4 Warning Signs that a Sponsor is Planning to Exit

Exit SignHave you ever been blindsided by a sponsor exiting? Thought a renewal was a sure thing, or at least a strong probability, only to get a “no”? There were probably signs along the way, but as much as sponsorship seekers read a myriad of motivations and probabilities into every stage of the initial sales and negotiation process, they don’t read between the lines when coming up to a renewal.

Honestly, I don’t think most sponsors are trying to keep their partners in the dark, but no one likes to break bad news, and sponsors are no exception. Sometimes, they will drop hints, instead, hoping that gets them off the hook for addressing it directly until it’s renewal time and they say “no”.

Below are a few warning signs, followed by some advice on how to handle it if you’re seeing any of them.

Telling you they’re doing a portfolio review

As a consultant who works primarily with sponsors, I have to say that I think portfolio reviews (AKA, “audits”) are a good thing. But usually, that’s an internal process and the partner is unlikely to hear about it… unless there is a chance of an exit.

If a sponsor tells you that they are undertaking a review of all investments, understand that they’re probably not telling everyone. In fact, they may have already made their decision and this is their way of breaking it to you gently.

Telling you the budget is being cut

Like telling you about a portfolio review, if a sponsor laments to you that their budget is being cut, that may or may not be true. It may just be another way of warning you not to count on a renewal. That way, they can tell you later that you’re not being renewed and they can pass along the blame to some unnamed bean-counter.

Evasiveness

If you are a proactive partner, you are likely requesting regular meetings and wanting to discuss renewals and new leverage plans well ahead of time. If you’re doing that and the sponsor is having problems scheduling meetings, or if they start making excuses about why they can’t meet right now, they may be genuinely unable to meet, or they may be putting off the inevitable conversation about exiting.

Asking for extra information

If a sponsor is trying to decide whether to renew or not, they may start asking you for extra information – reports, assessments, etc. As a responsive partner, you would already have been reporting on the benefits provided and the progress of the sponsorship, while the sponsor will be measuring their results. If they’re asking for additional information, however, it could be a sign – especially in conjunction with any of the above.

None of these are absolute, and they could have nothing to do with a planned exit. That said, you do need to pay attention, and if you start getting any of these signs, you need to ask the hard question. Actually say…

“We could be wrong, but we’re getting the sense that you may be considering an exit at the end of the contract. Can I just ask that, if the decision to exit has been made, you let us know sooner rather than later? And if it’s up in the air, we are very happy to work with you to reinvent.”

If an exit is on the cards, it really is better to know earlier. You also need to know why, because if it’s an issue with how you’ve delivered the sponsorship, you need to fix that approach before you lose any more.

For all you need to know about sponsorship sales and servicing, you may want to get a copy of The Sponsorship Seeker’s Toolkit 3rd Edition.

Need more assistance?

If you could use some additional support, I provide sponsorship coaching, sponsorship consulting, sponsorship training, and if you need a fast, cost-effective start, the Jump Start program. If you’re interested in any of these services, please review the materials and drop me a line to discuss:

Kim Skildum-Reid
admin@powersponsorship.com
AU: +61 2 9559 6444
US: +1 612 326 5265

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