Most Important Post-COVID Sponsorship Strategies for Rightsholders

A few days ago, I wrote a similar blog for corporate sponsors, listing the sponsorship strategies that have emanated from, and been reinforced by, operating in a pandemic.

In this blog, I address the rightsholder side of post-pandemic strategies. I know that the pandemic has been devastating to rightsholders around the world, and what was already a challenging job got a whole lot more difficult. Part of this was the direct impact of fewer live events going ahead, but a lot of these difficulties are because sponsors are now tending to run leaner, make shrewder decisions, and expect more from rightsholders.

So, as we move toward a new normal, these are the strategies that rightsholders should be using to…

  • Proactively meet sponsors’ higher expectations and needs
  • Mitigate the sponsorship impacts from COVID, future variants, and other force majeure situations
  • Position yourself to maximise revenues in a buyers’ market

Accept that you can’t go back

Sponsorship sophistication has risen a lot in the last ten or so years, with sponsors outpacing most rightsholders, resulting in a growing sophistication gap. The pandemic forced sponsors to be even more resourceful and creative, while many rightsholders have just white-knuckled it, waiting for things to improve.

Unfortunately, that’s not going to happen. The pandemic has fundamentally changed how sponsorship is done. There is no time machine that is going to make the skills you used to sell sponsorship ten years ago work in a post-COVID world. Without an overhaul of your approach, bringing it into line with current sponsor expectations, sponsorship sales are just going to keep getting harder.

So, you need to make a choice. Or, more to the point, your organisation needs to make a choice. You can do the work and make the changes, so your sponsorship program thrives; or you can redouble your efforts around the old approach, and watch your revenues wither.

Focus on the sponsors’ markets, not your own

One of the biggest ways the pandemic changed the game for sponsors is that they had to get really good at leveraging to remote fans and other markets, because there were hardly any in-person audiences. Great sponsors have been doing this for years, multiplying their results, but we’re seeing a lot more of it.

The big question is, are you ready to reframe your pitch to capitalise on that larger target market base?

The target markets for your property are usually people who are directly tied to revenue – ticket buyers, members, donors, merchandise buyers, paying streamers, etc – and people you’re trying to get to spend money on your property. These are the people you market to, and fair enough. But if these are the people you reference when you sell sponsorship, you’re undercutting a lot of your value.

Sponsor target markets will include…

  • Some or all of your in-person audience
  • Some or all of your remote fans – people who care about the property, but may never buy a ticket or merch or whatever
  • Customers and potential customers (B2C, B2B, B2G)
  • Staff and/or communities
  • Fans of the broader themes. Think about the personality of your property, the values, the soul. You may run an environmental charity, but the number of people that care about climate issues and sustainability would far outstrip your target markets

Every one of these target markets is leverageable, for a sponsor. Every single one. And if a market is leverageable, that delivers marketing returns. Being able to talk about your relevance to this whole range of sponsor target markets – not just the in-person fans and some proportion of the remote fans that you market to – dramatically increases your value.

I’ve done an illustration of these markets below, but do keep in mind that different sponsors have different priorities. Some sponsorships are primarily driven by staff retention and corporate culture, for instance. Some will be aimed primarily at customers.

 

Feed sponsors leverage ideas for each of those markets

Post-pandemic sponsorship isn’t just about being able to talk about this range of target markets. You have to be able to demonstrate how your property can be leveraged to each of them. How can they leverage to staff? How can they leverage to customers and potential customers? How can they leverage to the fans of the larger themes?

By feeding those ideas to sponsors and potential sponsors, you…

  • Make it much easier to sell the sponsorship internally
  • Make it much easier to say “yes”
  • Increase your value
  • Created a point of difference with other rightsholders
  • Make implementation easier, as you’ve thought through most of the leverage for them
  • Reduced the risk around postponements and cancellations

If you think about the last point in terms of the pandemic, the difference in approach is stark. If your sponsorship deal is anchored on your in-person and social audience, what happens if you end up having to cancel or postpone? Because much of what you’ve promised is suddenly gone. If, on the other hand, you’ve worked with the sponsor to create a multi-faceted, robust sponsorship leverage program, targeting all of the other markets that mean something to them, it builds some resilience into the system.

Sell meaning, passion, and authenticity… not benefits

Sponsors don’t buy a benefits package. They buy the privilege of connecting with people through something they genuinely care about. It’s meaning and passion that drives sponsorship results – not the signage, not the tickets, not the hospitality.

The two most important parts of a good sponsorship proposal are…

  • Why people care – What are the main reasons people love your property? How does that drive their engagement? What does the property mean to them?
  • How the sponsor can harness that meaning and passion to drive alignment, advocacy, and other marketing objectives. Again, we’re talking about leverage, and how you need to feed them those ideas

Looking at this through the lens of the pandemic or some other force majeure, if a live event is cancelled, most of the benefits are no longer relevant. But the passion and meaning are still there. Those fans are still having a fan experience, even if it may be very different to what they were expecting. The authenticity the sponsor can demonstrate is still there. Worst case scenario, a sponsor can pivot their activities to mirror the new fan experience.

Bigger picture, most of the benefits you offer are limited in scope. They have limited time frame or geography. Meaning, passion, and authenticity have no limits. A sponsor can align with people on an emotional level, and add value to their fan experience, wherever they are and at any time of year. This makes your property punch way above its weight, in terms of sponsor leverageability and value.

