
R. BAKER: I guess I had my expectations a little higher.
VELSHI: THE TURNAROUND turns complicated next.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
VELSHI (voice-over): Three thirty p.m., Day 1 of the turnaround, SpeedTech Racing School owner, Randy Baker, already appears skeptical about the new world of stock car racing, representing by his mentor, NASCAR team owner and driver, Robby Gordon.
R. BAKER: It was a little disappointing at first because I didn't know what Robby had to offer. Knowing racers and things like that, I figured he was here on a personal note to get some exposure for himself.
VELSHI: Robby is taking a quick break, which gives Randy a chance to consider his mentor and words don't come easily, but Randy's body language says it all.
R. BAKER: Where's Jeff? They all got the wrong Gordon. They got the wrong boy. If I'd had a pick, I might have thought the other Gordon, you know, Jeff Gordon showing us because he just won Daytona.
VELSHI: While Robby Gordon may not have won Daytona, he recently became one of the few NASCAR drivers to tackle the business end of racing by financing his own team.
GORDON: A lot of people look at us and say Robby Gordon Motorsports is a racing team. And yes, we're a race team, but to be honest with you, we're a marketing company that happens to race cars.
VELSHI: Robby has proven serious business savvy, already attracting more than $12 million in corporate sponsorship.
R. BAKER: I've been in the business longer. It is a challenge. Every day is a challenge. I'm not making a profit out of this right now.
VELSHI (on camera): Getting a lesson from Randy has got to be more important or more valuable than just getting a lesson from somebody who read about it.
GORDON: I agree. And that's the same thing I thought when you mentioned his name, that I was going to get to come and help him. It's like this guy is probably going to help me before the day is all said and done.
VELSHI (voice-over): Before they even sit down together, Robby and his business manager, John Story, agree that Randy has to change his old school mindset and make marketing his top priority.
STORY: I don't know that we spent much money in marketing last year either. We were able to attract a line of very good, sponsors, exceptional sponsors. Now there's ways to get it done without having to spend your last dollar.
GORDON: We might even be able to help them with a basic, little package...
STORY: Sure.
GORDON: ...once we really understand where you're at and what you're trying to do.
VELSHI: Randy may soon get a chance to test that theory, but first he has to identify potential sources of income. SpeedTech has two that are especially promising, first, corporate sponsorship, companies already spend big money to turn race cars into rolling billboards.
GORDON: Right here, you have GMAC, Pepsi, Dupont, Hopps, Super Car, Citgo, OnSite, DAYCO, you know, NAPA, Snap-on, Budweiser.
R. BAKER: I'll take -- well, I take one out of ten.
VELSHI: The second possibility, corporate clients. Fortune 500 CEOs regularly make their executives share everything from golf games to learning how to drive an armored tank together. It's called corporate team building and companies spend millions of dollars a year on it. And those same businesses are also looking for creative ways to entertain their clients.
STORY: Can you imagine Pfizer bringing in 50 doctors to entertain them at a racetrack? Instead of going to play golf, bring them into a racetrack and let them drive. It's an experience these people have never had and probably never will have again in their lives.
VELSHI: Robby and John think Randy's business could slip into the corporate niche easily by appealing to the kinds of companies that advertise on Robby's race cars.
GORDON: You could use those guys to build your business. They're already in the sport. They're already paying attention to NASCAR. They're already entertaining at most racetracks.
VELSHI: Robby and John start their sit down with Randy by looking over his promotional materials.
R. BAKER: And as you can see, we haven't spent a lot of money yet.
VELSHI: They also gather more information about the business challenges Randy is struggling with, one of the big ones, having to rent professional racetracks. In this business, the track has to be the real deal and buying land to build his own half mile concrete oval simply isn't feasible. That means spending between $3,500 to $7,000 per day to use someone else's track. For Randy, the rental is expensive. It's inconvenient and he's competing with at least five other schools in North Carolina for track time.
R. BAKER: I'm the small guy on the list so I get what's left. I kind of get crumbs. I get the crappy days of summer when it's raining in the afternoon and only get track dates at night.
VELSHI: The mentor say the solution is to market more effectively, which, in turn, will grow Randy's client list and deliver more to his bottom line. Right now, SpeedTech runs just 25 school sessions annually. That's only about 500 students a year. Each one pays between $400 and $900, depending on the course. The average annual take, nearly half a million dollars, but with the costs adding in, he's barely making enough to break even.
