Performance Business Article

Here is a brief story written on Vivid Racing by Kris Wieber of Performance Business Magazine that we would like to share with you. This was written in October 2005: 

Vivid Racing, owned by Dan Mermelstein and Rob Rohn, got its start in a college dormitory while the entrepreneurs, who have been buddies since high school, were attending their sophomore year at Arizona State University in Tempe.

Investing a mere $500 of their own cash and borrowing another $1,500 from their parents, the business majors began selling cell phone accessories. Eventually, they moved over to hard-to-find parts for Subaru's WRX.

They named their new company Vivid Racing, and haven't had a chance to look back since.

The company has grown at a rapid pace since its 1999 founding by a pair of 19-year-olds. From the ASU dormitories, Vivid Racing moved into a 1,200-square-foot office in Tempe. As the business continued to grow, Mermelstein and Rohn moved their brainchild twice more, into a 3,500-square-foot office and most recently, into a 10,000-square-foot office at 465 E. Chilton Drive, Chandler.

As their space requirements have grown, so have their sales. The now 25-year-olds expect Vivid Racing's sales to exceed $5 million in 2005.

And not only have the pair paid back their initial loan, they have no outstanding debt, quite impressive considering the facilities and equipment they have, their personal youth and the youth of their company.

Mermelstein says their secret lies in their ability to communicate, with each other and with their customers. In other words, it's all about marketing.

Guerilla Marketing
At Vivid Racing, cars that can perform with speed, power and handling are savored. However, where they have achieved greatness is in the company's focus on business: developing a brand image and marketing. They don't get lost in their love of labor, and they have learned not to restrict their scope.

"We don't limit our focus to one channel, one car or one forum as we did when we started. We have branched out so that we have our feet in different areas, which gives us the ability to expand and grow," says Mermelstein.

A lot of people, in Mermelstein's opinion, try and start their own business without realizing the business aspect of the industry.

"It's not just about selling parts. It requires a lot of educating, investment of time and dedication to get to a certain level, and a lot of that is achieved through tactical marketing," says Mermelstein.

Marketing is all about getting the word out on your company, its products and services. There are numerous ways in which to do that, and Mermelstein says that Vivid Racing incorporates one method for all of them: guerilla marketing.

"Guerilla marketing is getting in front of someone's face whether they like you or not. You're growing a brand, and people are going to attach to that brand and jump on board, or they're not. We try to do anything and everything to get in front of people's faces. If they don't like it, that's okay. We'll move on to the next person. We're very aggressive in how we promote Vivid. We don't do standard issue girl-laying-on-car ads. We'll do all kinds of different things to really get people to look, think and inquire," says Mermelstein.

The venues Mermelstein incorporates in marketing include the Internet, local car events, national events, national automotive magazines, corporate partnerships, project vehicles, road racing and car shows.

Even the small things are important.

"We come from an extreme sports background, so we have stickers. Skateboarders go around slapping stickers on light poles and signs, and when we go to shows, we have our own stickers, called Slap-It Stickers. We'll slap them on any thing, so people always recognize our name. We do little things like that to promote our name, our brand," says Mermelstein.

Without branding, Mermelstein says you are closed to the scope of everything you can achieve for your company.

"Branding is what people recognize. There' a reason you know McDonald's and Pepsi. Whether it's a logo, a slogan, somebody talking about it-it doesn't matter. Any type of press is good press. If it's stickers, if it's racing, if it's online, if it's a huge website-branding is what builds your company. If you don't have a brand that people recognize, you're going to be fighting for customers with the rest of the small timers."

Internet Impact
Although a website is pretty much mandatory for every business today, opinions of the Internet's impact on the performance aftermarket vary greatly. On the negative side, some see it as just another means for certain companies to slash prices with all the recklessness of an angry teenager slashing tires and keying cars.

On the flip side, many businesses owe a debt of gratitude to the buzz generated about them on the Internet.

Vivid Racing can see these opposing views, having been both hurt and helped, though for them, the scales tip more towards help than hurt.

"Without the Internet, Vivid Racing would not be in existence," says Mermelstein. "Vivid Racing started pretty much like everyone else, out of an idea, and it grew into what it is today. The Internet has allowed us to reach markets globally."

Vivid generates approximately 30 percent of their sales via their online store. Another 40 percent is done over the phone, and about 20 percent is business-to-business wholesale.

Looking at the Yin and Yang of the Internet's impact, Mermelstein says chat rooms have done a lot of good and bad, but mostly, they have created a place for people who love cars to visit and communicate.

And, just as people conversing in coffee shops purchase espresso, while visitors to Vivid's site []/ are chatting, they buy parts.

VR Life
While their website represents a significant part of their sales, it is role in developing their brand and image is equally important.

One section of their website, VR Life, is especially driven towards that goal and tackles it in a number of ways.

"That's designed to provide technical information, press releases, stories, photos, videos, etc. It's basically our own Vivid Racing magazine. It's like a journal of who we are and what we do," says Mermelstein.

While they do not promote VR Life, it is easily found on the website and frequently utilized.

"We're trying to build a whole brand and lifestyle. We want people to know and see everything and get involved with what we do, whether that's galleries, events where we show videos that we make, showing photos from an install. We're not providing information so much as we're giving people something to look at. That keeps their attention and keeps them on the website. There are plenty of other websites that have more information, but the more you can draw people in and get them involved, the better," adds Mermelstein.

Gumball 3000 Baby!
Some forms of marketing are more fun than others. In 2003, Vivid took advantage of a great opportunity and participated in their first Gumball 3000, driving with a variety of celebrities from San Francisco to Miami in the first Subaru WRX they built.

"We did that with MaxPower magazine, so we got into the event for next to nothing," says Mermelstein, whose co-driver was the photographer.

