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Magowan's Rebuttal to 'Lance Again'

Published June 9, 2011

For once Ray I'll disagree with something you've written. There are a number of reasons your argument that racing doesn't sell bikes doesn't hold water:

1. Trek, Specialized, Giant, SRAM, Shimano et al don't invest in racing programs to sell bikes just in the United States. They are truly world-wide companies, and sell most of their product outside the United States. Outside the U.S. pro cycling in many markets does sell bikes -- Latin America, Europe, Japan etc. That's not to say pro cycling doesn't sell bikes in the U.S., but rather that sponsoring Lance might not meet a marketing ROI if one calculated just the U.S. impact, but certainly does when that marketing spend is amortized across a global sales base.

2. Trek, Specialized, Giant, SRAM, Shimano etc aren't stupid. They wouldn't collectively spend tens of millions of dollars on equipping and sponsoring pro cycling teams if they didn't get a reasonable ROI on that spend. To suggest that everyone who invests in racing is driven purely by Mike Sinyard-style passion at the expense of hard analysis discredits a lot of really smart, numbers-oriented marketing folks in the bike industry. 

3. While U.S. bike sales from 1999 to 2009 -- the Lance decade -- were largely flat in unit sales, actually revenue growth by most manufacturers was impressive, as was profitability. That revenue and profitability growth was largely driven by growth in sales of primarily high-end road bikes -- $1500 MSRP and above -- where profits went along with the higher price points. High-end marketing is generally needed to sell high-end product so it's natural that racing programs would see an increase in spend to sell this newly-developed product.

4. Who is to say that absent an increase in racing program spend that the sales fall-off wouldn't have been worse in the U.S.? That cycling participation might have fallen as well? 

5. While I hate to open a Pandora's box by questioning unit sales and participation figures, the state of bicycling industry research has been such that we've all scratched our heads at some of the numbers. Given what we all saw at schools, on the roads and at the grocery store bike rack there were simply more bikes being used more often in 2009 than in 1999. Perhaps our industry research didn't keep up with the explosion in new channel sales (example: internet), new forms of participation (example: triathlon), or that the wealthier, better-off demographic that increasingly comprised cyclists last decade couldn't be reached via conventional, phone-based survey techniques? 

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