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Tricks to Successful Marketing in the Fast Lane

Aired May 28, 2005 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RANDI KAYE, CNN ANCHOR, THE TURNAROUND: I'm Randi Kaye at the CNN Center in Atlanta. THE TURNAROUND with Ali Velshi begins in 60 seconds. But first a check of the headlines now in the news.
A bloody day in Iraq. Twenty-eight people died in attacks across the country. Nine were killed in the Sunni triangle town of Tikrit. A pair of car bombs exploded within an hour of each other. And government officials in Iraq and Japan feel certain the Japanese hostage has been killed. The security worker was kidnapped in early May. A website video appears to show him before and after his execution.

Two bombs ripped an Indonesian market today, killing at least 20 people. The second exploded just as rescuers and on-lookers rushed to the scene. Police suggest Islamic extremists are behind the blast. It came just two days after the U.S. closed its Embassy warning of a possible terrorist strike.

And a murder suspect is jailed in Atlanta today, ending a 57-hour drama atop a construction crane. Police grabbed Carl Rowland and tasered him as he reached for water. He was strapped to an orange stretcher and lowered 350 feet to the ground. Rowland now faces extradition to Florida, where he is accused of killing his girlfriend.

More news coming up in 30 minutes, THE TURNAROUND with Ali Velshi begins right now.

ALI VELSHI, CNN ANCHOR, THE TURNAROUND: Next on THE TURNAROUND old school meets new school in the high-octane world of NASCAR.

UNIDENTIFIED MALE: 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 is clinging to his traditional ways?

UNIDENTIFIED MALE: We have a way we've been doing schools 25 years and it's seem today work good for us.

VELSHI: Two racing generations meet head on.

UNIDENTIFIED MALE: For him to grow his business, he is going to have to accept the marketing opportunities.

VELSHI: THE TURNAROUND begins now.

I'm Ali Velshi in North Carolina at the intersection of two great American passions, 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. After three days together, our school owner is either going to spin out or be on the road to a turnaround.

RANDY BAKER, PRESIDENT, SPEEDTECH AUTO RACING SCHOOL: I would say we're top shelf in what we do.

VELSHI: Meet Randy Baker, the man in the 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 racecar around a track at speeds of 160 miles per hour.

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. These cars are the real McCoys.

VELSHI: And Randy would know. His father, Buck, and his brother, Buddy, both made big 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.

BAKER: We were on the second to last lap, flipped on the backstretch. And I broke a bunch of ribs, broke back and had some contusions and things like that. I laid out that year and I'm telling you, you can lay out of racing 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.

BAKER: To get me back in the racecar, I would 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.

What's the big struggle here?

BAKER: The business struggle is just keeping up with the expense of everything. Fuel costs are going up, insurance. Track expense is anywhere from -- it starts at $3,500 and goes up to about $7,000 a day.

VELSHI: Just to lease a track?

BAKER: Just the track. You have to have insurance.

VELSHI: 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 one class. BAKER: You know I love racing race cars, but there are times Ii could come in this place here and cuss at the race cars, because it's just not making the money that it needs to.

VELSHI: If Randy is old school, Robby Gordon is new, a championship driver who is a fast up and comer in the world of NASCAR. He has more than 300 race starts under his belt. This year, at just 36 years old, he is the brand new owner/driver of his own NASCAR team. Racing is all about money. That means sponsors. Their names everywhere, plastered over cars, suits, hats and everything else.

ROBBY 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 will be Randy's mentor for the next three days. It's day one, 2:00. Randy waits, wondering who his turn around guide will be and supervising repairs on these awesome machines.

All right. So, right foot in?

BAKER: That's correct.

VELSHI: One look inside Randy's garage and a racing fan can't help, but be impressed.

Look at that, I'm like a natural. Some of SpeedTech's school cars have been raced by NASCAR legends, including 2005 Daytona 500 winner Jeff Gordon and the late, great Dale Earnhardt, Sr..

They're stripped down; there is no creature comforts in here at all.

BAKER: Built for speed, not comfort.

VELSHI: Do I get out with the steering wheel in?

BAKER: No.

VELSHI: Within minutes, Robby Gordon walks through the door.

BAKER: Good gosh.

GORDON: Good god, trouble is in the house.

BAKER: What's going on?

VELSHI: John Story, the CEO of Robby Gordon MotorSports leads the way.

BAKER: How's it going?

UNIDENTIFIED MALE: My pleasure.

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. Your family has been around, obviously, for many, many years. I'm sure there are things we're going to be able to learn from you as well. I look forward to that.

BAKER: Great.

VELSHI: But Robby and John already know they can help Randy in what they consider to be the most crucial area.

JOHN STORY, CEO, ROBBY GORDON MOTORSPORTS: I'm not sure we came here thinking we could help you with your at-track experience at all, but one of the things that we've been pretty good at lately is the marketing side of the business.

BAKER: Well that's where I'm lacking.

STORY: Finding money in the 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 are the ones who chase down the biggest sponsership dollars. Getting a piece of the action means getting aggressive about pushing his business.

MELISSIA BAKER, VICE PRESIDENT SPEEDTECH AUTO RACING SCHOOL: 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: What are some of the things we should put Randy to now?

STORY: Robby obviously is going to be more interested, and I'm not even qualified, to think about the cars and the on-track performance. I would 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.

But during the short break that follows, it becomes clear just how challenging this turnaround is going to be. Coming up from now.

BAKER: I'm still unclear of what exactly what we are going to get from it.

VELSHI: Will this old hand at racing be willing to learn some new business tricks.

BAKER: I guess I had some expectations a little higher.

VELSHI: THE TURNAROUND turns complicated next.

(COMMERCIAL BREAK)

VELSHI: 3:30 p.m., day 1 of THE TURNAROUND. SpeedTech Racing School owner Randy Baker already appears skeptical about the new world of stock car racing, represented by his mentor, NASCAR team owner and driver Robby Gordon.

