I’ve recently been involved in a lively discussion on LinkedIn about the value of online sponsorship submission forms. The response has been divided, to say the least.

Some people advocate their use, citing two main reasons:

1. It allows for an apples-to-apples comparison of properties.
2. It is a faster way of vetting sponsorships than going through stacks of unsolicited proposals and request letters.

I am not a fan of these forms in any way, although I can understand why they have appeal. On the surface, it absolutely looks like a time-saver and an objective assessment tool. If you look a bit deeper, however, there are some fatal flaws in this premise.

Sponsorships are not apples

As for making apples-to-apples comparisons, every sponsorship is so different, it would be impossible to compare them unless distilled into the most basic of commodities. How much exposure, tickets, hospitality, etc for how much money? Sponsorship simply isn’t a commodity industry, it’s a creative ideas industry. Imagine if ad agencies had to pitch for business using an online form!

Sponsorship comes in all shapes and sizes, all degrees of engagement and creativity. The huge sponsorship will tens of millions of impressions may look good on a form, but offer very little real value against the objectives of a mature brand. They may be totally disengaged. They may be a nightmare to work with. You can also make enormous returns from small sponsorships that are leveraged creatively, but for a sponsor to see that potential, the property needs to be able to showcase the creative leverage ideas that will create that return. Some of the least “sexy” sponsorships could provide the best return, and vice versa. None of that – positive or negative – will come out in a form.

The value isn’t in what you get, it’s what you do with it

When you invest in sponsorship, you are investing in opportunity. It is leverage (aka “activation”) that provides the results. The best sponsorship seekers are providing those creative ideas for leverage in their proposals, making it very easy for a sponsor to see how they can make it work for their brands.

Old school sponsorship seekers tell sponsors what they’re about, list the benefits, and in effect, say “you figure it out”. That “figuring out” of what’s in it for you takes a long time, but that’s exactly what sponsors set themselves up for when they use sponsorship submission forms.

If you really want to figure out which of those proposals submitted through a form will work for your brand, you need to go through the process of idea development. This takes a lot more time than reviewing the ideas that great properties will provide to you, if you give them the chance. And if a sponsor isn’t prepared to go through the process of “how could we make this work for our brand”, then they are making decisions about who to sponsor or further consider and who not to based on least common denominator mechanisms.

My recommendation: Sponsorship guidelines

Rather than creating walls, how about sponsors  just being more open and specific about your needs. And no, including the line “we only select sponsorships which meet out needs” does not count. You have to tell the sponsorship seekers what you need.

• Create a set of sponsorship guidelines and make it really easy for seekers to get them.
• Put them online, but don’t bury them six links deep on your website.
• Ensure your voicemail says, “if you want to submit a proposal, please understand we only consider properties that meet our needs, as outlined in the sponsorship guidelines you can find xyz”.
• Ensure every point of entry for sponsorship requests has access to electronic copy. This includes brand managers, regional managers, sales managers, and senior executives (who often say “yes” just so they don’t have to say “no” – this gives them an out).
• Ensure your switchboard knows that if someone calls asking to “speak to someone about sponsorship”, they should direct them to your sponsorship guidelines online.
• Finally, make it absolutely clear you’re serious. The first sign a proposal doesn’t comply, send an email telling them that the proposal wasn’t compliant and if they want to be considered, they need to follow your sponsorship guidelines.

Anecdotally, the number of proposals you get will drop by around 60-75% and the quality of those proposals will rise dramatically. They will be more comprehensive, creative, and objective-driven. I get a lot of love letters from sponsors about how sponsorship guidelines have made their lives easier.

Get your free, comprehensive sponsorship guidelines template.

If you use a template as a starting point, creating sponsorship guidelines takes maybe an hour. You will probably have to get sign-off, which can take a bit of time and fine-tuning, but my experience is that you could have them on your website and in the hands of all of your proposal touch points (electronically), such as brand management, local and regional management, senior managements (usually their assistants), and more – within about two weeks.

Even smaller sponsors can benefit from having good sponsorship guidelines. They may not have the massive workload that comes along with hundreds or thousands of proposals a month, but they still want good proposals that are about their needs. I know many smaller and mid-sized companies that are very happy with the reduction in workload, and especially the higher quality of proposals, that they get. I even know of several companies that have guidelines for smaller sponsorships (eg, for investments under $2000) that are not as demanding as their guidelines for larger sponsorships, but still require a degree of strategic benefits and ideas.

What about sponsorship seekers?

