The Problem with Sponsorship Levels

This is a total rewrite of one of my most popular blogs. For years, this blog has sat squarely in the top five, and according to analytics, virtually everyone gets here because they’ve done a search on something like, “How to create sponsorship levels”.

The problem is, sponsors hate levels. Gold-silver-bronze, or whatever cutesy, “creative” names you’ve put on them, sponsors see a proposal full of set packages, arranged by size, and they know you don’t get it.

They think you’re unsophisticated. They think you’re inflexible. They may even think you’re lazy. And they know for sure that you either don’t know or don’t care what they are trying to accomplish, because if you did, you’d use that information to put together a customised proposal that meets those needs.

Structuring your offer into levels puts you on the fast track to rejection, but once you’ve got your head around why levels don’t work, the alternative will make perfect sense.

How sponsorship levels are supposed to work

The basic idea behind levels is that…

  • The sponsor can right-size their own sponsorship
  • You just need to create the set packages, no need to customise, so it’s easy

The levels are generally based on varying numbers of hygiene benefits:

  • Logos and/or mentions
  • Tickets to things
  • Some kind of hospitality
  • Some kind of official designation
  • Maybe someplace to set up a display or a speaking slot

This is often packaged up into some highly-designed brochure or prospectus, which looks great, but in reality, undermines your credibility and value to sponsors.

Reason levels don’t work #1: You’re commoditising yourself

Sponsorship levels are Commoditisation 101. They only work if the packages aren’t customised, and that only happens if the benefits they’re based on are those boring, usually low-value, hygiene benefits sold by every other unsophisticated rightsholder in the world.

So, you’re simultaneously creating no differentiation for your property from all of the other unsophisticated properties offering the same benefits, and missing all of the amazing things about your property that have real value for a sponsor.

Reason levels don’t work #2: Offers need to be fully customised

I actually saw a conference proposal once that had 14 levels pre-printed into the glossy presentation folder. They spanned every precious metal and a lot of precious stones! It was all very slick, but for any sponsor with a modicum of sophistication, it would have been a massive turn-off.

Today’s sophisticated sponsors are looking for a totally customised proposal, built around their brand and business needs:

  • What perceptions are they trying to change around their brands?
  • What behaviours are they trying to change?
  • What markets are they trying to influence?
  • Who are they trying to align with, and on what basis?

Once you understand what their objectives are and who they are targeting, then create one offer for them. It will be specific and powerful, and if it isn’t perfect for them, you can always rework the package. You’ll send far fewer proposals with a much higher strike rate.

Reason levels don’t work #3: You’re undervaluing the designation

When you structure your sponsorships into levels, you’re using the designations – “Gold Sponsor”, etc – as the definition of what they’re receiving. In reality, that designation should be a benefit that you sell, as part of a larger package.

Reason levels don’t work #4: It reduces sponsor engagement

What they all have in common is that they spend as little as possible, barely leverage, if at all, and have no vision as to what sponsoring your property can do for their brand. The reason they don’t see the value and scope of what you have to offer is because you sent them a generic proposal, built around levels, and you didn’t instil any vision at all.

The sponsorship rosters of rightsholders that sell sponsorship in levels tend to be full of sponsors that aren’t investing for the right reasons.

You’ve got sponsors that are viewing it as just a cost-of-doing-business, not a powerful marketing platform. You’ve got legacy sponsors that really don’t see the value, but for often political reasons, can’t exit. You’ve also got sponsors that have been pressured into sponsoring by government or a board member.

What they all have in common is that they spend as little as possible, barely leverage, if at all, and have no vision as to what sponsoring your property can do for their brand. The reason they don’t see the value and scope of what you have to offer is because you sent them a generic proposal, built around levels, and you didn’t do one thing to instil that vision.

The answer: Switch to bands

Rather than levels, I recommend bands. Realistically, there is a sponsor hierarchy and you need some way to refer to them. Creating broad bands of sponsors allows for both that hierarchy and a lot of flexibility. I like using three main bands, with firm financial and term requirements.

As an example, your bands could look like those outlined below. Note, these numbers are arbitrary and used as examples only – you’ll have to set your own.

  • Principal – Premium level sponsors of our entire organisation or biggest events. Generally valued at over $400,000 pa in cash and/or contra. Maximum of three sponsors in this category, and must have a contracted term of 3+ years.
  • Major – Major partners using the sponsorship to achieve a wide range of marketing and business objectives. Generally falling in the range of $100-400,000 pa in cash and/or contra, with a contracted term of 2+ years.
  • Supporting – Lower level sponsors usually using the sponsorship to achieve a more limited number of marketing and business objectives. Generally valued at sub-$100,000 pa in cash and/or contra.

If your property has a lot of tiny, rats-and-mice sponsorships, you could put another band down at the bottom, called “Community supporters” or similar. These would be low-value, basically set packages, and they’d be the only ones.

Whatever your financial framework is, this approach gives you a lot of flexibility, but still some strata. You also don’t need to worry about sponsors comparing notes, as you will have moved right away from the commoditisation approach that invites comparison, to an approach that is focused on the individual needs and goals of your sponsors.

The upshot

If you’ve been selling gold-silver-bronze levels (or similar), you probably have some other fundamental issues with your approach. You’re going to need to get comfortable with a broader array of benefits, with developing creative, customised offers, and with building a complete business case for every significant sponsor. Here are a few resources that will give you a running start:

And for everything you need – the whole offer development and sales process and all of the tools – in one place, get a copy of The Sponsorship Seeker’s Toolkit 4th Edition.

Need more assistance?

If you could use some additional support, I provide sponsorship coaching, sponsorship consulting, and sponsorship training. 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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