BAKER: I was a little disappointed at first because I didn't know what all Robby had to offer. Knowing racers and egos and things like that. 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.

BAKER: Where is Jeff? They got the wrong Gordon. If I had a pick I would have thought the other Gordon, you know Jeff Gordon showing up, 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 MotorSport is a race team. 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.

BAKER: Being a business owner, every day is a challenge. I'm not making a profit right now.

VELSHI: Getting a lesson from Randy has got to be more valuable than just getting a lesson from somebody who has just read about it.

GORDON: I agree and that is the same thing I thought when you mentioned his guy that I was going to get to come and help me. But this guy is going to help me before the day is all said and done.

VELSHI: Before they even sit down together Robby and his business manager, John Story agrees that Randy has to change his old- school mind-set and make marketing his top priority.

STORY: I don't know that we spent much money marketing last year either. We were able to attract, you know, a line of very good sponsors, exceptional sponsors. There's way to get it done without having to spend your last dollar.

GORDON: And you might be able to help them with a basic little package once we understand where you're at and what you're trying to do.

VELSHI: Randy may soon get a chance to test that theory. 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 racecars into rolling billboards.

GORDON: Right here you have GMAC, Pepsi, Dupont, and Citgo. On Site, Napa, Snap On. Budweiser.

BAKER: I would take one out of ten.

VELSHI: The second possibility, corporate clients. Fortune 500's CEOs regularly make their executives share everything, from golf games to learning how to drive an armored tank together. It is called corporate team building and companies spend millions of dollars a year on it. 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 racecars.

GORDON: 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.

BAKER: And as you can see we haven't spent a lot of money.

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. Buying land to build his own half-mile concrete oval simply isn't feasible. That means spending between $3,500 and $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.

BAKER: I'm the small guy on the list. So, I get what's left. I get crumbs, the crappy days of summer when it's raining in the afternoon and only get track dates at night.

VELSHI: The mentor's 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 added in, he's barely raking in enough to break even. How many people are we talking about? What makes a class profitable? What would you love to see on a regular basis? BAKER: Fifty people a day.

VELSHI: Is that once a week?

BAKER: Every other week.

VELSHI: Every other week?

BAKER: Three days of 50 people. Which would be 150 people per weekend.

VELSHI: It's an optimistic target, one to strive for in the coming years, but to get to that point, Randy has to work on his image.

STORY: This is an image-based sport. It's all about image. It's all about perception.

VELSHI: 4:00, 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.

Still get that much of a kick out of getting into one of these cars?

GORDON: Some days I get a kick out of and some days.

VELSHI: You get a kick out of?

GORDON: I get a kick out of it.

VELSHI: Up next day two, Robby surprises Randy by bringing a very special student to SpeedTech. And the mentor ruffles some feathers.

BAKER: Can I take him for a ride?

UNIDENTIFIED MALE: Yes.

BAKER: Do it your way. Do it your way.

VELSHI: Tension at the track, it's all-ahead on THE TURNAROUND.

(COMMERCIAL BREAK)

VELSHI: This is day two of THE TURNAROUND here in North Carolina. Yesterday, we introduced a local yesterday; we introduced a local racing school owner to NASCAR driver, Robby Gordon, who is 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 lie on, Robby Gordon, could help him out with anything.

8:30 a.m. Randy and his small staff are loading up racecars to take to a rental track about 20 minutes away. These are SpeedTech's finest assets. More than a dozen authentic NASCAR racecars, each one worth at least $85,000 all in mint condition. Many of these three-ton marvels have been piloted by legendary champions, including Dale Earnhardt, Sr., and 2005 Daytona champ, Jeff Gordon. On day one, while Robby Gordon assessed the untapped money making potential of Randy's school, 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 sponsorship side, we've been really good at.

BAKER: I'm still unclear exactly what we're going to get from it.

VELSHI: But it's a new day and this morning, despite being puzzled by what THE TURNAROUND could bring, Randy is intrigued.

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: 11:00 am, 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.

BAKER: I don't care who you are. You can be the best racecar driver in the world. You come to my school, you're going to sit down in the classroom and we're going to tell you the basics. We're not going to let you get in these cars and hurt yourself or someone else.

VELSHI: An instructor begins the classroom orientation.

UNIDENTIFIED MALE: 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 has brought along a surprise guest. While Robby Gordon and his team are going to be taking a close look at how this business runs, one of the themes that seems to be develop something. Is that Randy Baker wants to develop closer relationships with clients and possibly sponsors. One of Robby Gordon's corporate sponsors is in this lesson right now. He's getting a sense of how this school works.

KEITH NEWMAN, MARKETING DIRECTOR FOR JIM BEAM: I'm Keith Newman, the marketing director for Jim Beam.

GORDON: I don't think he was prepared for Keith to be there with me.

BAKER: Low and behold did he not bring a sponsor with him.

GORDON: I wanted to see how he reacted under 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 MotorSports 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.

NEWMAN: We're trying to entertain customers for three, four days a lot of times. There's a lot of down time. This would be a great way to get 30, 40, 50 guys out to a track, give them an experience they'll never forget and will also make them appreciate more of what Robby does on Sunday.

There are a lot of schools out there. He has to find his unique point of difference and really drive that home.

VELSHI: But there's hope?

NEWMAN: Yes absolutely.

UNIDENTIFIED MALE: Any time I leave the groove after running on the track, my hand goes up. I want to make sure nobody runs over me.

VELSHI: Experienced driver that he is, Robby is following the lesson easily and he's impressed.

GORDON: They did go through the basic fundamentals, safety of the car, how to start the car, how to let the clutch out, and the car being a racecar, not a streetcar. 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.

NEWMAN: It is a bit of a fine line between intimidating and being knowledgeable. For him, it's so second nature it doesn't dawn on him the people he's talking to won't understand the terminology.