(on camera): How many people are we talking about? What makes a class profitable? What would you love to see on a regular basis?
R. BAKER: Fifty people a day.
VELSHI: Is that once a week? Is that...
R. BAKER: Every other week...
VELSHI: Every other week.
R. BAKER: ...of three days of 50 people, which would be 150 people per weekend.
VELSHI (voice-over): It's an optimistic target. It's one to strive for in the coming years. But to get to that point, Randy's got to work on his image.
STORY: This is an image-based sport. It's all about image. It's all about perception.
VELSHI: Four o'clock, as their meeting breaks, Robby decides he'll need to observe SpeedTech in action as a customer. Tomorrow, he'll be Randy's student in class and on the track. (on camera): Do you still get that much of a kick out of getting into one of these cars?
GORDON: Some days I get a kick out of it and some days...
STORY: You get kicked out of it.
GORDON: Yes, I get kicked out of it.
VELSHI (voice-over): Up next, Day 2, Robby surprises Randy by bringing a very special student to SpeedTech.
R. BAKER: Today, was a great surprise to me.
VELSHI: And the mentor ruffles some feathers.
GORDON: Can I take him for a ride?
R. BAKER: Yes.
GORDON: You know, do it your own way. Sorry, do it your own way.
R. BAKER: Tension at the track, it's all ahead on the TURNAROUND.
(COMMERCIAL BREAK)
VELSHI (on camera): This is Day 2 of the turnaround here in North Carolina. Yesterday, we introduced a local racing school owner to NASCAR driver, Robby Gordon who's also the owner of his own team. Well, Gordon and his team seemed really keen on helping this racing school out with some of its business and marketing issues. But by the end of the day, the school owner, Randy Baker, seemed a little concerned that this young lion, Robby Gordon, couldn't help him out with anything.
(voice-over): Eight thirty a.m., Randy and his small staff are loading up race cars to take to a rental track about 20 minutes away. These are SpeedTech's finest assets, more than a dozen authentic NASCAR race cars, each one worth at least $85,000, all in mint condition. Many of these three-ton marbles have been piloted by legendary champions, including Dale Earnhardt, Sr., and 2005 Daytona champ, Jeff Gordon. On Day 1, while Robby Gordon assessed the untapped money making potential of Randy's school...
GORDON: Beautiful under their lid and stuff, nice job.
VELSHI: ...Randy was wondering if he's ready to embrace Robby's corporate cash-fueled version of NASCAR.
GORDON: I'm pretty new to the racing side, but the sponsorship side is where we've been really good with.
R. BAKER: I'm still unclear of what exactly we're going to get from it. VELSHI: But it's a new day, and this morning, despite being puzzled by what this turnaround could bring, Randy is intrigued.
R. BAKER: Man, this might be my chance. What I'm looking for out of the day today is to make the bond with Robby.
VELSHI: Eleven a.m., and the NASCAR team owner and driver hopes to get a better lock on Randy's potential by making like a novice and taking a racing lesson at SpeedTech. Before putting students in the driver's seat, Randy parks them in the classroom.
R. BAKER: I don't care who you are. You could be the best race driver in the world, you come to my school, you're going to sit down in that classroom. We're going to tell you the basics.
JOHN PENNINGER, CHIEF INSTRUCTOR, SPEEDTECH AUTO RACING SCHOOL: We're not going to let you get in these cars and hurt yourself or someone else.
VELSHI: An instructor brings the classroom orientation.
PENNINGER: Just keep your eyes in front of you. That's half the battle.
VELSHI: Robby is front and center watching his every move and he's brought along a surprise guest.
VELSHI: Well, Robby Gordon and his team are going to be taking a close look at how this business runs. And one of the things that seems to be developing is that Randy Baker wants to develop closer corporate relationship both with his clients and possibly with sponsors. Well, one of Robby Gordon's corporate sponsors is in this lesson right now. He's getting a sense of how this school works.
KEITH NEUMANN, MARKETING DIRECTOR, JIM BEAM: I'm Keith Neumann. I'm the marketing director for Jim Beam.
GORDON: I don't think he was prepared for Keith to be there with me.
R. BAKER: Low and behold, did he not bring a sponsor with him.
GORDON: I wanted to see how he reacted under those pressure situations.
