Sponsorship Needs Assessment
Although most events may benefit from sponsorship, not every event is appropriate for this component. Sponsorship is a commercial endeavor and is extremely time consuming. Therefore, unless you are prepared to enter into a commercial relationship with other parties and have the time resources to devote to this activity, you may instead wish to solicit donations. Many event managers confuse sponsorship with benevolence. A fundraising event where donors contribute without any expectation of commercial benefit is a benevolent activity. Sponsorship, on the other hand, is a commercial transaction in which two parties agree by way of an offer and acceptance. The offer generally involves marketing services provided by the event organizer in exchange for the sponsor’s cash or in-kind contribution to the event. The marketing services may range from advertising to banner displays to hospitality to a full-blown marketing plan involving public relations, advertising, and promotion.
As you can begin to see, these marketing services place new demands on the event organizer. Therefore, the event resources may need to be reallocated to handle this new demand. Not every event is able to do this. Before you give the green light to soliciting sponsorships, use the following checklist to determine if your event is appropriate for this activity.
1. Does the event require an infusion of sponsor dollars to achieve the quality required?
2. Are there sufficient internal and external resources to support this activity?
3. Is commercial sponsorship appropriate for the nature of the event?
4. Are there sufficient prospects for sponsorship sales, and is the timing appropriate to approach them?
5. Is this activity legal, ethical, and appropriate for the spirit of the event organization?
These questions can save many event organizations much wasted time, energy, and heartache. Examining the internal and external resources may be one of the most important aspects of this process.
Although sponsors may provide much needed funding for your event, to help you achieve the quality that is required, sponsors also require that your own financial resources meet their objectives. They may, for example, require that you commit a certain amount of marketing dollars. Second, they may require minimal or substantial hospitality services that may amount to hundreds or thousands of dollars per day. Finally, if you are going to retain these sponsors assign one or more people to monitor the activities, service these accounts, and develop long-term relationships. Yes, sponsors can provide needed funding; however, as in any commercial transaction they must also receive a fair return on their investment.
You are responsible for orchestrating this return. Your event may benefit from additional exposure through sponsorships. Earlier we discussed using tag lines in advertising as one way to increase your exposure inexpensively. Sponsors may also provide you with shelf space in their retail stores to promote your event through coupons. Some sponsors have celebrity athletes, television stars, and movie personalities on contract who they may wish to involve with your event.
Perhaps one of the most important reasons event organizers align themselves with commercial sponsors is the opportunity to achieve greater credibility for the event. Securing the sponsorship of AT&T, IBM, Coca-Cola, or other Fortune 500 firms immediately positions your event as a major player and may help your event organization secure additional funding from other sources.
Developing Sponsors
The competition by event organizers for sponsors is keen at every level. Whether your event is a local event or a national one, you must first conduct a competitive analysis to identify all competing events and study their sponsorship history and present activities. Following are several suggestions on how to identify appropriate sponsors for your event:
1. Determine the financial level of sponsorship you require. Not every sponsor can make a Notes five- or six-figure decision.
2. Review trade journals such as Advertising Age and Sponsorship Report to track sponsor activities.
3. Review the local business tabloid in your area to search for prospective sponsors.
4. Network with advertising and public relations agency officials to find out if their clients have an interest in your event.
5. Conduct a focus group with prospective sponsors to solicit and later analyze their opinions and attitudes toward your event.
Once you have developed a list of prospective sponsors, the next step is to qualify them for solicitation. Do not waste your valuable resources by making endless presentations to sponsors who do not have the interest or resources to support your event financially. Instead, qualify your sponsors by contacting local organizations such as the chamber of commerce, board of trade, banks, and other centers of commerce to inquire about the financial viability of the prospective sponsor. Next, thoroughly review the sponsor’s past marketing efforts to determine if the sponsor’s overall marketing plans are conducive to sponsoring your event. Finally, talk to advertising and public relations executives and attempt to forecast where your prospective sponsor may put his or her marketing dollars in the future. Perhaps the logical place for investment is your event.
Selling Sponsorships
Always do your homework regarding the sponsor’s needs, wants, and desires prior to attempting to sell a sponsorship. To make the sale, the sponsorship offer must be an exact fit with the needs, expectations, goals, and objectives of the commercial sponsor. Customize the offer to achieve these goals and objectives prior to your presentation.
Constructing a successful proposal is equal parts of art and science. As an artist, you must design an attractive, enticing, and aesthetically pleasing product that the sponsor will want to purchase. Therefore, describe the capability of your organization and past sponsors (if any), incorporate testimonials and references from leading individuals, and package the proposal in a professional design. Avoid being clever. Remember that the sponsor will be making a business decision and will prefer a serious business plan over hokeyness. The science part involves carefully identifying your target market and linking all sponsorship activities to sales or recognition that will benefit the sponsor. List the benefits and activities the sponsor will enjoy as a sponsor of your event. For example, the sponsor may be able to provide free samples of his or her product or service and conduct marketing research. He or she may be able to offer his or her product or service for sale and measure the results. Or the sponsor may benefit from public relations exposure. Regardless of the benefit or feature, detail each potential activity that may result from the sponsorship.
