This was a question I came across in the blogosphere this week. To be fair, the person who asked wasn’t that blunt, but had definitely seen a lot of headaches from sponsors who didn’t pay their fees, didn’t do what they had promised, and generally bullied the event. After a nightmare like that, it seems perfectly a perfectly logical question to ask!

In that situation, the answer is a simple: Those sponsors were not worth the headaches.

Why seek sponsorship?

Before looking at counting the cost of having sponsors, it’s probably worth going through why you would want sponsorship in the first place.

The downside to having sponsorship is that raising and servicing it is a lot of work and some sponsors can be real headaches (thankfully, rare). The upside is that most sponsors are great, and what they bring to properties is multifaceted and well worth the effort to seek sponsorship and do it well:

• Increase in revenue
• Enhancement of the event experience to your audience through sponsor leverage activities
• Ability to achieve your own marketing goals through strong sponsor leverage
• Introduction of your event to the sponsor’s target market, which may be larger than your own reach (or what your marketing budget will cover)
• Provision of infrastructure, expertise, merchandise, and services that will help you run your event

There is plenty more that a sponsor can bring to the table. The key is knowing how to structure it so it’s win-win-win – you win, the sponsor wins, the target market wins. There’s plenty more on win-win-win all over this blog.

Has it been worth it?

If you’re in the run-up to your event, or maybe it’s just happened, and you are feeling used and abused by your sponsors, that’s not good. The thing is, sponsorship is hard work, so feeling some degree of sponsor fatigue is normal and will pass once you’ve had a chance to decompress. On the other hand, some sponsors really are users and abusers. The trick is, figuring out which category you’re in.

To find out whether a given sponsor – or your whole sponsorship program – has been worth having or is just a toxic drain, you should ask yourself these questions:

Contract

• Did you have a contract or comprehensive letter agreement in place, signed by both parties and outlining all rights, responsibilities, and payments?
• Did the sponsor pay the full contracted fee, with all instalments paid reasonably on time?
• Did the sponsor comply with guidelines you set forth regarding the use of your intellectual property or benefits, or their conduct on-site?
• If the sponsor was denied permission to carry out an activity, did they comply?

Behaviour

• Did the sponsor behave in a professional, respectful manner toward you and your colleagues at all times?
• Did the sponsor make unreasonable demands? For instance, they demanded that you change your event or program in a way that suited them, but disadvantaged your organisation or audience?
• Did the sponsor have entitlement issues? For instance, they were constantly requesting more benefits than contracted?
• Did the sponsor try to bully you into doing something you were not obliged, nor were compelled, to do?

Cost

• Did the cost of servicing exceed 10% of the contracted fee?

The cost of servicing is not the cost of delivering contracted benefits, but the cost of providing added value benefits and support to the sponsor, for which you should budget 10% and build it into the price.

Revenue

• Did the cost of delivering the contracted and added value benefits exceed one-third of the fee charged? One-half?

As a rule of thumb, you should endeavour to build sponsorship packages that are worth to the sponsor at least three times what it costs to deliver and service them. This is NOT the exact amount you should charge, but a baseline you can use as a starting point to ensure a sponsorship is going to be worth the time and effort put in. If you start at that baseline, and whether through negotiation or other market factors, the price falls to only twice the cost of delivery – so half of your revenue is going toward making the sponsorship itself happen – you are at the point where even the perfect sponsor may not be worth having.

Sponsor added value

• Did the sponsor undertake any leverage activities that extended your marketing plan? An example would be using your event in their advertising, promotions, or other marketing in the lead-up to the event.

It’s not looking good… Now what?

Some of these are not drop-dead deal-breakers – it is possible to have a great sponsor who doesn’t extend your marketing plan, for instance. But as you go through this list, a clear picture of the real value of a sponsor or sponsorship program should appear. If the picture is bad, I’ve got a few tips.

Have a contract

If everything goes pear-shaped and you never see a cent from a sponsor, will you miss the money? If so, you need either a comprehensive letter agreement or a contract in place, and it needs to be done by a lawyer. This not only protects all parties, it outlines expectations in black and white. Gray areas are the enemy of sponsorship. (Concerned about the cost? You will find an agreement pro forma in The Sponsorship Seeker’s Toolkit 3^rd Edition that will make the process much easier and cheaper.)

