For years, I’ve had the same protest at sponsor workshops. I go through the benefits of sponsorship leverage and a bunch of case studies, and the creative juices are flowing. Then someone either complains that leverage is all well and good, but it costs money, or asks me how they can possibly leverage a sponsorship if they have no leverage budget.
I’ve just finished a spate of speaking events, and this happened again, with some sponsors acting like leverage is a nice-to-have, not a critical piece of the sponsorship equation. I just can’t help but wonder how – in this day and age – sponsors are still getting one of the fundamentals of sponsorship so wrong.
So this blog is written as a wake-up call for any sponsor for whom leverage is underfunded, or worse, doesn’t happen at all on some sponsorships.
If you don’t leverage, you’re relying on the benefits of the sponsorship to accomplish your goals. But unless your sponsorship includes a major component of sales – either direct sales to the rightsholder or exclusive vending rights to the fans – those benefits aren’t going to deliver against your objectives. Think I’m kidding?
You can congratulate yourself about all the logo exposure you’re getting, but that’s consigning your brand and your results to first generation sponsorship. Logo exposure moving the pin on building alignment to the brand, or changing perceptions or behaviours around a brand, has been debunked since 1991. (For more about the generations of sponsorship, read Which Generation Corporate Sponsor Are You?)
Sure, you can say you’re “proud sponsor of”, but do you really think that sways anyone? Does it sway you, when sponsors of the properties you love say they’re “proud sponsors”? Of course not, because it doesn’t mean anything except that the sponsor spent the money.
You might get some hospitality, but if you don’t do anything interesting or creative with it, you’re inviting your VIPs to an experience they could get from anyone – including your competitors.
The upshot is that the sponsorship itself isn’t going to do anything for your brand. Just having it, branding it, and claiming you’re a “proud sponsor” doesn’t say a single thing about your brand. It doesn’t nurture relationships, it doesn’t build alignment, and it certainly doesn’t motivate the actions and perceptions you’re trying to evoke.
The best sponsors in the world don’t spend enormous amounts on sponsorship leverage. Instead, they integrate the sponsorship across all or most of their marketing channels, adding meaning and resonance to already-budgeted marketing activities.
Yes, there is some incremental spend, but it’s more like 10-35% of the rightsholder fees, not the 100-200+% advocated by many, many industry dinosaurs. There is more to it than that, and there are exceptions, but if you think leverage is impossible because you’ve only got a modest budget, you’re probably wrong.
For more on this, read “How Much Should You Budget for Sponsorship Leverage?”
This should be part of your sponsorship vetting process. Once you’ve gone through all of basics, ask the question, “Do we have the money and other resources to properly leverage this sponsorship?” If the answer is “no”, don’t do it. Investing would be pointless. It’s like investing in a plot of farmland and never sowing any seeds.
For many sponsors, the answer lies in sponsoring fewer properties, structuring them efficiently, and leveraging them properly. The steps I recommend are below.
Get rid of every poorly matched sponsorship. Get rid of sponsorships that are stale and/or don’t have any internal buy-in. Get rid of sponsorships where the rightsholder is so inflexible, uncreative, or self-involved that it’s difficult to work with them.
Keep only the sponsorships that have real meaning to your target markets. Look for sponsorship multi-tools, which can be leveraged in lots of ways, over a significant period of time. If you’ve got a sponsorship with potential, but poor benefits, renegotiate for more leveragable benefits.
Leverage becomes even more cost- and time-effective when sponsorships are arranged in an efficient manner. This could mean creating an umbrella portfolio, where you leverage related, smaller sponsorships as if they were one giant sponsorship. Or you could create a vertically integrated portfolio, which is structured differently, but the effect on leverage is the same.
What you don’t want is a portfolio full of only unrelated sponsorships, as they all then need to be planned, implemented, and funded individually.
For more on structuring your portfolio and these options, see How to Structure a Sponsorship Portfolio.
Once you’ve got rid of the dead wood, and possibly rearranged your portfolio, allocate the fee savings to doing great leverage around your remaining sponsorships.
It may take some time to get rid of some of those sponsorships, so determine your leverage priorities as funding becomes available. Create draft leverage plans around your “keepers”. This will tell you how much incremental leverage funding they’ll each likely need. Some may not need much at all, while others would benefit from an investment on the higher end of the best-practice scale.
Key to all of this is learning to leverage properly. Work with a cross-section of stakeholders to fully understand the fan experience, then do a directed brainstorm working through a number of angles and leverage types, until you’ve got a bank of strong ideas from which to choose.
I use a design-thinking framework for leverage brainstorms, building understanding and empathy, while fostering extreme creativity and resourcefulness. The exact process I use is too comprehensive for a blog, but can be found in my online training, Corporate Sponsorship Masterclass, and in my upcoming book, The Corporate Sponsorship Toolkit 2nd Edition. I’m also very happy to facilitate one or more leverage sessions with your team, so you can learn and replicate the process across all of your sponsorships.
Once you’ve done your audit, there will be a temptation to start spending on new sponsorships. Don’t. Instead, don’t commit to any new sponsorships until every single sponsorship you’ve still got is firing at peak effectiveness.
I’m constantly harping on rightsholders to include creative leverage ideas in sponsorship proposals. It builds vision for sponsors, and is infinitely helpful with their internal sell. But here’s the kicker… if you provide lots of ideas that integrate across their existing marketing channels, and don’t go overboard with expensive, often on-site activations, you’re demonstrating that the sponsorship doesn’t have to cost a ton of money to leverage.
This is great for you, as you can literally say in the proposal that you’ve included primarily ideas that integrate across existing channels, minimising incremental leverage spend. You’ll sound smart, realistic, and a lot more savvy than most organisations approaching them. It’s also a lot easier to sell a $100k sponsorship if they’re thinking about a total cost of around $125-130k, not $200-300k.
If learning to leverage strategically and creatively, within an incremental budget of 10-35% of rightsholder fees is still too much, don’t sponsor.
Don’t sponsor whatever it is that you’re currently considering, and don’t renew sponsorships that you can’t commit to leveraging properly. And if your boss or company culture just won’t support investing the money and effort to leverage any of your sponsorships, then you shouldn’t be sponsoring at all, because it’s just wasted money.
It pains me to say that – it really does. Sponsorship is the most meaningful, passion-driven, and flexible of all marketing media. You SHOULD be using this amazing medium. But using that meaning and passion isn’t turnkey. You have to work it, and that takes at least a little budget.
If what you want is turnkey marketing, there are plenty of options. Do those. Leave sponsorship to the brands with the vision, creativity, and resourcefulness to make the most of it.
You may also be interested in my white papers, “Last Generation Sponsorship Redux” and “Disruptive Sponsorship: Like Disruptive Marketing, Only Better“. I’ve also got a self-paced, online sponsorship training course for sponsors, covering the whole process of sponsorship strategy, selection, negotiation, leverage, measurement, and management, with lots of inclusions. Interested? Check out the Corporate Sponsorship Masterclass. I’ve also got Getting to “Yes” for rightsholders.
If you need additional assistance with your sponsorship portfolio, I offer sponsorship consulting and strategy sessions, sponsorship training, and sponsorship coaching. I also offer Sponsorship Systems Design for large and/or diverse organisations. Please feel free to drop me a line to discuss.
© Kim Skildum-Reid. All rights reserved. To enquire about republishing or distribution, please see the blog and white paper reprints page.