VELSHI: Randy has met Keith briefly and he realizes Jim Beam is a major supporter of NASCAR. The bourbon company has poured millions into motor sports and is always looking for new ways to send their brand's message. In fact, Keith thinks Randy could make big money helping companies like his entertain clients during race weekend.
NEUMANN: We're trying to entertain customers for three, four days a lot of times and there's a lot of down time. And I think this would be a great way to get 30, 40,50 guys out on a track, give them an experience they'll never forget and I think will also make them appreciate a little bit more of what Robby does on Sunday. There's a lot of schools out there. He's got to find his unique point of difference and really drive that home.
VELSHI (on camera): But there's hope?
NEUMANN: Yes, absolutely.
PENNINGER: Any time that I leave the groove after running on the track, my hand goes up. I want to make sure nobody runs over me.
VELSHI (voice-over): Experienced driver that he, Robby is following the lesson easily and he's impressed.
GORDON: They did go through the basis fundamentals, the safety of the car, how to start the car, how to let the clutch out, the car, being a race car, not a street car. Their safety stuff was pretty good.
VELSHI: But it has to be about more than just racetrack know- how. Just a few minutes into class, the sponsorship expert picks up on a problem with Randy and his staff. It falls into the area of customer service, more specifically customer communication.
NEUMAN: It is a bit of a fine line between intimidating and being knowledgeable. I think for him, it's so second nature; it doesn't dawn on him that the people he's talking to won't understand the terminology.
R. BAKER: Get in there and try not to sol (ph) the wheel.
PENNINGER: Pass on the straight-aways only. The slow car moves to the inside. The pass is done in the groove and to the outside, OK. You're not going to hurry the situation by tucking up underneath somebody's deck lid trying to help them get over.
VELSHI: SpeedTech's target customer might be a corporate executive with no experience behind the wheel of a race car. But any questions about the school's procedure slam up against another SpeedTech problem, one that's often found in small business, a reluctance to let go of old-style thinking...
M. BAKER: We know what we're doing.
R. BAKER: We have a way that we've been doing schools for 25 years and it seems to work good for us.
VELSHI: ...and a resistance to outside help and advice.
R. BAKER: I know Robby had a couple of ideas that he might have wanted to change things and well, I didn't think that was what we needed to do.
STORY: He knows that corporate America is where his bread and butter is. He knows that's how he's going to make his business successful. He has no idea how to get there. VELSHI: But will Randy make a course correction once the wheels hit the ground? Coming up, the group heads to the racetrack and Robby's crew gets more serious.
NEUMANN: He feels like he has to make a choice.
VELSHI: Next on THE TURNAROUND.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
HARRIS: ... CNN Center in Atlanta, "THE TURNAROUND" with Ali Velshi continues in 60 seconds but first a check of headlines now in the news.
Still no word on the whereabouts of Sarah Michelle Lunde, a Florida girl who's been missing for nearly a week. The search expanded today to include a state park near her home. Police are questioning a convicted sex offender who was allegedly at Lunde's home on the day she disappeared. He is in custody on unrelated charges.
Airport security screening is reportedly no better than it was before the September 11 attacks. That's what two reports soon-to-be released government reports have found. And one congressman says people will be shocked to see the results after all the money that's been spent to increase security.
For a second straight weekend, Chinese citizens stage massive demonstrations in several cities. They're angry about Japanese textbooks they say downplay Japan's wartime atrocities. Protestors also oppose Japan's bid for a permanent seat to the United Nations Security Council. Some demonstrators, reportedly, became violent, throwing rocks at the Japanese consulate in Shanghai.
More news in 30 minutes, "THE TURNAROUND" with Ali Velshi continues right now.
(BEGIN VIDEOTAPE)
VELSHI (voice-over): A professional track under a clear North Carolina sky. It's 1:00 on Day 2 of this turnaround. The tents are up. The flags are ready. SpeedTech Racing School owner Randy Baker is in his element. His mentor, race car driver and owner, Robby Gordon, is also preparing to have fun, but also to give business feedback. Robby's brought along one of his sponsors, Jim Beam marketing director, Keith Neumann, to experience the track segment of the class and to assess Randy's readiness to go after corporate sponsorship. Randy performs last minute checks on the cars and has his crew comb the track for potentially dangerous debris.
R. BAKER: Probably going to bust a tire out here in this crap.
VELSHI: It's time to roll. Robby and his sponsor, Keith, are pumped. Suddenly, a slight bump in the road when Robby suggests a different approach. GORDON: You want to take Keith for a ride, show him where the breaking points are, show him what you're talking about?
