Sponzillas: How to Deal with a Sponsor that Bullies

Sponsors are becoming more and more strategic in how they make new investments. They’re embarking on strong relationships that are negotiated and leveraged so they benefit the rightsholder and the fans, as well as the sponsor. Mutuality rules the day, as sponsors see that when their partners do better, so do they.

Except for the sponsors that don’t. They don’t care about mutuality, they don’t care about the fans. They see sponsorship as a zero-sum game, and aren’t above bullying rightsholders to get themselves what they think is a win.

My inbox sees no end to dismayed rightsholders caught in no-win situations:

• “Our biggest sponsor wants to renew with exactly the same benefits at a fee 30% lower than last year.” I hear stuff like this all the time.
• Also popular: “A new sponsor is ready to commit, but wants us to change our biggest event to suit them. Our members would hate us if we let that happen, but we really need the money.”
• And the unbelievable: “A long-time sponsor has never had a great relationship with our commercial manager, but our other sponsors love her. Now, this sponsor wants us to replace her or they won’t renew. I can’t believe they asked us to do that!”

What is the deal here? How is it that so many sponsors are becoming better partners, while others have morphed into Sponzillas? Is the industry just attracting power mongers? Most importantly, how do rightsholders manage a relationship with someone who would rather bully than partner? It’s a minefield!

Okay, discounting first. Here’s the lowdown on discounting: Don’t do it.

If a sponsor is on renewal and are prepared to commit to the same package, they have made the decision not to rationalise you out of their portfolio while they have the chance. That is, they see that your property has value to their brand, and they’re just trying to power play you because they think they can. If you capitulate on this, you’re going to look desperate and will spend the remainder of your relationship with them in a one-down position.

To avoid that, I suggest you have three possible ways forward:

• If their concern is about the level of returns they are getting, take the opportunity to totally rework the sponsorship – providing fantastic leveraging ideas for the sponsor and a benefits package that supports those big ideas. In other words, help them get a better return. This whole process is detailed in The Sponsorship Seeker’s Toolkit 4th Edition and my online course, Getting to “Yes”.
• If their concern is budget they really don’t have, and you’re still interested in having them on-board at a lower price point, offer to negotiate the sponsorship benefits to a lower level that is more in line with their budget restrictions.
• Say goodbye.

As for the other types of bullying, don’t even entertain it. Making your property less relevant or appealing to your fans, just to appease a potential sponsor, is never in your best interest. Letting a sponsor dictate staffing decisions is just plain wrong, although you should definitely listen if they have a legitimate concern.

When it comes right down to it, compromising your value, your values, and your organisational self-respect is not worth any amount of money. This is just one play in a long game. Don’t make a decision that will damage you long term.

If you allow principles to guide your choices, it will all work out in the end. That’s not to say that you can tell a potential sponsor to take a hike and another will magically appear, but that you will not regret the decision and you will find another way to achieve your goals. In this situation, you could…

• Work with all of your sponsors to recreate their sponsorships, increasing your value to them, the probability of renewal, and positioning your organisation to new sponsors as an excellent strategic partner. Use the same process outlined in the book and course, referenced above.
• Work with current sponsors to create leverage programs that achieve their objectives and increase your revenue (eg, encourage donations, create a new program and revenue stream, create a program that targets a new market, etc).
• Ask your current sponsors for referrals to other potential sponsors.

I know it’s tough out there – selling sponsorship is a tough game at the best of times – but letting yourself be bullied is not the answer.

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. 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.

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 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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