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The path to high-ticket sponsorship sales: A case study of $10 million in sponsorship transactions

By Chris Baylis

Over the last two years, I have worked on more than $10 million in event sponsorship and facility naming rights, major campaigns, multi-year agreements and large-scale activations for charities, associations, festivals and several other sponsorship seekers across Canada and the United States.

What I suspected, and what these successes confirmed for me, is that there are dollars out there that brands are more than willing to spend in support of an association’s programs and events, but the ubiquitous, tiered “gold, silver, bronze” sponsorship prospectus is not the most effective way to attract those dollars.  Like any effective marketing endeavour, the pitch must be tailor-made for each target sponsor. While a cookie-cutter approach isn’t the way to go, there are some clearly defined steps that can help support securing the funding that will keep your mission on track.

Every one of my negotiations over the last two years required the following stages:

•   Several well-defined audience segments

•   Clearly-defined goals for each audience segment

•   Agreed upon measurements for those goals

•   Complex and highly interactive experiences designed to connect the sponsor to their audience

•   A third-party valuation proving market value of the opportunities;

•   Quarterly reporting on benchmarks

    Let’s take a look at each of these stages.

Several Well-Defined Audience Segments

The most powerful thing you have to offer prospective sponsors is your audience. The problem that I see repeatedly is that sponsorship seekers do a poor job defining their audience, settling for broad descriptions like “the middle class” or “families” or “people who like/care about our cause/org/event/team.”

None of these audience segments are specifically defined enough to trigger a sponsorship investment. Every sponsorship seeker should strive to develop no less than 30 data points on their audience and look to develop multiple audience segments within their database, conference or event.

In defining your data points, think about unique characteristics for each audience segment. Some of the things that sponsors consistently ask for include:

•   Demographics

•   Psychographics

•   Geographic spread

•   Brand preference and loyalty across multiple verticals;

•   Planned purchases in the next 18 months

•   Job titles and industries

•   Decision making authority

•   How responsive the audience is (open rates, clickthrough rates, social media engagement etc.)

There are several sources for this data, but I have had the most success using surveys, social media, focus groups and google analytics to develop what is needed to bring a property to market.

Sponsorship Activation and Leverage

This stage in the process of developing sponsorship opportunities includes the following three steps:

•   Complex and highly interactive experiences designed to connect the sponsor to their audience

•   Clearly defined goals for each audience

•   Agreed upon measures for those goals

Most sponsorship seekers are focused on logo placement as the exclusive expression of sponsorship, perhaps with a few social media mentions thrown in for good measure. This is not in line with the expectations of sponsors and does not take full advantage of the power of sponsorship marketing.

The only outcome of “logo placement” is “awareness” and very few sponsors have an exclusive goal of increased brand awareness. Brands do not want their target audience to simply “be aware” of their brand. They want their target market to engage with their brand, take an action and move through the sales process, ending with a highly measurable (and valuable) action based on the sponsor’s needs. Discuss ideas with your prospective sponsor to find out what activations might be possible in engaging them with their audience. Once you have landed on an idea that works for you both, define the goals and how you might measure success.

Done well, these activations add tremendous value to the audience experience and produce results that sponsors are happy to pay a significant premium for. Long gone are the days of logos on signs or forcing your audience to listen to yet another 30 second speech from the stage as the main focus of a sponsorship agreement.

When in doubt, give your audience more of what they want using sponsorship, and everyone will walk away happy.

A Valuation Proving Market Value

Once you have identified your audience, determined interest from a brand based on that audience and then developed activation ideas with your prospect, you are ready for a valuation.

Most, if not all, major sponsorship opportunities require a third-party valuation before they can proceed. High six-figure and seven-figure sponsorship opportunities are complex and the stakes are high, which is why brands look to an independent valuation process. That isn’t to say that you cannot do a valuation yourself, but most find it easier to engage external support.

Determining the value of your sponsorship opportunities is without a doubt the thing that strikes fear into the hearts of even the toughest sponsorship sales pro. Make no mistake, your opportunity’s value is as unique as your fingerprint and is something you create for your property based on your unique situation, mix of assets, brand value and audience segments.

Whether or not you choose a “do-it-yourself” approach or engage external support to conduct a valuation, this stage is non-negotiable. It must be done. If you want to grow your sponsorship program, close multi-year agreements, sell major naming rights, presenting rights or develop big ticket activations, you need to conduct a valuation to be taken seriously by a brand and to protect yourself from undervaluing your opportunities.

Quarterly Reporting on Benchmarks

The final step in negotiating any significant sponsorship opportunities, whether they be naming rights, presenting rights, large scale activations or multi-year agreements is determining a reporting structure with benchmarks, so that both parties can monitor progress.

Once you know which audience segments are of interest to your sponsors, which actions they want those audiences to take and what they consider a successful outcome, setting up benchmarks is very simple (achieving those benchmarks is not, but that’s the fun of sponsorship!).

I do not recommend waiting until after the campaign or event to produce your first fulfillment report. This approach is acceptable for smaller sponsorship agreements but not for major sponsorship opportunities. If you wait until after all of the delivery has taken place, you lose the opportunity to correct any mistakes or missed opportunities.

If your agreed-upon goals are, for example, to send web traffic to a landing page, have people test drive cars, download and use a coupon or complete some other action, it is essential that you set up mechanisms to track these conversions and report back to your sponsors about your progress. Typically, reporting goes both ways, where sponsors are held accountable for their deliverables as well, giving both parties the opportunity to adjust goals as needed and increase effort in certain areas of the partnership to ensure success.

Regular reporting and the fulfillment report in general are great opportunities to keep your sponsor happy, convert them to a multi-year agreement or even upsell them throughout the course of the partnership.

What These Negotiations Did NOT Include

There is far too much emphasis on the role of sales material, logo placement and “mission alignment” in the sponsorship space. Certainly, these things can have an impact on the overall success of sponsorship negotiations, but emphasis has to remain on the goals of the brand and the needs of the audience above all.

It is important to note that the negotiations and sponsorship sales that make up this case study and best practice guide did not include the following:

•   Stock sponsorship packages (in fact, none of them even used sponsorship packages)

•   Logo placement as the main focus

•   “The general public” or “middle class families” or “everyone”

•   Mission, vision, impact measures or corporate philanthropy

•   Companies “giving money” because they have so much of it

Sponsorship is a marketing discipline and, in my experience, those sponsorship seekers who treat it like a marketing discipline have the most success.

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