R. BAKER: Well, generally, what we do, we actually let you drive. We're going to let you drive the car and we'll ride in the car with you and assist you and help you out.
GORDON: Can I take him for a ride first then -- or you take him for a ride, either way, bring him up to speed so he knows at least what he's looking for?
R. BAKER: Yes.
GORDON: You know, do it your normal way. Sorry, do it your normal way.
VELSHI: It's an awkward moment, one that reveals, once again, Randy's reluctance to change the way SpeedTech operates.
M. BAKER: We know you're capable. You don't need to prove to us what you can do, and especially not in our cars with a guest in the car.
VELSHI: But Robby goes with the flow and after getting Keith settled behind the wheel, it becomes clear again that Randy is not taking full advantage of SpeedTech's finest assets.
PENNINGER: These cars are full-blown Nextel Cup cars. The only thing different from these and a race ready car is about maybe 200 horsepower.
GORDON: For customers, students, they actually get opportunity to drive a Dale Earnhardt, Jr., car, Dale Earnhardt, Sr., car.
VELSHI: Robby revs up No. 3, the race car that NASCAR legend Dale Earnhardt, Sr., once powered around a track. As a safety precaution, even the pro has a SpeedTech teacher by his side. Keith Neumann is in Car 20, riding with Randy himself. Inside the car, Robby notices another feature that SpeedTech should be marketing more aggressively. Randy has outfitted each school car with cockpit cameras. Potential students may not know they could actually buy video of themselves driving to take home as a souvenir. Robby has a great time, managing to hit 160 miles an hour on the track.
GORDON: Wow! A whole lot of fun!
VELSHI: Once Keith is back in his street clothes, he's ready to weigh in with his observations.
(on camera): You seem like you've had a nice time.
NEUMANN: It's a great experience. I mean the product, I think, is really strong. It's a matter of finding the right groups to sell it to and market it to to make it work.
VELSHI (voice-over): Keith sees potential in the product, but he remains concerned about a problem he first identified in the classroom instruction.
NEUMANN: A lot of the terms he uses, for somebody who's never been in that car before, you know I'm not sure what he's telling me to do. You talk about push and pull going into turns. If he had said hey, look, banking is going to help you pull down the track, so you have to kind of steer up it, that would have made it a lot easier for me to get. So you know that's a pretty big gap that he has to transcend, I think, as he gets corporate clients in his schools.
VELSHI: Keith thinks if Randy can overhaul the language, SpeedTech can attract a lot more corporate business.
NEUMANN: A lot of guys are out there for three or four days entertaining clients and guest. And there's only so much golf and you know, dinners and types of things that you can do for clients. It would be great to get them out here and give them a truly unique experience.
VELSHI: Keith's overall enthusiasm seems to be having an impact on Randy.
(on camera): Are you changing your view of marketing? I know it's a mixed view because you, like many people...
R. BAKER: I've had a -- you know bad experiences that I've had in, let's say, marketing and things like that but yes, I'm ready for a change. And to see the things that these guys have done, Robby has accomplished in a short amount of time, it's really encouraging.
VELSHI (voice-over): And as the sun sets, Randy's crew has one final stop on this second evening of the turnaround. They've been invited to the headquarters of Robby Gordon Motorsports for a meeting, for an up close look at the kind of success SpeedTech could have if Randy really tackles the marketing challenge.
Robby's CEO, John Story, gives Randy, his wife and one of their employees a quick tour. The cars are pristine and plastered with the names of sponsors. The machinery is high tech. Even the floors of the garage are spotless.
R. BAKER: Hey, Robby.
GORDON: How are you?
R. BAKER: Great, man, great. Nice place.
GORDON: Thank you.
R. BAKER: Yes, sweet.
GORDON: Thanks.
R. BAKER: Nice and clean.
VELSHI: The results of Robby's aggressive marketing are everywhere. Randy's wheels are turning as his crew sits with John Story, the business architect has an assignment.
STORY: Clearly, your business itself is a great business, very authentic. I think people just need to know about it. What we'd like you to do is to come up with five items that differentiate and distinguish yourselves from your competition.
VELSHI: As the SpeedTech team starts thinking about the task ahead, they get to watch the NASCAR team owners pit crew demonstrate how to change four tires in 15 seconds.