Not sure how to reframe your properties and create the types of offers I’ve outlined? Here are two good resources:

Don’t identify assets, identify opportunities

Following on from the above point, stop identifying “assets”. This is basically code for figuring out what you can commercialise, with the usual approach being to sell sponsorship – primarily in the form of branding – to all of them. The more places sponsors can brand, the more revenue you’ll make.

This thinking makes my head explode.

Stop trying to commercialise assets. Commercialise fan passion. Commercialise meaning. That’s where the real value is.

Identifying assets is about you and your need, and virtually nothing to do with sponsor needs. You have some unbranded real estate, so sell sponsorship! You have a new idea for a promotion, sell sponsorship of the promotion! You have a new kids’ club initiative, sell sponsorship for it! But what you’re selling is rarely comprehensive enough to leverage, leaving only very old school sponsors interested in what equates to a low-value logo slap.

Australia has one major sports league where many of the teams have embraced this approach. Every single thing that can be branded is branded, and with a dizzying array of brands. It’s as if they’ve tried to create a way for every single company owned by a fan to get a piece of the action, and the result is what Australians would call a dogs’ breakfast. The team has sponsors, every player is announced with an individual sponsor, chairs and bottles and trainers and exercise bikes are all branded. It’s cluttered, ridiculous, and overbearing. Those sponsors may be impressed with the first generation exposure they get, but I guarantee the fans are doing their best to tune it all out.

Sophisticated sponsors don’t want piecemeal assets. They want a robust, customised sponsorship, often flowing across multiple properties and lots of benefits. They want a legitimately leverageable opportunity that will serve as a platform for achieving their marketing ends.

So stop trying to commercialise assets. Commercialise fan passion. Commercialise meaning. That’s where the real value is.

Minimise guaranteed social mentions

I make no bones about it. I’m not a fan of selling guaranteed sponsor mentions. If you feel like you have to offer this benefit, offer the absolute minimum guarantee.

Instead, treat your own social like earned media. Sponsors have to do something that is worth sharing, in which case, share the hell out of it. Tell them that.

This doesn’t mean sponsors need to do one gigantic leverage strategy after another, just to get a run on your socials. Not at all. Looking back at the worst of the pandemic, smart sponsors were creating all manner of interesting, creative, and scrappy content – content worth sharing, and a steady stream of it. Yeah, sometimes the production values weren’t great, but fans care a lot less about that than having regular, compelling, and exclusive content

Do multi-year deals

There are many reasons you should want multi-year deals, and I’ve outlined lots of them in this blog. But the pandemic really hammered home one of the biggest reasons you should be doing multi-year contracts: It insulates your cash flow, if there’s a problem.

Annual contracts are easy to exit if times get tough. They’re easy to exit if a sponsor’s brand strategy changes. They’re easy to exit if there’s a new brand manager, who just wants to change things up.

But if you’ve got a sponsor on a three-year deal, and something happens that impacts sponsor budgets – financial trouble, a merger, recession, etc – that contract may well be what saves you from any knee-jerk decisions to exit. That contract will save you from a brand manager making rash decisions. And if their sponsorship strategy does go in a different direction, that contract will allow you to renegotiate benefits to suit the new strategy. Finally, even if they still want to exit at the end of the contract, at least you’ve probably had more notice, so you can be in the market to replace them.

Build out your force majeure clauses

While you’re shifting to multi-year contracts, you also need to build in robust options around force majeure. Before the pandemic, most contracts just allowed a sponsor to exit the contract if the property wasn’t delivered, as promised. Either the sponsor stayed in, or they exited, with no other options formalised in the contract.

What you need to do is add some alternatives to an exit, and an undertaking to work in good faith to resolve the issue to the satisfaction of both parties. Those options could include:

  • Extending the contract timeframe at no extra cost, to make up for any non-delivery of a property
  • Renegotiating benefits, so the sponsor gets benefits that are still valuable and leverageable, even if the property is cancelled or substantially different than promised
  • Negotiating a discount, commensurate with the proportion of the contract that hasn’t been delivered. (Note, this can be a very contentious way to sort out non-delivery issues, as both sides often have firm ideas on the value of what wasn’t delivered.)

While this clearly protects your interests, it’s also good for the sponsor, as it encourages collaboration and lateral thinking.

Need more assistance?

For all you need to know about sponsorship sales and servicing, you may want to get a copy of The Sponsorship Seeker’s Toolkit 4th Edition. 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, covering the whole sales process, with lots of inclusions. Interested? Check out Getting to “Yes”.

I’ve also got self-paced, online sponsorship training courses for both sponsors and rightsholders. Get the details and links to course outlines and reviews here.

If you need additional assistance, I offer sponsorship consulting and strategy sessions, sponsorship training, and sponsorship coaching. I also offer a comprehensive Sponsorship Systems Design service for large, diverse, and decentralised organisations. Please feel free to drop me a line to discuss.

Please note, I do not offer a sponsorship broker service, and can’t sell sponsorship on your behalf. You may find someone appropriate on my sponsorship broker registry.

© Kim Skildum-Reid. All rights reserved. To enquire about republishing or distribution, please see the blog and white paper reprints page.

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