Due to the attention the Gumball had developed in its first four years, there were thousands of kids and people at every stop, and they all saw Vivid Racing.

The event was also followed by an entire film crew, complete with helicopters. Their footage was later made into a documentary, and in addition to a couple of spots in the movie, Vivid's WRX was featured on the poster.

Along with some attention on ESPN's 54321, all of the coverage has helped put Vivid Racing on the international map.

Vivid Racing participated in the Gumball again in 2004, this time in Europe. The event took them from Paris down through Spain, across the Mediterranean Sea, through Morocco, back through Spain and ended up at the Cannes Film Festival.

They took a break from the Gumball in 2005 but are looking to participate again in 2006.

"It's supposed be huge-rumor has it going around the world, flying cars in cargo planes and just out of control," says Mermelstein.

Local and National
Being able to market to a national audience is usually the ultimate goal for most advertising strategies. However, Vivid Racing has never worried about marketing in the usual way.

"We've kind of gone backwards. We started national, and now we're focusing a lot on local business," says Mermelstein.

Marketing and advertising at the local level has turned out to be a little bit tougher for Vivid. Mermelstein notes that while their costs are about the same as national advertising, their return is less.

However, that hasn't stopped them from pursuing a larger chunk of the local market in a number of ways. Along with the mandatory Yellow Page ads, they work with Internet search engines, advertise in local forums. They manage their grassroots marketing by attending events, distributing fliers, stickers, etc.

"We try and make sure that every car in our target market is driving around the streets with a Vivid Racing sticker on it. The more people see it, the more they come to recognize it and look to find out what it's about," says Mermelstein.

For the curious who look into what Vivid is about, their retail business, which has three lifts, an all-wheel drive dyno, an executive waiting room with a flat-screen TV, is open to walk-ins.

Aside from their stylish waiting room, Vivid also sets up outside their shop for barbeques, car shows and dyno days.

Mermelstein says, "We've also had some racing events we've done with NASA, but we try and keep it on a smaller scale so it's more intimate with the locals. It gives them the opportunity to get to know us."

In addition to the local racing events they host, Vivid does a lot with other NASA road racing competitions, including getting out and demonstrating their own driving skills.

With the rapid growth of drifting, they also sponsor drivers in the FormulaD drift series, as well as a local drift driver who is one of the top drivers in Arizona.

"We also sponsor a Group N rally car that competes in all of the West Coast rally events, and he's actually number one in the series. In addition, we sponsor a NASA Complete Pro Series driver who races in all of the West Coast regions, and he's number one in championships too," says Mermelstein.

To complement racing, he adds that another important part of establishing credibility with both local and national customers is to build a project car.

"There are so many companies that have online websites that sell everything, and that works too, but I think a project vehicle that's properly done educates you on exactly how parts perform, so you're not just a parts seller. It also validates you as a shop, as a tuner, showing that you can do this and do it well. Anybody can put parts on a website and place a price next to them. But, someone that knows how they work and can build something to the extreme really makes people want to be a part of your culture," says Mermelstein.

Alliances and Partnerships
Vivid Racing's cars have been featured in numerous magazines, and they have participated in national and international events that attract a great deal of media attention.

How do they get it done?

"We've built our business on partnerships and alliances, and without those, you're never going to get anywhere. We establish contacts, and meet the right people. We don't look for free ride at all. We're trying to grow long-term relationships," says Mermelstein.

According to Mermelstein, getting into magazines and events such as the Gumball 3000 are a result of good networking and relationship building.

"That's the bottom line, and I think a lot of people don't understand that," says Mermelstein.

While Mermelstein is reluctant to give away his secret, he does say that it's definitely not about the car, and it's not about how big your business is.

"It's about personality communications. The bottom line is people on the other side of the phone are just like every other person, and they see this stuff all day long," Mermelstein.

It goes back to guerilla marketing. Get in front of their face. They have to see you and know who you are for you to have a chance. Make contacts and take advantage of them. Find out who the right people to know are, and then be creative and persistent in how you get to know them, and then get them excited about what you're doing. If you don't know the people, get to know the people who know the people.

"How Modified [a magazine in which Vivid has been featured a dozen times] found us and how we began establishing our friendship and relationship with them was through someone else who knew the editor and knew us and the work we were doing. Our friend told the editor about us and we went from there," says Mermelstein.

He adds, "Once you know them and you spend lots of time drinking with them, they'll do anything for you," says Mermelstein.

Follow Up
One of the most difficult things to do with advertising is to determine what forms are generating the most interest.

How does Vivid Racing do it?

According to Mermelstein, "We try and find from each customer where they found out about us when they order. We do customer service surveys to find out where they came from, that they got all of the stuff they were looking for, that they were happy with their service. It's hard. There are so many people here that it's hard to accomplish it all, but we do the best we can."

A Vivid Future
Vivid Racing built their reputation on their work with Subaru's WRX and then moved on to the EVO. They're now moving on to European cars.

"We built an M3 that we just had shot for Bimmer magazine, and we're also working on an article for Roundel, the BMW Car Club of America magazine. We also built a Porsche 996 Carrera that we're going to be doing some press on with Excellence, a European magazine," says Mermelstein.

Explaining the transition, Mermelstein says that they wanted to touch the higher end of the market and see how it went. It has gone well, and Vivid plans to keep their feet in both markets.

"We're working on other projects. We're building a 240SX racecars, obviously because of how big the whole drift movement is with Gen X and Gen Y," says Mermelstein.

For the foreseeable future, Vivid Racing looks like they will continue to move onward and upward, branching out into new markets and continuing to build strong relationships, such as those they have begun with large, household-name corporations such as Pepsi and Mazda.

With Vivid Racing's future's so bright, they'll have to wear shades-or at least tint their windows.