R. BAKER: First-class operation. I'm very, very impressed with what they've got going on, how they've done it and what they've achieved in a, you know, small amount of time.
VELSHI (on camera): So now you've taken a look at how Randy Baker runs his driving school, what's your impression of things he can change?
STORY: It's a marketing driven sport. Randy's really got to evaluate his own misgivings about the concept of marketing. He's got a great product. He's just got to let people know about it.
VELSHI: Day 2 has been a long one here in North Carolina. But as everyone goes home for the night, they agree on one thing. It's all about the "m" word, marketing. Our mentor, NASCAR driver Robby Gordon is a master of it. Our small business owner, Randy Baker, he has a deep mistrust of marketing. He goes home tonight to struggle with that. And if he gets past it by morning, he might have a chance at a turnaround.
(voice-over): Coming up...
R. BAKER: I'll probably be up late tonight, doing a lot of soul searching.
VELSHI: ... the final day of the turnaround next.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
VELSHI (voice-over): Sunrise in the Carolinas, and a new opportunity for Randy Baker to give new life to his financial struggling racing school.
R. BAKER: I'm not ready to give up on the business by any stretch.
M. BAKER: He's just such a good guy. He really is. And he's struggled so much.
R. BAKER: I'm looking for some help.
VELSHI: Help has arrived in the form of NASCAR's Robby Gordon. For two days, the race car driver and team owner has observed the SpeedTech School's operation in action. Gordon's message has been clear.
GORDON: For him to grow his business, he's going to have to accept the marketing opportunities.
VELSHI: During this turnaround, Robby's team has also been urging Randy to improve his school's customer service to make it a better business clients.
(on camera): So he's got to spend some money on marketing. He's got to spend some money to get these clients.
STORY: It needs to be a nice, big, white tent. There's chaffing dishes out. There's a nice breakfast. Treat them like they're special.
VELSHI (voice-over): The way SpeedTech talks to its students could improve as well.
NEUMANN: I think the big challenge for him is how do you take the language and how do you sort of dumb it down a little bit so that, you know, the average person who doesn't have the racing background can still get the point?
VELSHI: For two days, Randy has resisted changing his ways and his old fashioned racers mind-set.
R. BAKER: I pretty much got a grip on what we're doing.
VELSHI: Now, comes Randy's chance to reinvent his business, by embracing the new marketing driven style of NASCAR. Robby has given the racing school owner some homework.
R. BAKER: He wants us to give five distinctive differences that makes us what we are compared to the other competition in our industry.
VELSHI: And so, Randy has huddled with his two most important advisors, his wife, Melissa, who manages the office, and a man named Dan Burke.
DAN BURKE, MARKETING DIRECTOR, SPEEDTECH RACING SCHOOL: I wear a lot hats here at SpeedTech. I do what needs to be done. I build relationship with people. I'll clean the cars.
VELSHI: He's also in charge of any marketing SpeedTech does, which has mainly happened in cyberspace.
(on camera): The word has to get out more.
BURKE: I've been focusing on the web and trying to get some good rankings, for instance, on Google.
VELSHI (voice-over): Realizing that using the Internet alone is not adequate marketing strategy, the SpeedTech team gets down to business.
R. BAKER: We've got a lot of differences between us and our competition that we know of.
BURKE: Top shelf equipment.
R. BAKER: Yes. We know we differentiate there and we've got the best stuff.
M. BAKER: Personalized service.
R. BAKER: Yes, the southern hospitality, that we bring people in, and we make them feel warm, comfortable.
VELSHI: As the team brainstorms, they get more excited.
R. BAKER: You know we're close but man, if we just -- we just need a little bit of a jump start, you know, because I feel like we're probably a diamond in the rough.
VELSHI: And always in the back of Randy's mind, a hunger to get back in the world of competitive racing.
R. BAKER: It goes from a desire to a burning desire. I mean it's just something that eats at you, you know. And it has for a long time, wanting to get back at it.
GORDON: He needs to do the driving school first and do a good job at that.
VELSHI: Randy, Melissa and Dan have formulated their plan. They're now ready to make their presentation at the headquarters of Robby Gordon Motorsports in the neighboring town of Charlotte.
R. BAKER: We got a little ride ahead of us and we'll probably talk a little bit more and think about if we've got any other ideas. But this is pretty much our plan. I'm ready.
M. BAKER: Yes.
BURKE: I'm ready for this.