BAKER: Get in there and try not to saw the wheel. Pass on straight ways only. Slow car moves to the inside. Pass is done in the groove of the outside, OK? You're not going to hurry the situation by tucking up under 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 racecar. 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 we've been doing schools 25 years. 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 he might want to change things and, well, I didn't think that was what we needed to do.

GORDON: He knows Corporate America is where his bread and butter are. 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 get more serious.

GORDON: I feel like he has to make a choice.

VELSHI: Next on THE TURNAROUND.

(COMMERCIAL BREAK)

KAYE: I'm Randi Kaye at the CNN Center in Atlanta. THE TURNAROUND with Ali Velshi continues in a moment but first a check of headlines now in the news.

Cemeteries in war memorials around the nations capital are strewn with flags, flowers and wreaths. They honor the country's war dead on this Memorial Day weekend. The commander in chief of the Veterans of Foreign Wars says citizens have a duty to remember those who died in uniform.

An amber alert has been issued in Missouri for a missing 3-year- old boy. The child was last seen Friday night at his grandmother's home. He disappeared along with his dog, the black Labrador. Police still aren't sure if the boy wandered off or was abducted.

The 57-hour crane stand off in Atlanta comes to an end with a sharp sting of a taser. Murder suspect Carl Edward Rowland was taken into custody shortly after midnight last night. We'll show you how it all went down on "CNN Live Saturday" coming up in about half an hour.

More news coming up in 30 minutes. THE TURNAROUND with Ali Velshi continues right now.

VELSHI: A professional track under a clear, North Carolina sky. It's 1:00 on day two of this turn around. The tents are up. The flags are ready SpeedTech racing school owner, Randy Baker is in his element. His mentor, racecar driver and owner, Robby Gordon, is also preparing to have fun. But also to give business feedback.

Robby has brought along one of his sponsor's, 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.

GORDON: 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 what he's looking for?

R. BAKER: Yes.

GORDON: Do it your own way. Sorry, do it your own way.

VELSHI: It's an awkward moment; one that reviews 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. After getting Keith settled behind the wheel, it's become clear again that Randy is not taking full advantage of SpeedTech's finest assets.

R. BAKER: These cars are full blown Netell cut cars, the only big difference from these and a race ready car is about 200 horsepower.

GORDON: The customer, students actually get an opportunity to drive a Dale Earnhardt, Jr car a Dale Earnhardt Sr car.

VELSHI: Robby revs up number three, the racecar NASCAR legend Dale Earnhardt Sr., once powered around the 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 can 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! That was a lot of fun.

VELSHI: Once Keith is back in his street clothes, he's ready to weigh in with his observations.

R. BAKER: You seem like you've had a nice time.

NEUMANN: It's a great experience. The product is really strong. It's a matter of finding the right groups to sell it to and market it to make it work.

VELSHI: 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 that's never been in that car before, I'm not sure what he's telling me to do. You were talking about push and pull going into turns. If he had said, look, the banking will help you pull down the track, so you have to steer up it, that would have made it easier for me to get it that's a pretty big gap he has to transcend 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.

NEUMAN: A lot of guys are out there three, four days entertaining clients and guests. There's only so much golf, dinners and types of things you can do. 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. Are you changing your view of marketing? It's a mixed view. You, like many people.

R. BAKER: I've had bad experiences in, say, marketing and things like that. Yes, I'm ready for a change. To see the things that these guys have done, Robby has accomplished in a short amount of time, it's very encouraging.

VELSHI: And as the sunsets, Randy's crew has one final stop on this second evening of the turn around. They've been invited to the headquarters of Robby Gordon Motorsports for a meeting and 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: Sweet. Nice and clean.

VELSHI: The results of Robby's aggressive marketing are everywhere. Randy's wheels are turning as his crew sits with his 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. We would like you 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 small amount of time.

VELSHI: Now you've taken a look at how Randy Baker runs his driving school. What's your impression of the things he can change?

STORY: It's a market-driven sport. Randy has to evaluate his own misgivings about the concepts of marketing. He has a great product. He just has to let people know about it.

VELSHI: Day two has been a long one here in North Carolina. But as everyone goes home for the night, they agree upon 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. If he gets past it by morning, he might have a chance at a turn around.

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.

(COMMERCIAL BREAK)

VELSHI: Sunrise in the Carolinas, and a new opportunity for Randy Baker to give new life to his financially struggling racing school.

R. BAKER: I'm not ready to give up on the business by any stretch.

M. BAKER: He's such a good guy. He really is and he struggles 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 racecar 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 turn around, Robby's team has also been urging Randy to improve his school's customer service to make it a better experience for clients. So, he has to spend some money on marketing, spend some money to get these clients.

STORY: It needs to be a nice, big, white tent. There are chafing dishes out; there is a nice breakfast. Treat them like they're special. VELSHI: 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 sort of dumb it down a little bit so that the average person that doesn't have the racing experience will still the get the point.

VELSHI: For two days, Randy has resisted changing his ways and his old fashion racers mind set.

R. BAKER: I've 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 make us what we are compared to the other competition in our industry.

VELSHI: So, Randy is 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 of hats here at SpeedTech, I do what needs to be done. I build relationship with his people. I'll clean the cars.

VELSHI: He's also in charge of any marketing SpeedTech does, which has mainly happened in cyber space.

The word has to get out more.

BURKE: I've been focusing on the Web and trying to get good rankings, for instance, on Google.

VELSHI: Realizing that using the Internet alone is not an adequate marketing strategy, the SpeedTech team gets down to business.

R. BAKER: We have a lot of differences between ourselves and the competition that we know of.

BURKE: Equipment.

M. BAKER: Our southern service.

R. BAKER: Yes, the southern house, we make them feel warm, comfortable.

VELSHI: As the team brain storms, they get more excited.

R. BAKER: You know we're close, but, man if we can just get a little jump start, 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 into 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 plans. They're now ready to make the presentation at the headquarters of Robby Gordon MotorSports in the neighboring town of Charlotte.