My strong advice to sponsorship seekers is to ignore those forms and go straight to the brand manager. Don’t pitch. Contact them having done your homework and seek to fill in the blanks so you can create a customised, creative proposal with great ideas for them to leverage. If they tell you that you have to submit via the form, they have just told you “no” and basically didn’t want to do it themselves. Go ahead and submit, but the ultimate decision will rest with the brand manager, and if s/he’s just given you the flick, it’s highly unlikely to be “yes”.

For more on reading the signs, I recommend my blog, “Six Signs a Sponsor Is Just Not That into You”.

For the whole process of offer development and sales, I suggest my book, The Sponsorship Seeker’s Toolkit 3rd Edition.

The upshot

The upshot for all concerned is that sponsorship submission forms are a false economy. They work only in an environment that rewards old school thinking and constrain the creative process that is part and parcel with gaining the best returns at the least possible spend.

A few weeks ago, I was involved in a debate about whether there should be some kind of standardised language around what a sponsorship seeker offers. I was squarely in the “no way” camp, but it did get me thinking about what language a sponsorship seeker needs to know, and the answer to that was very clear:

To be successful, a sponsorship seeker needs to speak the sponsor’s language.

Some sponsees are already very good at this – able to go toe-to-toe with a sponsor as the rattles through the litany of corporate marketing terms. They use those terms throughout their proposals and negotiation, showcasing their professionalism and understanding of the sponsor’s needs.

But what about the rest? The sponsorship seekers without the corporate marketing experience? Well, I’m here to tell you that sponsor-speak isn’t really that difficult, and if you can do it, you will increase the level of professionalism you bring to every discussion and every proposal.

To that end, I’ve formulated a list of some of the most common terms you’ll hear from a corporate marketer. You can download it right here:

Cheat Sheet: Marketing Terms a Sponsorship Seeker Must Know

If you read a national advertising (bi)weekly – and you should – you’ll come across these terms regularly. I’ve left out the most obvious terms and concentrated on the ones that can be very important in a sponsorship conversation, but are not necessarily clear.

If you’ve been in the sponsorship industry for some time, this list probably won’t be that useful to you. If not, this cheat sheet just might help you sound like the marketing peer that you are.

I was recently – and frustratingly – involved in a string of responses to a blog built on the premise that sponsorship seekers should be standardising the data around what they are offering, allowing sponsors to compare properties on an apples-to-apples basis.

On one hand, the approach wasn’t surprising, as the company putting forth this premise is a company that offers a sponsorship listing service where old-school metrics of household income and impressions are front and centre. Standardising data would make it easier for more events to use their service.

On the other hand, the whole idea is so backward it makes me want to repeatedly thump my head on the desk.

Just so I make myself perfectly clear:

Standardisation is the enemy of best practice sponsorship.

I believe with every fibre of my being and all of my experience, that whether we’re talking about standardising the sponsorship offer, pricing, or measurement, “standardisation” means only one of two things: The proponents either need some education as to what sponsorship is really about; or they’re trying to sell you a formula or service that is based on this outmoded, least-common-denominator view of sponsorship.

Putting perfectly good information and wonderful creative ideas through a meat grinder until they all look the same is NOT progress. It’s like turning a five-star meal into a smoothie so it can be compared with other five star meals with the least possible number of variables. Not to put too fine a point on it, but yuck! And standardisation in sponsorship is no more palatable.

Restaurants are not reviewed based on data that is irrelevant, but easily standardised, like how many chairs they have and what colour linen they use. They are judged on substance and creativity, suitability and the recommendations of prior customers, the degree to which they focus on your needs and the passion that they bring to the experience.

The same is true of sponsorship. It is absolutely possible to make an objective assessment over the suitability or performance of a sponsorship, but standardised? No. Business plans are not standardised. Marketing objectives are not standardised. Market conditions are not standardised. No one is telling CMOs that they have 15 objectives to choose from and they should tick boxes next to the ones that interest them. Sponsor needs are far ranging and nuanced. A formula will never reflect their objectives, and a formulaic solution will never meet their needs.

I have been in this industry for 24 years. In that time, I’ve seen it rise from a visibility-driven commodity to a powerful, accountable, consumer/customer-driven marketing tool. It’s exciting and gratifying to be part of an industry that has become a shining example of what marketing can and should be. There is nothing – not one argument – that would convince me that going back to an era of less (bordering on “no”) sophistication and less accountability is a good idea for the industry.

I get this question a lot. There are a lot of people out there who really don’t understand pricing, and plenty of others trying to sell them some formula-based valuation service.

If you’re wondering whether a valuation service is worth the investment, my opinion is that you should save your money. Don’t spend anything on a valuation service, as it doesn’t actually capture the value of what you’re offering. It’s like trying to encapsulate the value of owning a car by adding up the value of each part individually. It’s the cohesive opportunity that has the value, not the bits and pieces that go into it.