Hold up your end of the bargain

Before you can improve your sponsorship situation, you need to ensure you are delivering absolutely everything that your sponsors are entitled to. Making sponsors abide by a contract will not work if you’re breaching it, too.

Take a stand

Do not ever let a sponsor bully or take advantage of you. Ever. If a sponsor is out of line and (important) you have delivered everything you’ve promised, they don’t have a leg to stand on. Just tell them “no”. If they try to bully you – and some will – you need to be prepared to get a lawyer involved.

This is particularly important if you have more than one sponsor taking advantage. Make an example of the first one that does the wrong thing. Chances are, they will pull their heads in before you get far into the process, and it shows all of your sponsors that you do indeed have a spine.

Dealing with nightmare sponsors is never fun, but as those self-help gurus seem so fond of saying, you teach people how to treat you. If you let your sponsors push you around, pay months late, or treat you disrespectfully, many of them will.

You are peers – equals – and what you are offering has real value to their brands. If they can’t see that, dump them. Life is too short for that crap.

After hundreds of thousands of downloads, I thought it was high time to give my white papers a format that is as professional and well thought-out as I hope the content is. While I was at it, I also did some updates and revisions.

Want to have a look? The download links are below. All are in PDF form and most are around 250kb. “Last Generation Sponsorship” is around 1mb, as it has a lot of diagrams.

You are welcome to share these documents around, but please do not link directly to the PDF download (called “deep linking”) without my permission. You are more than welcome to link to this blog or our Sponsorship Articles and Tools page.

Sponsorship white papers

• “Last Generation Sponsorship” – My blockbuster white paper on best practice sponsorship, downloaded almost 400,000 times, reprinted in many, many industry publications in eight languages. Download it for yourself. Download it for your partners. Download it for your boss, board, or colleague. This article is guaranteed to get anyone thinking more strategically about sponsorship!
• “Sponsorship in a Scary Economy” – A very topical paper with practical skills for both sponsors and sponsorship seekers.
• “Survival Guide for the New Sponsorship” – Practical things you can do to shift your organisation’s approach into best-practice.
• “Don’t Go to Another Sponsorship Conference Until You Read This” – All sponsorship conferences are NOT created equal. This great guide will help you sort the good from the bad (and make organisers of the bad ones really miserable, if you want to).
• “Sponsorship and the Public Sector” – A wake-up call for all government sponsorship seekers.
• “Top Ten Tips for Sponsorship Seekers” – Short and sharp, this is a must read for sponsorship seekers, particularly if you’re new to the game.
• “What Every CMO Needs to Know About Sponsorship” – Aimed at corporate chief marketing officers, this white paper offers advice about the high-level decisions and directives that will impact on sponsorship results.

Sponsorship cheat sheets

• “Cheat Sheet: Questions to Ask Before You Hire a Sponsorship Broker” - This is a compilation of questions that will allow great brokers to shine, expose the shonks, and clarify the weaknesses and strengths of all the brokers in between.
• “Cheat Sheet: Marketing Terms a Sponsorship Seeker Must Know” – This is a list of some of the most common, but confusing, terms that sponsors use when describing their objectives and target markets. If you want to ensure you know what sponsors are talking about, be sure you know all of them!

Please, tell me what you think!

Have you read any of these white papers or cheat sheets? Got a comment? Please, add your comments below. I’d love to see them!

Please note, comments are moderated, but we get through them quite quickly. Spammers just get sneakier and sneakier!

I have recently started getting involved in discussion groups on linked in and wow, what a lot of great questions there are! Today, I addressed a question about the top five things a sponsorship seeker should bring to a presentation to a sponsor.

Before I found the question, many people had answered, but those answers had a lot more to do with how sponsorship has been sold in the past than how it should be sold, and how the world’s most successful sponsorship seekers sell it. And when I talk about the world’s most successful, I’m not talking about the biggest. No, I’m talking about the sponsorship seekers who increase their sponsorship year-on-year, even in really tough years. I’m talking about sponsorship seekers who deepen and extend their relationships with sponsors, until they become one of the highest-performing sponsorships in those sponsors’ portfolios. I’m talking about sponsorship seekers who engender such fierce loyalty and support from their sponsors that they actively advocate the property to other sponsors.

If that’s what you want, you need to drop all the crap about “impression rates” and ROI. Impressions and visibility as sales tools are about 20 years out of date. And as a sponsorship seeker, you are in no position to be able to tell a sponsor what the sponsor’s returns are against their many and varied objectives. While you’re at it, drop all the overt, self-important hoo-ha about how great or needy or worthy you are. You’re selling. It’s about the sponsor’s need, not your need or your ego.