R. BAKER: Let's do it.
M. BAKER: Let's go.
R. BAKER: Alive in 2005.
BURKE: That's right. Let me grab that phone real quick.
VELSHI: Just as their meeting comes to a close, the SpeedTech phone rings.
BURKE: Good afternoon, SpeedTech, this is Dan. How can I help you?
VELSHI: It's a customer interested in giving a racing class as a gift to a friend.
BURKE: Let's see, what's the date? I'm going to send you out this confirmation and it'll tell you everything you need to know.
R. BAKER: We want more of those kind of calls.
VELSHI: For the first time in a long time, Randy feels he's about to learn the business secrets he's been searching for, the ones that'll get a lot more of those customers calling in.
(on camera): Now, I'm going to ask you, all of this stuff, you seem energized. Is there something about this experience which causes you to say, yes, we can actually take this now to another level?
R. BAKER: I think we're closing in. I think we're on the right track. I'm already excited about everything, and the fact that we've done what we've done and had a good time this morning. It can only get better.
VELSHI: You guys sound pumped. You feel it.
R. BAKER: Yes, there's energy.
VELSHI (voice-over): Coming up, a presentation before the mentors in the board room at Robby Gordon Motorsports.
GORDON: There's a lot of things you guys left on the table that you could explain to him before he got in that race car.
VELSHI: Plus, Randy comes face to face with his worst nightmare next on THE TURNAROUND.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
VELSHI (voice-over): Charlotte, North Carolina, the headquarters of Robby Gordon Motorsports, 4:15 pm., Randy Baker and his team wait nervously.
R. BAKER: Going into it the first day, I was apprehensive. The second day, I was still apprehensive. The third day, I was apprehensive.
VELSHI: Apprehensive for good reason. Randy has no idea his mentor is about to introduce two new players to the game. They are the racing school owners' worst nightmare, marketers.
GORDON: We brought in two of the marketing companies that we currently work with.
STORY: Two friends of ours, Kirby Boone with Sports and Promotion and Brian Barr of Keystone Marketing.
VELSHI: These pros hope to convince Randy once and for all that marketing isn't always a swindle.
(on camera): You guys got some ideas?
KIRBY BOONE, PRESIDENT, SPORTS & PROMOTIONS, INC.: Yes. I want to listen to what he says his assets are and what separates him from his competitors, because I didn't even know he existed and I'm in this sport. I'm in the business. But he's not on the map at all.
VELSHI: How do you get there?
BRIAN BARR, VICE PRESIDENT, KEYSTONE MARKETING CO, INC.: Randy has this really unique product, but he doesn't know how to get out into the marketplace. He needs to kind of define his business.
UNIDENTIFIED FEMALE: OK, you can come on back with me.
VELSHI (voice-over): Finally, Randy's crew is called to the boardroom where they meet Robby's surprise guests.
STORY: I hope Brian and Kirby will be able to give Randy and his team a little bit of trust that he, too can gain by working with these companies.
First and foremost, we're interested to hear of the five points or more that you guys worked on that's the differentiating piece of your business as opposed to your competition.
VELSHI: Randy gets started, no handouts, no visuals, just talking.
R. BAKER: The quality of the equipment is probably the top end of the school industry. We do have a clean record on our driving record. Our accident record is good. That's one of the things that we kind of seem to pride ourself in. Beyond that, I would think it would be our gracious hospitality, when people do get to the racetrack, from simple things to coffee, donuts, snacks, drinks, thing likes that. We provide all that for them at no charge. I make it a point to be there hands on to oversee -- to make sure things run properly.
One of the things is we do a program where we allow passing. It is not a follow-the-leader situation.
VELSHI: Randy is finished, but Robby was looking for more.
GORDON: Homework probably needs a little better work. I expected at least one or two-pager to pass out to the people.
VELSHI: Robby has another critique, again, the customer service at the track. If Randy is going to score big-time corporate clients, coffee and donuts aren't enough.
GORDON: You need to think about serving them breakfast in the morning with a nice tent, hot meal, serving them lunch.
VELSHI: The mentor reminds Randy of his Jim Beam sponsor's complaint on Day 2, customer communication. GORDON: There's a lot of things you guys could explain to him before he got into the race car. I think he climbed in the car not really prepared to climb into the car.