Include in the proposal sponsorship terms for payment and any requirements the sponsor may have in addition to these payments. In some events, the sponsor is allowed to provide an exhibit at his or her own cost. In other events, the exhibit is provided as part of the sponsorship costs. Describe any additional costs or services the sponsor is required to contribute to avoid any future surprises. The following list summarizes the key elements in a winning sponsorship proposal:
· Describe the history of the event.
· Include a capability statement about your organization’s resources.
· Incorporate testimonials and references from other sponsors
· Describe the benefits and features that the sponsor will receive.
· List all financial responsibilities that the sponsor must accept.
· Describe any additional responsibilities that the sponsor must accept.
· Describe how you will chronicle the sponsorship activity.
· Include a time and a date for acceptance of the offer.
· Include a provision for renewal of the sponsorship.
· Include an arbitration clause in case you and the sponsor disagree regarding the sponsorship activities.
One of the most effective ways to persuade sponsors to participate in an event is to organize a prospective sponsor preview program. During this program you and your staff describe the benefits and features of your sponsorship activities to a large number of prospective sponsors. You may wish to invite a couple of previous sponsors to provide in-person testimonials about the benefits of the sponsorship. You may also wish to pre-sell one or two sponsors so that when you ask for a reaction from those in attendance, at least two from the group will respond favorably. Their favorable response may, and usually does, influence others. Avoid trying to hard sell during this program. Use this program to plant seeds that will be further cultivated during meetings with individual sponsors.
Overcoming Sponsor Objections
Most sponsors will want their sponsorship activities customized to achieve their specific goals and objectives. Therefore, they may have some preliminary objections after receiving your initial offer. Once you have presented the offer, ask them for their reaction on each benefit and feature. Listen carefully and list these comments. Make two lists. One list is for approvals, those items that they see the value in sponsoring. The second list is for objections, those items that they cannot see the value of at this time.
To do this, ask sponsors what is required by their organization to overcome their objections on each point. In some cases it may be additional exposure. In other cases it may be the price of the sponsorship. To overcome these objections, be prepared to provide them with the tools they need to make a positive decision. For example, if their objection is cost, you may be able to combine their sponsorship with others and lower their contribution. If their objection is limited exposure, you may be able to reposition their involvement inexpensively to provide them with greater and more sustained visibility. Handling objections is an integral part of the sponsorship sales process. Rehearse these discussions with your internal stakeholders to identify other common objections and be prepared to provide the solution your sponsors need to remove these barriers.
Negotiating your Sponsorship
Almost every sponsorship will require intense negotiations to move it into fruition. Whenever possible, conduct these negotiations in person with the decision maker. Assign a specific date and time for these negotiations and confirm that the sponsor is a feasible prospect before entering into a serious negotiation. In most negotiations both parties desire a win-win-win outcome. In this type of negotiation you win as the event organizer, the sponsor wins as the event funding agent, and the stakeholders of your event win from your mutual efforts to secure these dollars.
Carefully analyze what your sponsor expects from the sponsorship prior to your negotiating session. Determine in advance what additional components you may be able to offer if required.
Also, list those concessions that you cannot make. Finally, list these items that may require Notes further approval from your board or others before you agree to them. Begin the negotiation by asking the prospective sponsor to list all items that are acceptable, bundle them, and have the sponsor approve them. Now you are prepared to focus on those items that require further resolution. Ask the sponsor to describe his or her concerns about each negotiation point and take careful notes. Look at your list of concessions and decide if any item you have listed will help resolve these concerns. If it is appropriate to offer a concession, do so and ask the sponsor for his or her approval. Once the sponsor has approved, ask him or her to provide you with an additional service, usually at modest additional cost to the sponsor, to balance his or her end of the negotiation. If the sponsor is unable to provide you with an additional service or product, determine if you are able to proceed to the next point.
Do not be afraid to walk away. In some cases the concession that the sponsor will ask for may sacrifice the credibility or reputation of an event. In other cases, the sponsor will want a concession that may undermine the financial wealth of your event. Do not concede your reputation or the financial success of the event. Instead, thank the sponsor for his or her time, offer to work with him or her in the future under different circumstances, and leave the room as quickly as possible. In some instances, event organizers have reported that this approach has forced the prospective sponsor to re-examine his or her position. It is not unusual to have the sponsor call the event organizer the next day and offer a greater concession to save the sponsorship.