Agreeing to a sponsorship deal is like getting married in some regards. The two parties involved need to have a natural affinity for one another and a certain ‘fit’, they need shared values and objectives, a sense of ‘the team’, good communication, willingness to work on the relationship and solid trust and understanding if things go wrong. Before you say “I DO!” to a sponsorship deal, consider the following because signing a contract is the first step in what should be a long and committed journey.
1. Start with firm objectives and measures
There is no end of sponsorships deals on offer and some of them can seem like a no brainer, but be clear on why you’re seeking a sponsorship deal, what you intend to get out of it, and how will you prove the sponsorship was a success. Set clear objectives e.g. brand awareness, data acquisition or product trial, then measure and calculate the cost / benefit so you can evaluate what the relationship offered.
2. Know both target markets
The sponsorship opportunity will be a waste of money if you don’t get this first step right. Know your target market segments in detail; drill down on them, create different personas and then match them to the sponsorship opportunity. The company offering the sponsorship deal (if credible) should have detailed information about their audience, members or attendees. Interrogate the information and be sure you’ll reach the right people in the right way via the sponsorship deal.
3. Take a different approach to benefits
Think outside the box. Things have moved on from the days of ‘logo placement’ on X and Y. To stand out in a competitive sponsorship environment look further than standard branding inclusions or activations and search for innovative and exciting ways for people to engage with the brand. Take a ‘value add’ approach, ask: “How can my brand add value to the target audience? What are the consumer pain points and can I ease them in a clever, engaging way? How could I surprise or delight targets?”
4. Plan for extra costs
Investing $10k on a sponsorship deal is really just a deposit before investing more funds. In PR, a common rule of thumb is to take the sponsorship investment and add another 50% to 100% to better understand the cost required to properly leverage the opportunity. Also think about the added extras in promoting your product and the brand via the sponsorship e.g. for an event sponsorship for a spirit brand, extra costs would be an activation (a bar), stock, staff, stands, glasses, ice, mixers, marketing material etc all of which can add up.
You also need to understand that good sponsorships take time to build so if it’s one event held annually, ideally consider the costs involved with committing for 2 – 3 years to properly understand the leverage potential of the audience and opportunity. If you are able to show the person or company seeking your sponsorship that you are willing to invest for an extended period it may also be worth scaling your investment costs so they increase over time in line with your projections of increased leverage success.
Set the expectation of collaboration between you (as sponsor) and organisation from the outset. This collaboration needs to be maintained throughout and the sponsorship manager must gain a real understanding of their potential sponsors marketing and business objectives. In the wooing phase, check who will manage the relationship once the contract is signed as you might find you’ll get passed down the line once confirmed.
Posted by Renee Creer