The dollar amount a sponsor gives to an event is only the starting point. Usually a sponsor will spend an amount over and above the sponsorship fee to maximize the return on their investment in the sponsorship property. This is called “leverage.” Widely accepted practice is for a sponsor to spend a significant proportion of their sponsorship fee in their own promotional activity relating to the sponsored event or activity. The important thing is that leveraging will produce greater value to sponsors. You can help them in achieving this leverage.
Some people even advocate spending 2-3 times of the fee in promotional activity in order to maximize the return on the sponsorship investment. Although this expenditure is not the sponsee’s responsibility, astute sponsees (sponsorship recipients) certainly encourage it. The sponsor’s promotional activity would help the event as well as the sponsor.
In the past, sponsors judged the potential of a sponsorship arrangement by the size of the audience. They sought audience size in the mass media as the essential factor. For instance, the size of the television audience for a big sporting event, and their brand visibility at that event. But over time, they have come to realize the important factor is the extent of engagement by the audience with their brand or product. So, if you are seeking sponsorship you need to know as much as you can about your fans – who the fans are and why they follow you – and their potential interest in the event or activity for which you want sponsorship. It doesn’t need to be a mass-media audience, more that they are relevant to the potential sponsor’s marketing objectives. Then think about potential larger themes stemming from the audience you attract, which could be used to expand interest from an even bigger audience.
Sponsorship is a great integrating mechanism for a sponsor. It can be used to improve the results obtained from the sponsor’s other marketing activities. A good sponsorship can be used to create more excitement for existing activities such as advertising, merchandising, product packaging, trade and retail promotions, loyalty programs, employee involvement and web-based promotions.
What a sponsor wants from their investment
Most sponsors want three core outcomes when they sponsor an event or activity, according to experienced marketing strategists:
- They want to know that supporting this event or activity will help them reach their target audience.
- They want to get measurable benefits from their involvement.
- They want the commitment to lead to increased sales of a product or service, as well as stronger stakeholder relationships.
How leveraging will produce greater value to sponsors
If you are seeking sponsorship, think of ways to maximize the return for the sponsor when you are researching what the sponsor normally does to promote a sponsorship. You can discuss this more fully during negotiations leading up to a signed agreement. But focus on what you can do for a sponsor rather than what you can get from the agreement.
Astute sponsees keep around 15-30% of the sponsorship fee on hand to spend on activities to help the sponsor leverage the benefits from their commitment. Quite often this amount can be the ‘icing on the cake’ to make the sponsor feel they have a switched-on sponsee who really wants to help them to maximize the value of their sponsorship investment.
You should always ask the sponsor representatives to think of the ways the sponsorship can be used to extend their current marketing and public relations activities. If the representatives are slow to realize the ways in which the sponsorship can be leveraged, ask to meet people from the sponsor’s various operational divisions and talk to them about ways you could use the sponsorship to help them meet their objectives, especially if they are involved in PR or marketing.
You can summarize the sponsorship arrangement for them, including the target audiences, the sponsor benefits and some ideas on how they could use the sponsorship to assist them in their own areas. As the ‘early adopters’ within the sponsor organization start to respond to your ideas, you can use these as examples to sell the concept of leveraging to others.In this way, you increase your value to a sponsor by leveraging your fee.
You can consider getting some of your sponsors together with each other to cross-promote their products or services in relation to your event. For instance, you might suggest to a tennis racquet manufacturer that they team with a sports bag manufacturer or tennis shoe manufacturer who also sponsor your tennis event. You can do this on a smaller scale if you are running a smaller event. A joint promotion would benefit everyone (especially your event!).
Internal promotions to employees and shareholders are another possibility to leverage the occasion. The sponsor could engage in merchandising activities, incentive programs, volunteer programs, contests, family days, celebrity appearances for the benefit of the internal audience. Depending on the event or activity, you could offer a behind-the-scenes view or visit to the event action by employees, shareholders and/or customers. This could be live or virtual.