Anecdotally, sponsors really don’t have a lot of time for that approach either and I’ve seen more than one roll their eyes at the mention of a “certified valuation”. They know, as I do and you should, that anything that uses a rate card approach will have to be a) arbitrary; and b) based on stock standard, non-creative benefits. I also know of a few sponsees who have contacted me saying that they have had certified valuations done, but it really wasn’t working for them – it didn’t allow for the high degrees of customisation their sponsors were after and sponsors they were approaching weren’t putting much stock in the figures provided.

What a sponsor wants is a highly customised and creative offer that gives them immense opportunity for leverage. Developing those opportunities requires doing your homework on their needs and customers and some creative brainstorming. It’s more work up front, but it is worth it. Seriously, imagine having fewer, larger sponsors who are really into it and helping you to build your event and your audience – that’s what you will get!

As for pricing a creative, best-practice offer, you can be assured that the value of that will be substantially higher than an uncustomised, standard package, but no rate card-style valuation will capture the value accurately.

There are some great techniques both for building the offer and pricing it right. The basic steps I recommend are below.

Establishing a baseline figure

Add up all of the costs of selling the sponsorship, delivering the benefits, and adding value to the sponsorship as it goes forward. From that figure, you

• Red Zone Number – Double your costs. If you are selling sponsorship for less than 50% profit, it may not be worth it. At this price point or below, take a very hard look before committing.
• Baseline Number – Triple your costs.
  

This exercise does NOT get you to the figure you should ask. It simply ensures that you know your bottom line – the point at which it is not worth your while to pursue the sponsorship – because if you’re not going to make some profit that you can put back into your event or organisation, why bother with the headaches of sponsorship? It also gives you a starting figure – your baseline figure – that you can adjust with marketer influencers.

Adding market influencers

This is where it get tricky. You want to take into account a number of factors that will influence what you can ask for a given sponsorship:

• Other major sponsorship activity in the marketplace – If the Olympics or a World Cup are coming to your region, the likelihood is that it will temporarily depress the value of other types of sponsorships.
• The amount of lead time before the event – The longer the lead time, the more fully the sponsor can leverage the investment. A very short lead time means the sponsor will get a lower result and the sponsorship is worth less. This timeframe varies from one type/size of sponsorship to another, but a general guideline is that if you are between 3-6 months out from an event (season, whatever), you will be diminishing the leverage time and it will probably drop the price. Within 2-3 months of the event, you are most likely at fire sale pricing, which will not only damage your bottom line, but your credibility. It’s not worth it.
• Demand trends – What are the hot topics, social concerns, sports, fads, or trends of the day? They will attract more sponsorship. On the other hand, if a type of sport, event, or organisation has been hit by controversy, it may depress pricing.
• Portfolio fit – If the sponsorship is a natural portfolio fit for the sponsor, without duplicating something they already have, you may be able to charge more, as it already fits with their direction. You could get bonus points by getting more creative than any of their other partners and positioning yourself as a testing ground for new ideas that could be rolled out portfolio-wide
• Equivalent Opportunity Cost – What would they be able to buy in main media that would do a similar job. If the answer is “nothing can do what this can do”, ensure your price reflects that. If you’re offering basic exposure and tickets (and I hope you’re not), you are competing directly with media, which will offer more bang for almost any buck

Ask trusted colleagues

This is the most important part of this process, but the one most seekers baulk at.

Here’s the deal… you need to get over yourself and realise that no two sponsorship seekers are offering the exact same thing. Once you realise that, you open yourself up to non-competitive relationships with like-minded sponsees. Send your proposal, with draft pricing, to a couple of non-competitive colleagues for their opinions. If you really must, refer to the sponsor as Company X.

The input you will get will go miles toward giving you a firm price.

Is it worth all the effort to price it like this? When it comes right down to it, you don’t have a lot of choice. Eventually, you will get a strong feel for pricing based on true value, but until you do, this is really your best option.

What you never, ever want to do is go in high and then discount. That doesn’t get you to the right price, it puts you in the position of looking like an idiot who doesn’t know the true worth of a sponsorship. You also look weak when you have to knock down a price.

If you do everything right and the sponsor comes back to you and says, “We don’t have the budget. Can you do it for 30% less?”, you have to say no. Be prepared to negotiate to a lower price for a lesser package, or incorporate contra or in-kind, but never, ever do a straight discount.

You may want to consider getting your hands onto the brand new third edition of The Sponsorship Seeker’s Toolkit. It goes through the whole process step-by-step and will only cost you about US $25. Yes, it’s my book, but I’m not recommending it to make me money (I only get about a dollar a book!!) Here is a link to it on Amazon:

The Sponsorship Seeker’s Toolkit 3rd Edition

Good luck!