RAM Racing CEO Steve Ginsburg, the founder of the Hot Chocolate 15K/5K race series, is a thoughtful businessman with a background in global manufacturing and investment banking. His passion for the industry and knowledge of how to scale best practices has made the Hot Chocolate Series a runaway success
(Editor’s note: I spent an hour this week speaking with Steve Ginsburg. Then I spent four hours transcribing what we’d talked about. I ended up with 12 pages of detailed notes. Next, I went to the vending machine for some chocolate. Steve is inspiring like that.)
Steve Ginsburg has been working for the last 16 years to build a multi-tiered business in the running industry. He started out owning a couple of running stores in the Chicago area. Then he started a race. That became a race series – you’ve probably heard of it. It’s the one with the chocolate. High quality hot chocolate, to be precise. Served to you after finishing a 15K or 5K at the perfect temperature in a souvenir plastic mug.
You cool down from your run on a brisk winter morning with the mug of chocolate warming you up and aiding your recovery. Sounds pretty great, right? But it’s the sourcing of those items, including the mugs and the chocolate, where the story becomes all about business.
Natonwide Hot Chocolate
“We are able to produce and afford this very high quality chocolate because I’m buying chocolate for over 200,000 runners,” Ginsburg explained. “With regards to our amazing goody bags, it is to our advantage that my previous career was in manufacturing, so I am able to leverage those relationships for sourcing. We give them away, and they’re worth more than the price that runners pay for our races.”
The Hot Chocolate series, which kicked of Oct. 2 in Denver, will include 14 races this year, with additional events in Chicago; Columbus, Ohio; Scottsdale, Ariz.; St. Louis; San Francisco; Atlanta; Dallas; Nashville; Las Vegas; Seattle; San Diego; Philadelphia; and Minneapolis. Find a full schedule here.
But what’s most interesting about the series is not the locations, or the chocolate (4,000 pounds per race) or the goody bag, although those things are all very popular with participants. What’s most interesting about the Hot Chocolate series is that while other events have seen drop-offs in registration this year and last, Hot Chocolate’s numbers are up – in some cases way up. Four of the cities listed above have already posted gains of over 30 percent.
Ginsburg attributes the growth to a variety of factors:
- A relatively low race entry fee, ranging between $34 to $79, depending on the distance and when in the registration cycle you pay.
- The quality of the experience, including the goody bag – valued at around $100, chocolate, and full race day event experience.
- Locations of the events, carefully selected cities with large running populations. The typical Hot Chocolate runner is a working mom, running for fitness, with a two-earner household income.
- The RAM Racing team, a full service operation that parachutes in 30-40 employees for everything from packet pickup to customer service to timing to set-up to troubleshooting on race day.
“I had witnessed some of the races that are in multiple cities utilize third parties to put on their events in different markets, and they would make the same mistake twice. We work with people on the ground, but we don’t have anybody else directing our races. Our race directors are there, our customer service team, and our technology team. It’s a traveling circus, but it maintains the standards we have set for our events,” Ginsburg said.
A Full Business Platform
Ginsburg no longer owns the Chicago-area running stores – he traded them to the owner of Chicago’s Fleet Feet franchises in exchange for Chicago- area races.
Today, RAM Races owns and operates the Hot Chocolate series and over a dozen other area road races. EnMotive, the company’s technology division, provides timing, registration, marketing, photography and communications management in a single solution for its own events and contracts out to other events as well while RAM Racing Productions handles race management, catering services and equipment needs for third party races.
This spring, Ginsburg acquired Gault Management, a Michigan-based timing industry pioneer founded by Anne and John Gault. As a result of the acquisition, in 2017 RAM Racing Productions will time events with a total of over 1 million participants.
“What Anne and John had succeeded in was what I had been working on, which was building a business founded on quality, service and integrity. That really defines Anne and John Gault, and it lined up with what RAM Racing had become so it was a perfect match,” Ginsburg explained.
It also added a robust timing operation to the EnMotive platform, which had been in progress since Ginsburg started his first race. He believes that races can streamline their operations through smarter technology, and has developed numerous applications within the platform to do so. For example, one module automates communication with race day volunteers, so that coordinators don’t have to spend countless hours writing duplicate emails to dozens of people.
“The idea here is to be able to merge the registration business with the timing business, photography business and the marketing business, and bring it all under the EnMotive platform. We’re able to offer a service no one I know has been able to do yet, and we’re very excited about that.”
A Funnel and the Future
With more than 50 employees now part of the RAM team, Ginsburg has turned his focus beyond building his business to the big picture for the running industry.
“I think we’ve gotten lucky to get to our size, and I think we have been able to exploit our economies of scale,” Ginsburg said. “I really have turned a lot of my attention toward helping the running community as a whole.”
And that means setting his sights back on the place where his journey into the running business began: at running specialty stores. Ginsburg believes that one of the consequences of the now-fading MOB event fad was a shift away from being properly fitted by an expert for a first pair of running shoes.
“It disrupted the approach of going to your local running store for a pair of nice shoes, and instead going to Target or Kmart for shoes because they’re going to throw color on them, or you’re going to run through the mud and they will get dirty,” he explained. Training programs and traditional road races were also de-emphasized.
“The new funnel of runners got detoured onto this other path. I want to work to find a way to get the new funnel of runners back on track.”
He acknowledges that there is plenty of competition, especially from online shopping, but believes that consumers ultimately want to try on a pair of new trainers, or check out the lightness and softness of the latest technical t-shirt.
“Now that I don’t own the running stores, I think it is fair for me to say this: I think we have to get the new runner back into specialty stores and be fitted for a pair of shoes,” Ginsburg said.
The goal connects to his overall view of the sport.
“Running is the ultimate freedom. You can run anywhere, at any time, in any socioeconomic environment. But I believe there’s one caveat to that. The caveat is that you need to spend a little time being fit properly for a pair of shoes, and if you’re going to run more often and longer distances, you should get trained and learn how to run those kind of distances. Then you’re ready to race, and races are the celebration of that freedom.”
Continuing the Conversation
Ginsburg hit the industry conference circuit this year to participate and listen to dialogue about the state of the sport, and will continue to do so in 2017.
“I am trying to figure out how we benefit the running community as a whole. If I see a big race down in numbers, I want to figure out how to help that race. If any given race is down, that means other races are down. And if those races are down, maybe the running specialty stores are losing business. If we can improve any one of those key components, we all benefit,” he said.
“I am personally talking to the leaders of our industry, trying to work this out, but I would ask anyone with ideas to join the conversation. My line is always open to anybody who wants to talk about these things.”