Is It Ever Okay to Invest in Sponsorship for Defensive Reasons?

Goalie - smWhen it comes to sponsorship selection, there are a few good reasons to do it, as well as a few bad reasons that are sometimes unavoidable, but often manageable.

Good

  • To change your target markets’ perceptions and behaviours around your brand
  • To align with your customers and/or staff through their passions
  • To reward your customers and/or staff
  • To secure sales rights (provided the profit on projected sales is more than the sponsorship costs)
  • Some combination of the above

Bad, but generally manageable

I may have missed a few, but that hits the high points. One that I left off on purpose, because it is always a bad idea, is to sponsor something for purely defensive reasons.

Note the word “purely”. I’m not talking about sponsorships that work well for your brand and target markets, and have the added benefit of keeping your competition out of it. I’m talking about sponsorships that are not a good fit for your brand, but you’ve made the investment simply so your better-fitting competition can’t.

To say I’m not a fan of defensive sponsorship would be a gross understatement. If it really is a dud fit for your brand and target markets, the best you can do is have the satisfaction of having blocked your competition. That’s it. You won’t be able to leverage a return from it. The bad fit means that any leverage you might do will be inconsistent with your brand positioning. It’s like buying a fabulous pair of shoes that are three sizes too small, just because you couldn’t bear it if someone else bought them. It’s a black hole for your budget and destined for failure. It’s also completely unnecessary, despite what your internal stakeholders may think.

Below, I’ve outlined some strategies that will help your brand shift away from defensive sponsorship and toward a much more productive approach, as well as how to sell these strategies internally.

What else could you do with the money?

I am a big proponent for playing your own game. Think about the money you’re currently spending defensively. What could you do with that money if you could sponsor something that really fits you brand and markets? How could you leverage that new sponsorship to achieve multiple brand objectives?

Often, all it takes to shift this mindset is to very clearly spell out its opportunity cost:

  • What you could be sponsoring instead
  • How relevant those options are to your target markets
  • How those options could be leveraged to achieve multiple brand objectives

How to sell this internally

I suggest you get your stakeholders together – including a senior executive, if possible – and say something like this:

“We’re considering shifting funds away from some of our sponsorships that are largely defensive, and we’d like to do a brainstorm about our options if we free up those funds. This is a different way of thinking, and we’re not committing to anything at this stage, but none of our investments should be above scrutiny.”

I’ve used the word “largely”, instead of “solely”, defensive. This is because there are often stakeholders who either don’t understand best practice enough to understand what is and isn’t of real strategic value, or you may have people who are so invested in the defensive positioning that they are making (lame) excuses for continuing it.

Once you get them together, write the total, potential figure on a whiteboard. Tell them that’s their budget, and we’re going to brainstorm options for sponsorship. Once you’ve got some options, narrow it down to two or three that really turn them on. Then you should do a brainstorm on how you could leverage them, if you could do anything and have any benefits you want. If you don’t have a strong process for this, you may want to get a copy of The Corporate Sponsorship Toolkit, which outlines the whole process in a way that should get you some great, strategic, creative ideas.

Once you’re done, point out that these new options are out there, and would they rather stay with what you have for negligible returns or invest in something with a lot of scope? I’ve done this a lot. They always say “scope”.

Use your competitors’ lack of sophistication

This works really well as an adjunct to the above advice.

If you’re reading my blog (and the other blogs I recommend), my guess is that you’re either doing best practice sponsorship, or are actively moving toward it. If that’s the case, your best option may be to simply let go of the sponsorship, let a competitor take it up, and rely on the fact that their approach is far less sophisticated and effective than yours.

Old-school sponsorship thinking nets a fraction of the returns-on-objectives that a fully leveraged, best practice sponsorship. You come out way ahead if you spend the money somewhere else for big returns, and they spend $X for mediocre returns. (For more on best practice sponsorship and how it differs from older-school thinking, download the white paper, “Last Generation Sponsorship”.)

One way to think about it is like race cars. You’ve got a race car that’s good, but really unsuited for your driving style. You can keep it, and continue to be an also-ran, or you can let it go and get a car that suits your style. Who cares if the talentless competition gets their hands on your old car? They’ll still be at the back of the pack.

Of course, if your competitors are amazing, best practice ninjas, clearly this won’t apply, but if they’re not, this can be a very effective angle.

How to sell this internally

Along with the recommended stakeholder exercise, above, I suggest that you present your senior executive stakeholders with a one-sheeter entitled, “The Downside of Reducing Defensive Sponsorships”. On this short report, do an assessment of the general approach to sponsorship used by your various major competitors. You may even rate them. If they are virtually all chronic underperformers, that will be a strong indication that there is little downside to your competition getting that sponsorship.

Let them have it and ambush

If your organisational culture around competition is truly cutthroat, you could drop the sponsorship and take an ambush marketing position. This relies on your competition not fully leveraging the investment and leaving the opportunity open, but if they’re sponsorship underperformers, it’s always an option.

There is an argument that if you shouldn’t sponsor it, you shouldn’t ambush it, and I generally agree. But because ambush marketing doesn’t have a contract or a sponsee to deal with, you have lots of freedom, and can reshape the opportunity to fit your needs and your target markets better. Again, The Corporate Sponsorship Toolkit has a big section on ambush marketing which can guide you.

How to sell this internally

Honestly, this isn’t my favoured approach, but there are some companies where this would be the strategy most consistent with their culture. I strongly suggest that you still go through the process of assessing alternatives. Make one of those alternatives ambushing whoever takes up the sponsorship. Chances are pretty good that your team will see that playing your own game well is a better strategy than trying to beat someone else at their game.

And if you absolutely can’t get rid of it…

You may have a political situation that won’t allow you to exit the sponsorship altogether, which happens. Or your competition may actually be better at sponsorship than you are (for now, anyway!), which may make the downside pretty significant.

In those cases, when it comes up for renewal, reduce your sponsorship to the lowest level that still affords you category exclusivity. At least, you’ll be paying the bare minimum for the defensive position you’re taking.

There is the chance that your sponsee will tell you that they can’t reduce the sponsorship, as they recognise that your category (if not your actual brand) is a great match and should be bringing in a certain level of revenue for them. If that’s the response, I suggest you go back to your stakeholder team and tell them that the reduction strategy was unsuccessful, and now you need to assess alternatives before you decide whether to renew at the current level.

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Need more assistance?

For all you need to know about best practice sponsorship selection, leverage, measurement, management, and more, you may want to get a copy of The Corporate Sponsorship Toolkit. If you need additional assistance with your sponsorship portfolio, I offer sponsorship consultingsponsorship training, and strategy sessions. Please 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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