R. BAKER: We have a little ride ahead of us, I mean we are probably talking -- but this is pretty much our plan. I'm ready.

M. BAKER: Yes.

R. BAKER: I'm ready for this. Let's do it.

M. BAKER: Let's go.

R. BAKER: Wild in 2005.

BURKE: That's right.

R. BAKER: Let me grab that phone real quick.

VELSHI: Just as their meeting comes to a close, SpeedTech's phone rings. It's a customer interested in giving a racing class as a gift to the friend south Florida.

NEUMAN: What's the date? I will send you out this confirmation and it will 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 has been searching for. The ones that will get a lot more of those customers calling in.

I'm going to ask you all 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 on the right track. I'm already excited about everything. What we've done and had a good time thus far. It can only get better.

VELSHI: You sound pumped. I can feel it.

R. BAKER: Yes there's energy.

VELSHI: Coming up, a presentation before the mentors in the boardroom at Robby Gordon MotorSports.

GORDON: There are a lot of things you left on the table you could have explained to him before he got in that racecar.

VELSHI: Plus Randy comes face to face with his worst nightmare. Next of THE TURNAROUND.

(COMMERCIAL BREAK)

VELSHI: 4:15 p.m., Randy Baker and his team wait nervously.

R. BAKER: I went into it the first day I was apprehensive. The second day, I was still apprehensive. My 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 owner's worst nightmare, marketers.

GORDON: We brought in two marketing companies that we currently work with.

STORY: Two friends of our Kirby Boone with Sports & Promotions and Brian Barr with Keystone Marketing.

VELSHI: These pros hope to convince Randy once and for all that marketing isn't always a swindle.

You guys got some ideas?

UNIDENTIFIED MALE: Uh-huh.

KIRBY BOONE, PRESIDENT, SPORTS & PROMOTIONS, INC: 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 it out to the marketplace. He needs to kind of define his business.

UNIDENTIFIED FEMALE: You can come on back with me.

VELSHI: 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.

GORDON: First and foremost, we're interested to hear of the five points or more you guys worked on that's the differentiating piece of your business as opposed to your competition.

VELSHI: Randy gets started. No handout, no visuals. Just talking. R. BAKER: The quality of the equipment is probably the top end of the school industry. We have a clean record on our driving record, our accident record is good. That's one of the things we seem to pride ourselves 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 like that, we provide that for them and no charge for them at no charge.

I make it a point to be there, hands on to make sure things are done properly. We do a program where we allow passing and it's not a follow the leader situation.

VELSHI: Randy is finished, but Robby was looking for more.

GORDON: Homework needs a little bit of work. Expected at least a 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, serve them lunch.

VELSHI: The mentor reminds Randy of his Jim Beam sponsors complaint on day two-customer communication.

GORDON: There are a lot of things you guys could have explained to him before he got in the racecar. He climbed in the car not really prepared to climb in the car.

VELSHI: Despite Robby's suggestions, there is no doubt in this boardroom. SpeedTech's product is good. 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.

We manage all of Proctor and Gamble sports programs, and that includes all their NASCAR programs from Folger's, Crisco, and then to Tide. Now it has expanded into a number of other brands like Old Spice, Mr. Clean.

VELSHI: These guys live and breathe NASCAR every day. To them, Randy's marketing weakness is obvious.

BARR: 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 program already. I mean Dale Earnhardt's car is a real Dale Earnhardt car. There's some excitement right there.

BARR: How cool is that a guy can come off the street and drive -- that's a unique experience for your company.

GORDON: That's a secret nobody knows about. You have a father that has won championship, a brother that's won the Daytona 500. I think that name is more powerful than the name you have right now.

UNIDENTIFIED MALE: You have a great family history and you should capitalize on that.

BARR: Make that connection, it is all about that emotional connection in Motorsports.

GORDON: You grew up in the sport; you know all the old stories. They're fanatical.

STORY: We talk about the heritage, take advantage of it.

VELSHI: Randy seems to be buying in, but his old distrust of marketers resurfaces.

R. BAKER: When you said marketing, it was like --

BARR: Just strike the word marketing from your repertoire. It's more than that. It's alliances and partnerships to get your product and your assets and the uniqueness you have out in front of corporate America. Those are folks we touch every day in the garage. We're all the time looking for our clients, new ideas and new ways to give their customers a unique experience that they cannot get anywhere else.

You said you've paid good money out and gotten 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.

NEUMANN: This kind of marketing won't cost you any money.

BARR: Right.

VELSHI: Final after three days and plenty of resistance, it clicks. Randy realizes he can market SpeedTech without spending a fortune.

R. BAKER: This is very enlightening to me to be able to see how you guys work together.

GORDON: What do you think?

R. BAKER: You are, by definition, a man who is pessimistic about marketing.

GORDON: But I'm smiling.

VELSHI: You are smiling.

R. BAKER: I'm smiling, and that's a good thing.

VELSHI: You're smiling particularly big, Melissa. M. BAKER: Well, I'm probably the one that -- I know I was, I try today get randy to these marketing companies and try to get him listen and it's nice to have him smiling and optimistic about developing these kind of relationships.

GORDON: That's what you need to do.

VELSHI: 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.

GORDON: Great opportunity to come over here and get to meet you.

R. BAKER: 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. Maybe you don't want to take advice from somebody else.

GORDON: This racing industry has changed a lot in the last ten years.

R. BAKER: I'm ready to change with it.

GORDON: Excellent.

R. BAKER: You guys have helped me.

GORDON: Thanks. Good luck with your job.

R. BAKER: Thank you.

GORDON: Take care.

R. BAKER: I guess you can teach old dog new tricks. I just feel like I'm getting back into the groove. It's almost like coming home again.

VELSHI: 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 the marketing. Randy Baker has taken a long time to come around to that conclusion. The last three days, he seems to have made his peace with it. He's rolling toward a turn around.

In Charlotte, I'm Ali Velshi. See you next time.