That said, this is what I recommend you bring/discuss/incorporate into your offer:

1.

Evidence that you understand the sponsor’s brand (attributes, values, personality), target markets (psychographic more than demographic), and objectives. This is actually quite easy to get, if you know where to look.

2.

Creative ideas for leverage. Your proposal must be anchored on creative ideas you’ve come up with for them to leverage the sponsorship. Put yourself in their shoes. If you could do ANYTHING what would you do with the sponsorship. The best several ideas will form the core of your proposal.

3.

Examples of how your other sponsors have achieved a commercial return, defined as changing the perceptions and/or behaviours of their target markets. This can include financial data, but much of this can be measured in other ways, such as increasing propensity to try or trust. This shows that you know how to be a partner and know it’s not about you and your need.

4.

Market research from your most recent event. Bonus points if you have asked what the three best and three worst things are about the event, as it shows you are a) asking the right questions; and b) have some opportunities for your sponsor to amplify the good stuff and fix the bad stuff, creating added value for the audience.

5.

Short case studies about how other similar sponsors have done amazing, creative things around sponsorships like this. This shows how astute you are and gives the sponsor a high comfort level about working with you. Again, this information is not hard to find, but you have to know where to look.

If you need a rundown on the whole sponsorship sales and servicing process, complete with numerous checklists, brainstorming exercises, and templates, you may want to get hold of my book, The Sponsorship Seeker’s Toolkit 3rd Edition.

I’ve worked with a number of corporate clients recently, as they’ve been negotiating major partnerships with teams and sportspeople. They have all embarked on these sponsorships backed by strong strategy and have been prepared to leverage the investments across their marketing and business channels.

Sounds good, right? On closer examination of the proposal, however, every one of them required an additional investment in the six-figures (sometimes well into the six figures) to sponsor the sports organisation’s community foundation. The properties called it “leverage”, but all they offered were a few logos on things, and not one was even remotely interested in customising the offer, so it delivered on the sponsor’s community objectives.

I have no problem with teams putting funds into their community programs. Clearly, this is good for the team and the community and the right thing to do. My problem is when teams and sportspeople provide a sponsorship proposal, get a sponsor on the hook, then try to bolt on this extra chunk of revenue, attempting to disguise it as a leverage opportunity. It’s not. It’s just a revenue grab – an attempt to get sponsors to fund a program that makes only the sports organisation look like a hero.

And let’s not forget that any company big enough to be taking on a major sporting sponsorship is likely to have their own community program – meeting the needs of their customers and communities in a way that is right for their brand. In that case, what’s better, spending $350,000 for a bit of visibility on a team’s community program, or spending $350,000 to extend and amplify your own community program? I know what I’d do.

So, what’s the answer? I believe sporting organisations should just name a figure – whatever figure they think is fair for the whole compliment of strategic, customised benefits they are providing. That way, a sponsor can make a strategic marketing decision about the best use of their marketing funds, not be mentally dividing it into “the strategic part” and “the non-strategic part”. It would be a straight cost-benefit analysis.

If sporting organisations want to derive some community revenue from their sponsors,  they really need to raise their games (pun intended). They could…

• Shunt some of the money into the foundation. If they’ve done a good job of offering creative, strategic benefits, the value of the sponsorships will rise and there should be plenty of profit to accommodate some of the revenue going into that program.
• Incorporate some community benefits into the overall sponsorship offer, ensuring that those benefits have strategic value to the sponsor. This means no more hitting up sponsors to fund a program that has virtually nothing to do with them.
• Encourage sponsors to develop leverage programs that have a fundraising spin, with the money raised going to the foundation.
• Work closely with the sponsor’s community sponsorship team to develop mutually beneficial programs. This would include integrating the team’s community work with some of the sponsor’s, and vice-versa.

For sponsors faced with this kind of proposal from an organisation you really want to sponsor, you can do two things:

1. Make your community agenda clear to the property, and try to work with them to develop a community angle to the sponsorship that works for both parties and your target markets.
2. If that doesn’t work, you need to consider the community part of the investment just a cost of doing business with that organisation. Stop trying to justify the cost against a feeble set of benefits that don’t provide value. Instead, just add that figure to the overall sponsorship cost and make your decision about the sponsorship based on the total required investment. It’s really all you can do.

