I was recently reading about the challenges NASCAR has faced in the last ten years and it reminded me of that great philosopher, Meghan Trainor, who wrote “it’s all about the base.” When I first moved to North Carolina in the early nineties, NASCAR was the fastest-growing sport in the world. It went from a regional play to a national television contract and star drivers from other auto-racing leagues switched to the NASCAR circuit. Races were sold out and NASCAR seemed poised to capture the number two spot among US sports (the NFL was still the top dog around). NASCAR moved races from places such as North Wilkesboro and Rockingham to big cities including Chicago and Dallas/Fort Worth.
Since those glory days NASCAR has run into major difficulties. Rather than continue on its growth trajectory, television ratings have plummeted to the point where many doubt the contract will be renewed by major television networks. Moreover, many races no longer sell out and on most broadcasts the empty seats are impossible to avoid.
Why NASCAR faded
Although there are many theories on why NASCAR failed to live up to the promise it showed in the 90s, it points to a problem many companies have experienced when they lose focus on their most loyal users. In NASCAR’s situation, it was the audience in the Southeast that largely built the sport, the same people who made “Duck Dynasty” the most popular television show at one point. It moved races from local venues, as described above like Rockingham, to big cities where they felt they would get exposure to a larger audience. These moves broke the bond between the people in these communities and the sport. While NASCAR aimed for the big audience, its base started to disintegrate. Now the sport no longer has its core customers (or at least does not have as strong a relationship with them) and has not added enough casual viewers in the bigger market to stem this loss, let alone grow. Also, with the base less engaged, the virality of these fans has decreased and is bringing in fewer new fans.
It’s not just NASCAR
I realize my base is leaders in the tech and gaming space so you may be asking, “How does this NASCAR’s woes apply to company’s like King.com or LinkedIn?” It is relevant because businesses in almost every space have stumbled by abandoning their base to grow and go after a broader market. A Las Vegas casino may try to go up-market by remodeling and purchasing the newest slots, and paying for it by lowering their return to player, only to find that its local market does not care about the changes and switches casinos, while the expected new players do not find it attractive enough to switch from their current casino. A mobile game app may try to appeal to a broader market by changing its interface only to find that its loyal players will not keep playing and it is not attractive enough to appeal to new players.
As discussed earlier, the base is important not only for the revenue it generates but for the organic users it drives. These people are often thought leaders in their community (with community being broadly defined) or demographic. They will talk about their favorite sport or app and their friends are more likely to try it and use it.
Do not neglect your base
The lesson of NASCAR is that you must make sure any changes or initiatives to attract new users maintain the experience of your core users. The NFL faced a similar situation; Cleveland is a relatively small market but was one of its foundational franchises. The Cleveland Browns moved to Baltimore in 1996. Rather than abandon the Cleveland fans, the NFL arranged for a new franchise in Cleveland in 1998 that would use the Browns name. While the NFL could have placed the new franchise in a larger city, it picked Cleveland so that these core fans would not be alienated. The NFL now is the most valuable sport in the United States while NASCAR struggles.
There are several ways for companies outside of sports to manage placating their base while growing their users. They can create multiple versions of their product that appeal to different segments. They can use the fervor of their base as a selling point to new users. They can keep the core offering intact and add features that both new and existing users like. The important element is not alienating the existing base for the new users.
Key takeaways
- All businesses need to focus on keeping their core customers happy, especially when trying to grow the user base.
- As well as being important customers, core users are key ambassadors of your product and if you alienate them you lose a major source of organic users.
- When adding features or changing your product, ensure that the experience is as good or better for your core users than before.
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