(COMMERCIAL BREAK)

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Aired May 28, 2005 - 11:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RANDI KAYE, CNN ANCHOR, THE TURNAROUND: I'm Randi Kaye at the CNN Center in Atlanta. THE TURNAROUND with Ali Velshi begins in 60 seconds. But first a check of the headlines now in the news.
A bloody day in Iraq. Twenty-eight people died in attacks across the country. Nine were killed in the Sunni triangle town of Tikrit. A pair of car bombs exploded within an hour of each other. And government officials in Iraq and Japan feel certain the Japanese hostage has been killed. The security worker was kidnapped in early May. A website video appears to show him before and after his execution.

Two bombs ripped an Indonesian market today, killing at least 20 people. The second exploded just as rescuers and on-lookers rushed to the scene. Police suggest Islamic extremists are behind the blast. It came just two days after the U.S. closed its Embassy warning of a possible terrorist strike.

And a murder suspect is jailed in Atlanta today, ending a 57-hour drama atop a construction crane. Police grabbed Carl Rowland and tasered him as he reached for water. He was strapped to an orange stretcher and lowered 350 feet to the ground. Rowland now faces extradition to Florida, where he is accused of killing his girlfriend.

More news coming up in 30 minutes, THE TURNAROUND with Ali Velshi begins right now.

ALI VELSHI, CNN ANCHOR, THE TURNAROUND: Next on THE TURNAROUND old school meets new school in the high-octane world of NASCAR.

UNIDENTIFIED MALE: 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 is clinging to his traditional ways?

UNIDENTIFIED MALE: We have a way we've been doing schools 25 years and it's seem today work good for us.

VELSHI: Two racing generations meet head on.

UNIDENTIFIED MALE: For him to grow his business, he is going to have to accept the marketing opportunities.

VELSHI: THE TURNAROUND begins now.

I'm Ali Velshi in North Carolina at the intersection of two great American passions, 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. After three days together, our school owner is either going to spin out or be on the road to a turnaround.

RANDY BAKER, PRESIDENT, SPEEDTECH AUTO RACING SCHOOL: I would say we're top shelf in what we do.

VELSHI: Meet Randy Baker, the man in the 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 racecar around a track at speeds of 160 miles per hour.

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. These cars are the real McCoys.

VELSHI: And Randy would know. His father, Buck, and his brother, Buddy, both made big 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.

BAKER: We were on the second to last lap, flipped on the backstretch. And I broke a bunch of ribs, broke back and had some contusions and things like that. I laid out that year and I'm telling you, you can lay out of racing 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.

BAKER: To get me back in the racecar, I would 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.

What's the big struggle here?

BAKER: The business struggle is just keeping up with the expense of everything. Fuel costs are going up, insurance. Track expense is anywhere from -- it starts at $3,500 and goes up to about $7,000 a day.

VELSHI: Just to lease a track?

BAKER: Just the track. You have to have insurance.

VELSHI: 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 one class. BAKER: You know I love racing race cars, but there are times Ii could come in this place here and cuss at the race cars, because it's just not making the money that it needs to.

VELSHI: If Randy is old school, Robby Gordon is new, a championship driver who is a fast up and comer in the world of NASCAR. He has more than 300 race starts under his belt. This year, at just 36 years old, he is the brand new owner/driver of his own NASCAR team. Racing is all about money. That means sponsors. Their names everywhere, plastered over cars, suits, hats and everything else.

ROBBY 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 will be Randy's mentor for the next three days. It's day one, 2:00. Randy waits, wondering who his turn around guide will be and supervising repairs on these awesome machines.

All right. So, right foot in?

BAKER: That's correct.

VELSHI: One look inside Randy's garage and a racing fan can't help, but be impressed.

Look at that, I'm like a natural. Some of SpeedTech's school cars have been raced by NASCAR legends, including 2005 Daytona 500 winner Jeff Gordon and the late, great Dale Earnhardt, Sr..

They're stripped down; there is no creature comforts in here at all.

BAKER: Built for speed, not comfort.

VELSHI: Do I get out with the steering wheel in?

BAKER: No.

VELSHI: Within minutes, Robby Gordon walks through the door.

BAKER: Good gosh.

GORDON: Good god, trouble is in the house.

BAKER: What's going on?

VELSHI: John Story, the CEO of Robby Gordon MotorSports leads the way.

BAKER: How's it going?

UNIDENTIFIED MALE: My pleasure.

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. Your family has been around, obviously, for many, many years. I'm sure there are things we're going to be able to learn from you as well. I look forward to that.

BAKER: Great.

VELSHI: But Robby and John already know they can help Randy in what they consider to be the most crucial area.

JOHN STORY, CEO, ROBBY GORDON MOTORSPORTS: I'm not sure we came here thinking we could help you with your at-track experience at all, but one of the things that we've been pretty good at lately is the marketing side of the business.

BAKER: Well that's where I'm lacking.

STORY: Finding money in the 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 are the ones who chase down the biggest sponsership dollars. Getting a piece of the action means getting aggressive about pushing his business.

MELISSIA BAKER, VICE PRESIDENT SPEEDTECH AUTO RACING SCHOOL: 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: What are some of the things we should put Randy to now?

STORY: Robby obviously is going to be more interested, and I'm not even qualified, to think about the cars and the on-track performance. I would 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.

But during the short break that follows, it becomes clear just how challenging this turnaround is going to be. Coming up from now.

BAKER: I'm still unclear of what exactly what we are going to get from it.

VELSHI: Will this old hand at racing be willing to learn some new business tricks.

BAKER: I guess I had some expectations a little higher.

VELSHI: THE TURNAROUND turns complicated next.

(COMMERCIAL BREAK)

VELSHI: 3:30 p.m., day 1 of THE TURNAROUND. SpeedTech Racing School owner Randy Baker already appears skeptical about the new world of stock car racing, represented by his mentor, NASCAR team owner and driver Robby Gordon.