Everywhere you look, you see top ten lists this time of year. So, I figured, what the heck. Here are the most popular posts, based on feedback, tweets, pings, comment, etc. I hope you enjoy reading them as much as I enjoyed writing them!

Like these blogs? Please, share them with your colleagues!

You can also let me know if you have any suggestions for 2010 – kimsblog@powersponsorship.com. I look forward to hearing from you!

10. What I Learned about Sponsorship from my Boxing Coach

After close to a month off, I was back in the boxing gym yesterday and wow, am I sore today. Actually, it’s not the muscles I use for punching that are sore, it’s the back muscles I use for recoiling after a punch and getting ready for the next one. I was explaining this to a friend and used a line my coach has said to me countless times:

It’s not how hard you hit. It’s how accurate you are and how fast you can hit them again.

As I said the words, I realised how pertinent that concept is for sponsorship (but without the hitting).

Best practice sponsorship is built around the idea of win-win-win. The third “win” is for the target markets. The goal with best practice sponsorship is that a large proportion of the target markets should receive small, meaningful benefits through a sponsorship, not just the chance for one person to receive a giant prize… [more]

9. Corporate Sponsorship Lies (and What They Really Mean)

This industry is full of little white lies. Sponsors and sponsorship seekers alike are guilty of telling them – some because you want to be nice, others to deflect blame. Whatever the reason, it’s not helping anyone. So, consider this your primer on the real meaning behind some of the industry’s most common little white lies.

THE LIE “We aren’t renewing because we didn’t get a good return”

THE TRUTH: “We leveraged and/or selected the sponsorship so poorly that we didn’t get a good return”

THE FIX: Stop passing the buck and take responsibility for it going wrong. That’s the only way you’re going to be able to learn from it and do it better next time.

It’s not a sponsorship seeker’s job to get you a return. It’s their job to provide you with the raw materials – the benefits and target markets – so that you can leverage it to get a good return. If you selected poorly, that’s not their fault. If you agreed to a package with benefits that aren’t appropriate to your needs, that’s not their fault. And if you didn’t leverage well, that is also not their fault… [more]

8. It’s Not the Size of the Sponsorship, It’s What You Do with It

“Our event is so small, but we really need sponsorship. How do we get big sponsors interested?”

“We sponsor a great little organisation, but their reach is so small, how do we make this work for our brand?”

Good questions. Important questions. And questions I hear a lot. Fortunately, the answer isn’t really that complicated. Here’s the thing – and it’s equally important for both sponsors and sponsorship seekers:

It’s not the size of the property that matters,
it’s the relevance to the sponsor’s target markets.

Let’s just say for a moment that you’re a new sponsorship or brand manager, and when you review the portfolio, you see that your company is sponsoring a depression charity in one state or city (take your pick). Your first impression might be, “We’re a national brand. What am I supposed to do with this?” But you’d be overlooking a potentially great opportunity… [more]

7. For Maximum Impact, Forget the Event, Concentrate on the Event Experience

Sponsors, have you ever lamented that some of the events you sponsor only last a day, a weekend, or a week? Wondered how you were ever going to leverage enough or establish enough relevance to justify the investment in that short timeframe? Have you ever felt hamstrung by the limitations of the event or your sponsorship level?

Sponsorship seekers, do you wonder how you’re going to sell enough sponsorship to an event or program that only attracts a few hundred or a few thousand attendees? How to juggle all of your sponsors’ various agendas within the scope of your event without overcommercialising it?

Here’s the trick: Stop talking about the event and concentrate on the event experience. (Geez, did I give it away in the title?)

The event – and I’m using that term generically to refer to whatever you are sponsoring or selling sponsorship of – is usually finite. It happens in a particular place during a particular timeframe with x number of people there and, depending on what it is, possibly a larger audience participating via the media. It’s limited, often crowded and cluttered, and to stand out, many sponsors resort to being loud and annoying, rather than meaningful and relevant… [more]

6. Sponsorship Sales Rule #1: Sell What Sells, Not What You Need Money For

Every day, my inbox fills with messages from people who want advice about selling sponsorship. There is nothing wrong with that – I’m happy to hear from you! The issue is that many, if not most, of those sponsorship sales efforts are destined to fail. They are trying to sell the impossible.

When it comes right down to it, not everything you need money for is sponsorable. Some of the things that you have to do, because you are the kind of organisation you are – listen closely all you non-profits out there – do not have enough commercial appeal to attract sponsors.

