Why Governments Should Never Put Sponsorship Out to Tender

Why You Should Never Put a Sponsorship Out to TenderOver the years, I’ve had a steady stream of questions about putting sponsorship out to tender. The questions invariably come from government, and often from a dismayed member of the marketing department, who is having this process thrust upon them by bean-counters.

My advice to all of them is the same: Don’t do it.

Don’t get me wrong, I can totally understand the appeal of tenders to government – the transparency, the level playing field, yada yada. But the reality of sponsorship tenders is that they are counterproductive on many, many levels.

Sponsorship has nothing to do with procurement

Procurement is about crunching numbers: Does the product or service meet our minimum requirements and how much will it cost us?

Selling sponsorship is not about crunching numbers. It’s about strategy and creativity. It’s about helping a sponsor connect with and nurture their relationship with people. It’s about giving them a platform to get returns against their objectives. It’s about adding value to the fans of your property. Sponsorship is complex and different with every sponsorship you sell, and trying to “procure” a sponsor will be about as successful as “procuring” a spouse.

All brands are not equal

The call-for-tenders approach is clearly intended to create that level playing field. The problem is that sponsorship isn’t level and there are more and less appropriate sponsors for any given event or program.

Every company and every brand have their own values and attributes, and some of those are simply better matches for your properties than others. Some sponsors also bring many non-cash benefits to the table, such as access to expertise or infrastructure, access to a larger or different market, or a leverage program that adds real value to the fan experience.

Making the choice of sponsors about who offers the most money, not who is the best match, devalues some of the most valuable aspects of a sponsor relationship. Unfortunately, you can’t then go back and say that you’ll weigh that into the tender process, because that nullifies the whole premise of a tender.

Uncustomised offers are worth less to genuine sponsors (if they’re interested at all)

Sponsors have become very sophisticated. They know what they want from a property – government or not – and that includes:

  • An understanding of their specific objectives and target markets
  • Creative ideas for how they can leverage the opportunity offered into the objectives they need to achieve
  • A fully customised proposal, presenting a business case that they can then sell internally

In other words, what sponsors want is polar opposite to what tenders can offer. Seriously, a tender is about companies offering a fixed price for a fixed set of benefits. That ticks not one sponsor hot button, and when sponsors routinely get dozens, if not hundreds or thousands, of sponsorship proposals coming to them every month, why would they seek out something as lame as this?

For more on what goes into a proper sponsorship proposal, see my video tutorial, Sponsorship Proposal Basics in About 15 Minutes.

It makes you look like amateurs

Really. You’ll look like you don’t know what you’re doing, and sponsors don’t want to invest in organisations who appear to be lacking key skills, as they know their job will be harder. And why would they invest in your property, when they have countless other, more sophisticated, opportunities dropping into their inboxes every single day?

More likely to be dodgy (not less)

What sponsor in their right mind would actually want to tender? Companies who are specifically trying to curry favour with government, that’s who.

Back to that level-playing-field thing… So, if brand fit and non-cash benefits aren’t taken into account and, by virtue of the process, the bids are for a fixed set of uninspired benefits, what sponsor in their right mind would actually want it?

Companies who are specifically trying to curry favour with government, that’s who.

That’s right, the only companies who are going to be interested in this “opportunity” are the ones who are motivated by exactly what government is trying to avoid. And you can say there will be no favouritism until you’re blue in the face; it won’t matter. If a company tenders, odds on, it’s either because they believe they’ll get a backhanded favour at some point, or because they’re doing some government bigwig a favour (and will want one in return).

Have I convinced you yet?

Tendering sponsorships is a bad idea. It was a bad idea 20 years ago, when most of sponsorship’s other bad ideas were considered great.

If the point is that you want a sponsorship process that’s transparent and defensible, then just make it that way. It’s not that hard. Create and live by a sponsorship policy that…

  • Makes your criteria for seeking sponsorship very clear. You are seeking a natural fit with a sponsor who will add value to the fan experience, and bring both cash and non-cash benefits to the partnership.
  • Makes the sponsorship sales process very clear. To evoke the highest realistic level of partnership, you will research the needs and markets of the sponsor and create a customised offer that addresses those needs.

And when you’ve done a deal, announce why. Issue a statement about the genuine marketing objectives the sponsor is seeking to achieve and the benefits of the sponsorship to both government and the community.

The bean-counters still aren’t appeased? The compromise is to do a call for Expressions of Interest. Basically, you’re telling sponsors to let you know if they’re interested, at which point, you will do your research on their needs and prepare a proposal, just like you would for any other sponsor. That doesn’t stop you from targeting the appropriate sponsors you’ve already identified, but it allows any other interested company to be part of the pool that you’ll pitch.

It’s not perfect, but it’s a damn-sight better than going out to tender.

If you need a sponsorship policy template, you’ll find one in The Sponsorship Seeker’s Toolkit.

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“.

If you need additional assistance, I offer sponsorship consulting and strategy sessions, sponsorship training, and sponsorship coaching. I also offer a comprehensive sponsorship capacity-building 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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