BAKER: I was a little disappointed at first because I didn't know what all Robby had to offer. Knowing racers and egos and things like that. 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.

BAKER: Where is Jeff? They got the wrong Gordon. If I had a pick I would have thought the other Gordon, you know Jeff Gordon showing up, 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 MotorSport is a race team. 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.

BAKER: Being a business owner, every day is a challenge. I'm not making a profit right now.

VELSHI: Getting a lesson from Randy has got to be more valuable than just getting a lesson from somebody who has just read about it.

GORDON: I agree and that is the same thing I thought when you mentioned his guy that I was going to get to come and help me. But this guy is going to help me before the day is all said and done.

VELSHI: Before they even sit down together Robby and his business manager, John Story agrees that Randy has to change his old- school mind-set and make marketing his top priority.

STORY: I don't know that we spent much money marketing last year either. We were able to attract, you know, a line of very good sponsors, exceptional sponsors. There's way to get it done without having to spend your last dollar.

GORDON: And you might be able to help them with a basic little package once we understand where you're at and what you're trying to do.

VELSHI: Randy may soon get a chance to test that theory. 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 racecars into rolling billboards.

GORDON: Right here you have GMAC, Pepsi, Dupont, and Citgo. On Site, Napa, Snap On. Budweiser.

BAKER: I would take one out of ten.

VELSHI: The second possibility, corporate clients. Fortune 500's CEOs regularly make their executives share everything, from golf games to learning how to drive an armored tank together. It is called corporate team building and companies spend millions of dollars a year on it. 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 racecars.

GORDON: 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.

BAKER: And as you can see we haven't spent a lot of money.

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. Buying land to build his own half-mile concrete oval simply isn't feasible. That means spending between $3,500 and $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.

BAKER: I'm the small guy on the list. So, I get what's left. I get crumbs, the crappy days of summer when it's raining in the afternoon and only get track dates at night.

VELSHI: The mentor's 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 added in, he's barely raking in enough to break even. How many people are we talking about? What makes a class profitable? What would you love to see on a regular basis? BAKER: Fifty people a day.

VELSHI: Is that once a week?

BAKER: Every other week.

VELSHI: Every other week?

BAKER: Three days of 50 people. Which would be 150 people per weekend.

VELSHI: It's an optimistic target, one to strive for in the coming years, but to get to that point, Randy has to work on his image.

STORY: This is an image-based sport. It's all about image. It's all about perception.

VELSHI: 4:00, 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.

Still get that much of a kick out of getting into one of these cars?

GORDON: Some days I get a kick out of and some days.

VELSHI: You get a kick out of?

GORDON: I get a kick out of it.

VELSHI: Up next day two, Robby surprises Randy by bringing a very special student to SpeedTech. And the mentor ruffles some feathers.

BAKER: Can I take him for a ride?

UNIDENTIFIED MALE: Yes.

BAKER: Do it your way. Do it your way.

VELSHI: Tension at the track, it's all-ahead on THE TURNAROUND.

(COMMERCIAL BREAK)

VELSHI: This is day two of THE TURNAROUND here in North Carolina. Yesterday, we introduced a local yesterday; we introduced a local racing school owner to NASCAR driver, Robby Gordon, who is 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 lie on, Robby Gordon, could help him out with anything.

8:30 a.m. Randy and his small staff are loading up racecars to take to a rental track about 20 minutes away. These are SpeedTech's finest assets. More than a dozen authentic NASCAR racecars, each one worth at least $85,000 all in mint condition. Many of these three-ton marvels have been piloted by legendary champions, including Dale Earnhardt, Sr., and 2005 Daytona champ, Jeff Gordon. On day one, while Robby Gordon assessed the untapped money making potential of Randy's school, 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 sponsorship side, we've been really good at.

BAKER: I'm still unclear exactly what we're going to get from it.

VELSHI: But it's a new day and this morning, despite being puzzled by what THE TURNAROUND could bring, Randy is intrigued.

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: 11:00 am, 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.

BAKER: I don't care who you are. You can be the best racecar driver in the world. You come to my school, you're going to sit down in the classroom and we're going to tell you the basics. We're not going to let you get in these cars and hurt yourself or someone else.

VELSHI: An instructor begins the classroom orientation.

UNIDENTIFIED MALE: 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 has brought along a surprise guest. While Robby Gordon and his team are going to be taking a close look at how this business runs, one of the themes that seems to be develop something. Is that Randy Baker wants to develop closer relationships with clients and possibly sponsors. One of Robby Gordon's corporate sponsors is in this lesson right now. He's getting a sense of how this school works.

KEITH NEWMAN, MARKETING DIRECTOR FOR JIM BEAM: I'm Keith Newman, the marketing director for Jim Beam.

GORDON: I don't think he was prepared for Keith to be there with me.

BAKER: Low and behold did he not bring a sponsor with him.

GORDON: I wanted to see how he reacted under 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 MotorSports 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.

NEWMAN: We're trying to entertain customers for three, four days a lot of times. There's a lot of down time. This would be a great way to get 30, 40, 50 guys out to a track, give them an experience they'll never forget and will also make them appreciate more of what Robby does on Sunday.

There are a lot of schools out there. He has to find his unique point of difference and really drive that home.

VELSHI: But there's hope?

NEWMAN: Yes absolutely.

UNIDENTIFIED MALE: Any time I leave the groove after running on the track, my hand goes up. I want to make sure nobody runs over me.

VELSHI: Experienced driver that he is, Robby is following the lesson easily and he's impressed.

GORDON: They did go through the basic fundamentals, safety of the car, how to start the car, how to let the clutch out, and the car being a racecar, not a streetcar. 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.

NEWMAN: It is a bit of a fine line between intimidating and being knowledgeable. For him, it's so second nature it doesn't dawn on him the people he's talking to won't understand the terminology.