I am not for one second saying that you shouldn’t do those events or programs, just that seeking sponsorship for them is unlikely to be successful, so you need to shift to Plan B – a much easier and more realistic way to raise the money you need… [more]

5. 12 Steps: A Sponsorship Seeker’s Guide to the Recovery

I did “12 Steps: A sponsor’s guide to the recovery” and it seemed to have struck a chord, so here is the other side.

As noted in the previous blog, our industry is looking up. There is some breathing room. In some places, the economy is on the upswing. In others, sponsors shifting out of their holding patterns, adjusting to the current economic conditions, and realising that sponsorship is still a very valuable marketing tool.

For sponsorship seekers, this is great news. But before you go all giddy with excitement, you need to know that sponsors are going to be smarter, more sophisticated, and more demanding than they have ever been. The bar is set high, and if you want to be part of this recovery, you need to have an approach and skills that are at that level.

So with a reverent nod to the practical steps pioneered by Alcoholics Anonymous and other recovery organisations, I have created a 12 Step Guide to the Recovery for Sponsorship Seekers… [more]

4. 12 Steps: A Sponsor’s Guide to the Recovery

When the global economy stopped sputtering and tumbled into a full-blown recession, the sponsorship industry took its biggest hit in my 24-year career.

• Some sponsors stopped all new investments.
• Some sponsors dropped every sponsorship they could.
• Some sponsors dropped every sponsorship they should have dropped years ago.
• Some sponsors decided to go “stealth”, underplaying their investments so as not to look ostentatious.
• Some sponsors halted, or at least minimised, leverage spending.
• Some sponsors re-evaluated everything and started fresh.
• Some sponsors stayed the course.

Although I’m a bigger fan of some of these strategies than others, whatever your company decided to do, I’m sure it was driven by some combination of necessity and politics… [more]

3. My Favourite Resources for Sponsorship Professionals

My blog is usually full of advice, a few opinions on hot industry topics. What I’d like to do this time is provide a list of some of the resources and tools I rely on to get good information on corporate sponsorship.

ABI/Inform Full-Text Online

This is an essential (and free) resource for people in this industry. I could not be effective in my job without it. You can enter – Google-style – keywords and it will search the full text of articles on thousands of business publications around the world and bring you back the whole articles. You can mark the ones that are interesting to you and e-mail them to yourself. The kind of things you will find… [more]

2. The “Designated Problems” of the Sponsorship Industry

I was recently reading an article in a decidedly non-business magazine. It was about “designated problems”, and the premise was that people who may have a whole host of emotional or physical issues sometime focus on just one of them and miss the underlying causes altogether. An example would be a person who is focusing relentlessly on her insomnia and missing (or ignoring) the anxiety and depression disorders that are behind it.

As I was reading the article, I thought how this whole idea related to the sponsorship industry. Both sponsors and sponsorship seekers hang onto their “designated problems” while overlooking or conveniently ignoring the real issues. And while any given organisation may have their own version of a “designated problem”, there are two that I’m seeing over and over.

The “designated problem” for sponsors

Without any question, the most prevalent “designated problem” for sponsors is measurement. They search for formulas, they hire logo counters, they do reports all about the mechanism of various sponsorships and then complain that the problem with sponsorship is that it’s impossible to accurately measure the results.

Here’s the thing: Measurement is not the problem. Leverage is the problem. If sponsors took a best practice approach with their leverage programs, measurement would be easy… [more]

1. Six Signs a Sponsor is Just Not That into You

Okay, so I’m sitting on the couch watching the fun chick-flick, “He’s Just Not That Into You” while my husband is out with his buddies. I’m loving it. Too rare.

As usual, I can’t stop thinking about sponsorship. So, I think to myself, there are a few signs that sponsorship seekers consistently miss that could tell them that a sponsor just isn’t that into them. So, brace yourself for the cold, hard truth about how to read the signs so you can let it go, and move on to something more fruitful.

They tell you to “just send in a proposal”

This is a sponsor saying “leave me alone”, without being rude.

In actual fact, it’s unintentionally cruel, because it gets the sponsorship seeker’s hopes up, when they have little or no realistic chance at a deal. Why do I say that? Because if the sponsor was interested, they would want to keep talking to you – ensuring that you know everything you need to know in order to create a great proposal for them… [more]