VELSHI: Despite Robby's suggestions, there is no doubt in this board room, SpeedTech's product is good. And it's obvious to Randy that the experts Robby has assembled are heavy hitters.
BARR: We represent Hershey, Pfizer, Kraft, U.S. Army, Jim Beam.
BOONE: We manage all of Proctor and Gamble sports programs, and that includes all of their NASCAR program from -- well, they start with Folger's and Crisco and then to Tide. Now, it's expanded into a number of other brands, like Old Spice and Mr. Clean.
VELSHI: These guys live and breathe NASCAR every day and to them, Randy's marketing weakness is obvious.
BURR: I mean honestly, you weren't even on my radar screen and we've done driving experiences for our clients before.
VELSHI: The mentors identify some major selling points about SpeedTech that Randy missed.
GORDON: You have some marketing things built into your programming already. I mean there are Dale Earnhardt's cars -- a real Dale Earnhardt car. There's excitement right there.
BURR: So how cool is that that a guy can come off the street and drive a -- that's a unique point of difference for your company.
GORDON: It's a secret that nobody knows about.
How tied are you to that name of that company because your father has won championships, you have a brother that's won the Daytona 500. I believe that name is more powerful than the name you currently have right now.
BURR: You have a great family history and you should capitalize on that. Make that connection. It's all about the emotional connection in motor sports.
BOONE: You grew up in the sport. You know all the old stories. You know all the things that these people crave. They're fanatical.
R. BAKER: Well, I'm proud of that heritage, so let's take advantage of it.
VELSHI: Randy seems to be buying in, but his old distrust of marketers resurfaces.
R. BAKER: Any place that says marketing, it's like...
BURR: Just strike the word marketing from your repertoire. It's more than that. It's alliances. It's partnerships, to really get your product and the assets and the uniqueness that you have out in front of corporate America. And those are folks that we touch every day in the garage.
BOONE: I know you're all the time looking for, for our clients, all the time looking for new ideas and new ways to give their customers a unique experience that they cannot get anywhere else.
BURR: You said you've paid good money out and got nothing for it in return but forming a partnership with folks like us, we would retain your services for what you charge for them, come to an agreement on that price.
BOONE: This kind of marketing won't cost you any money.
R. BAKER: Right.
VELSHI: Finally after three days and plenty of resistance, it clicks. Randy realizes he can market SpeedTech without spending a fortune.
R. BAKER: This is, you know, very enlightening to me to be able to see how you guys can actually work together.
VELSHI (on camera): What do you think? You are, by definition, a man who is pessimistic about marketing.
R. BAKER: But I'm smiling.
VELSHI: You are smiling.
(LAUGHTER)
R. BAKER: I'm smiling and that's a good thing.
VELSHI: Melissa, you're smiling particularly big.
M. BAKER: Well, I'm probably the one that's (UNINTELLIGIBLE). I'm just the one that's past pushing Randy to these marketing companies and trying to get him to listen. And it's so nice to have him smiling and optimistic about, you know, developing these kinds of relationships.
VELSHI: That's what you need to do.
(Voice-over): The meeting ends with the marketers, Brian and Kirby, offering to help Randy take his first steps into the brave new world of marketing. Then it's time to say goodbye to the NASCAR star, who has shown Randy a new way to look at an old business.
R. BAKER: It's been a great opportunity, to come over here and get next to you and...
I'm surprised I feel as good as I do about the outcome of everything.
GORDON: He started off very negative. I think Randy learned a lot. R. BAKER: If nothing else, it's been kind of a rude awakening for me. It's hard to divert from what you know to make me want to take advice from somebody else.
GORDON: This racing industry has changed a lot in the last 10 years.
R. BAKER: And I'm ready to change with it.
GORDON: Well, excellent, guy.
R. BAKER: Good luck.
GORDON: Thanks.
R. BAKER: Good luck to you.
GORDON: All right, good luck with your job.
R. BAKER: Thanks.
GORDON: Take care.
R. BAKER: I guess you can teach an old dog new tricks. I just feel like I'm getting back into the groove. It's almost like coming home again.
VELSHI (on camera): NASCAR is a world steeped in tradition, but for some of the new generation, like Robby Gordon, they understand it's not just fast cars, it's about the money and marketing. Well, Randy Baker has taken a long time to come around to that conclusion but after the last three days he seems to have made his peace with it and it looks like he's rolling toward a turnaround.
In Charlotte, I'm Ali Velshi, see you next time.
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