BAKER: Get in there and try not to saw the wheel. Pass on straight ways only. Slow car moves to the inside. Pass is done in the groove of the outside, OK? You're not going to hurry the situation by tucking up under 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 racecar. 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 we've been doing schools 25 years. 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 he might want to change things and, well, I didn't think that was what we needed to do.

GORDON: He knows Corporate America is where his bread and butter are. 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 get more serious.

GORDON: I feel like he has to make a choice.

VELSHI: Next on THE TURNAROUND.

(COMMERCIAL BREAK)

KAYE: I'm Randi Kaye at the CNN Center in Atlanta. THE TURNAROUND with Ali Velshi continues in a moment but first a check of headlines now in the news.

Cemeteries in war memorials around the nations capital are strewn with flags, flowers and wreaths. They honor the country's war dead on this Memorial Day weekend. The commander in chief of the Veterans of Foreign Wars says citizens have a duty to remember those who died in uniform.

An amber alert has been issued in Missouri for a missing 3-year- old boy. The child was last seen Friday night at his grandmother's home. He disappeared along with his dog, the black Labrador. Police still aren't sure if the boy wandered off or was abducted.

The 57-hour crane stand off in Atlanta comes to an end with a sharp sting of a taser. Murder suspect Carl Edward Rowland was taken into custody shortly after midnight last night. We'll show you how it all went down on "CNN Live Saturday" coming up in about half an hour.

More news coming up in 30 minutes. THE TURNAROUND with Ali Velshi continues right now.

VELSHI: A professional track under a clear, North Carolina sky. It's 1:00 on day two of this turn around. The tents are up. The flags are ready SpeedTech racing school owner, Randy Baker is in his element. His mentor, racecar driver and owner, Robby Gordon, is also preparing to have fun. But also to give business feedback.

Robby has brought along one of his sponsor's, 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.

GORDON: 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 what he's looking for?

R. BAKER: Yes.

GORDON: Do it your own way. Sorry, do it your own way.

VELSHI: It's an awkward moment; one that reviews 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. After getting Keith settled behind the wheel, it's become clear again that Randy is not taking full advantage of SpeedTech's finest assets.

R. BAKER: These cars are full blown Netell cut cars, the only big difference from these and a race ready car is about 200 horsepower.

GORDON: The customer, students actually get an opportunity to drive a Dale Earnhardt, Jr car a Dale Earnhardt Sr car.

VELSHI: Robby revs up number three, the racecar NASCAR legend Dale Earnhardt Sr., once powered around the 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 can 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! That was a lot of fun.

VELSHI: Once Keith is back in his street clothes, he's ready to weigh in with his observations.

R. BAKER: You seem like you've had a nice time.

NEUMANN: It's a great experience. The product is really strong. It's a matter of finding the right groups to sell it to and market it to make it work.

VELSHI: 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 that's never been in that car before, I'm not sure what he's telling me to do. You were talking about push and pull going into turns. If he had said, look, the banking will help you pull down the track, so you have to steer up it, that would have made it easier for me to get it that's a pretty big gap he has to transcend 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.

NEUMAN: A lot of guys are out there three, four days entertaining clients and guests. There's only so much golf, dinners and types of things you can do. 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. Are you changing your view of marketing? It's a mixed view. You, like many people.

R. BAKER: I've had bad experiences in, say, marketing and things like that. Yes, I'm ready for a change. To see the things that these guys have done, Robby has accomplished in a short amount of time, it's very encouraging.

VELSHI: And as the sunsets, Randy's crew has one final stop on this second evening of the turn around. They've been invited to the headquarters of Robby Gordon Motorsports for a meeting and 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: Sweet. Nice and clean.

VELSHI: The results of Robby's aggressive marketing are everywhere. Randy's wheels are turning as his crew sits with his 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. We would like you 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 small amount of time.

VELSHI: Now you've taken a look at how Randy Baker runs his driving school. What's your impression of the things he can change?

STORY: It's a market-driven sport. Randy has to evaluate his own misgivings about the concepts of marketing. He has a great product. He just has to let people know about it.

VELSHI: Day two has been a long one here in North Carolina. But as everyone goes home for the night, they agree upon 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. If he gets past it by morning, he might have a chance at a turn around.

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.

(COMMERCIAL BREAK)

VELSHI: Sunrise in the Carolinas, and a new opportunity for Randy Baker to give new life to his financially struggling racing school.

R. BAKER: I'm not ready to give up on the business by any stretch.

M. BAKER: He's such a good guy. He really is and he struggles 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 racecar 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 turn around, Robby's team has also been urging Randy to improve his school's customer service to make it a better experience for clients. So, he has to spend some money on marketing, spend some money to get these clients.

STORY: It needs to be a nice, big, white tent. There are chafing dishes out; there is a nice breakfast. Treat them like they're special. VELSHI: 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 sort of dumb it down a little bit so that the average person that doesn't have the racing experience will still the get the point.

VELSHI: For two days, Randy has resisted changing his ways and his old fashion racers mind set.

R. BAKER: I've 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 make us what we are compared to the other competition in our industry.

VELSHI: So, Randy is 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 of hats here at SpeedTech, I do what needs to be done. I build relationship with his people. I'll clean the cars.

VELSHI: He's also in charge of any marketing SpeedTech does, which has mainly happened in cyber space.

The word has to get out more.

BURKE: I've been focusing on the Web and trying to get good rankings, for instance, on Google.

VELSHI: Realizing that using the Internet alone is not an adequate marketing strategy, the SpeedTech team gets down to business.

R. BAKER: We have a lot of differences between ourselves and the competition that we know of.

BURKE: Equipment.

M. BAKER: Our southern service.

R. BAKER: Yes, the southern house, we make them feel warm, comfortable.

VELSHI: As the team brain storms, they get more excited.

R. BAKER: You know we're close, but, man if we can just get a little jump start, 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 into 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 plans. They're now ready to make the presentation at the headquarters of Robby Gordon MotorSports in the neighboring town of Charlotte.

R. BAKER: We have a little ride ahead of us, I mean we are probably talking -- but this is pretty much our plan. I'm ready.

M. BAKER: Yes.

R. BAKER: I'm ready for this. Let's do it.

M. BAKER: Let's go.

R. BAKER: Wild in 2005.

BURKE: That's right.

R. BAKER: Let me grab that phone real quick.

VELSHI: Just as their meeting comes to a close, SpeedTech's phone rings. It's a customer interested in giving a racing class as a gift to the friend south Florida.

NEUMAN: What's the date? I will send you out this confirmation and it will 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 has been searching for. The ones that will get a lot more of those customers calling in.

I'm going to ask you all 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 on the right track. I'm already excited about everything. What we've done and had a good time thus far. It can only get better.

VELSHI: You sound pumped. I can feel it.

R. BAKER: Yes there's energy.

VELSHI: Coming up, a presentation before the mentors in the boardroom at Robby Gordon MotorSports.

GORDON: There are a lot of things you left on the table you could have explained to him before he got in that racecar.

VELSHI: Plus Randy comes face to face with his worst nightmare. Next of THE TURNAROUND.

(COMMERCIAL BREAK)

VELSHI: 4:15 p.m., Randy Baker and his team wait nervously.

R. BAKER: I went into it the first day I was apprehensive. The second day, I was still apprehensive. My 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 owner's worst nightmare, marketers.

GORDON: We brought in two marketing companies that we currently work with.

STORY: Two friends of our Kirby Boone with Sports & Promotions and Brian Barr with Keystone Marketing.

VELSHI: These pros hope to convince Randy once and for all that marketing isn't always a swindle.

You guys got some ideas?

UNIDENTIFIED MALE: Uh-huh.

KIRBY BOONE, PRESIDENT, SPORTS & PROMOTIONS, INC: 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 it out to the marketplace. He needs to kind of define his business.

UNIDENTIFIED FEMALE: You can come on back with me.

VELSHI: 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.

GORDON: First and foremost, we're interested to hear of the five points or more you guys worked on that's the differentiating piece of your business as opposed to your competition.

VELSHI: Randy gets started. No handout, no visuals. Just talking. R. BAKER: The quality of the equipment is probably the top end of the school industry. We have a clean record on our driving record, our accident record is good. That's one of the things we seem to pride ourselves 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 like that, we provide that for them and no charge for them at no charge.

I make it a point to be there, hands on to make sure things are done properly. We do a program where we allow passing and it's not a follow the leader situation.

VELSHI: Randy is finished, but Robby was looking for more.

GORDON: Homework needs a little bit of work. Expected at least a 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, serve them lunch.

VELSHI: The mentor reminds Randy of his Jim Beam sponsors complaint on day two-customer communication.

GORDON: There are a lot of things you guys could have explained to him before he got in the racecar. He climbed in the car not really prepared to climb in the car.

VELSHI: Despite Robby's suggestions, there is no doubt in this boardroom. SpeedTech's product is good. 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.

We manage all of Proctor and Gamble sports programs, and that includes all their NASCAR programs from Folger's, Crisco, and then to Tide. Now it has expanded into a number of other brands like Old Spice, Mr. Clean.

VELSHI: These guys live and breathe NASCAR every day. To them, Randy's marketing weakness is obvious.

BARR: 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 program already. I mean Dale Earnhardt's car is a real Dale Earnhardt car. There's some excitement right there.

BARR: How cool is that a guy can come off the street and drive -- that's a unique experience for your company.

GORDON: That's a secret nobody knows about. You have a father that has won championship, a brother that's won the Daytona 500. I think that name is more powerful than the name you have right now.

UNIDENTIFIED MALE: You have a great family history and you should capitalize on that.

BARR: Make that connection, it is all about that emotional connection in Motorsports.

GORDON: You grew up in the sport; you know all the old stories. They're fanatical.

STORY: We talk about the heritage, take advantage of it.

VELSHI: Randy seems to be buying in, but his old distrust of marketers resurfaces.

R. BAKER: When you said marketing, it was like --

BARR: Just strike the word marketing from your repertoire. It's more than that. It's alliances and partnerships to get your product and your assets and the uniqueness you have out in front of corporate America. Those are folks we touch every day in the garage. We're all the time looking for our clients, new ideas and new ways to give their customers a unique experience that they cannot get anywhere else.

You said you've paid good money out and gotten 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.

NEUMANN: This kind of marketing won't cost you any money.

BARR: Right.

VELSHI: Final after three days and plenty of resistance, it clicks. Randy realizes he can market SpeedTech without spending a fortune.

R. BAKER: This is very enlightening to me to be able to see how you guys work together.

GORDON: What do you think?

R. BAKER: You are, by definition, a man who is pessimistic about marketing.

GORDON: But I'm smiling.

VELSHI: You are smiling.

R. BAKER: I'm smiling, and that's a good thing.

VELSHI: You're smiling particularly big, Melissa. M. BAKER: Well, I'm probably the one that -- I know I was, I try today get randy to these marketing companies and try to get him listen and it's nice to have him smiling and optimistic about developing these kind of relationships.

GORDON: That's what you need to do.

VELSHI: 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.

GORDON: Great opportunity to come over here and get to meet you.

R. BAKER: 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. Maybe you don't want to take advice from somebody else.

GORDON: This racing industry has changed a lot in the last ten years.

R. BAKER: I'm ready to change with it.

GORDON: Excellent.

R. BAKER: You guys have helped me.

GORDON: Thanks. Good luck with your job.

R. BAKER: Thank you.

GORDON: Take care.

R. BAKER: I guess you can teach old dog new tricks. I just feel like I'm getting back into the groove. It's almost like coming home again.

VELSHI: 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 the marketing. Randy Baker has taken a long time to come around to that conclusion. The last three days, he seems to have made his peace with it. He's rolling toward a turn around.

In Charlotte, I'm Ali Velshi. See you next time.

(COMMERCIAL BREAK)

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