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The goal of a sponsorship investment is to harness the passion generated by the relationship to build awareness, differentiate your product from the competition and reach new market segments.
That very passion you seek to harness may get in the way of negotiating a program that accomplishes business objectives. Organizations seeking sponsors often have the belief that everyone feels as passionately as they do about their cause and don’t fully appreciate that you may want to customize the opportunity so that it’s a win/win for all. Even if you share the same level of passion, focus on business objectives when considering a sponsorship opportunity so passion does not get in the way of critical thinking. It is up to the organization considering a sponsorship to make sure the relationship can create incremental commercial value. Here are two examples of seizing an opportunity and applying critical thinking into the negotiation process to create value for both partners, and for the consumer.
Expanding Assets With A Cross Marketing Opportunity
Opportunity: A destination Ski Resort Association solicited travel industry partners for marketing funds to become an official sponsor in supporting the destination, and their bid for the Winter Olympics. A major rental car company considered the sponsorship proposal and shared their business goals to enhance the proposal for both partners and the consumer.
Proposal: the rental car company requested that the Association’s member ski resorts, logging properties and call centers consider a cross marketing promotion, that included offering a discounted renal car voucher with every vacation package sold. The vouchers were for a reduced rate, which the association partners were encouraged to mark-up to create a new revenue stream. Commissions were also to be paid based on achieving volume incentive levels. Even with their mark-up, resorts would be able to include rental cars at a lower than retail price, which made the product very appealing to consumers of vacation packages.
Results: The majority of Association members bought into the partnership and the Ski Association was provided with the marketing funds they requested from the rental car company. With the widespread launch of the new packaged product, rental car sales increased significantly for both winter and summer seasons. The partners selling vacation packages, with rental cars, experienced increased profits from the mark-up and commissions, and savvy consumers jumped at the deal. The big picture lesson learned from the sponsorship arrangement was that a synergy can be created to bring sponsors together to achieve a common goal. It took the leadership of the Sponsor organization and the shared interest of cross marketing partners to make it come together, including a successful bid to host the Olympic Games.
Small Entrepreneurs Seizing Big Opportunities
Opportunity: A famous Jazz Festival was bringing performers to a nearby Lake Resort area in an effort to extend the event and provide an early summer activity for the vacation destination. Large corporate sponsors applied their marketing know-how to negotiate sponsorship packages based on business goals and demographics. Local entrepreneurs also wanted in on the action, but did not have the resources of the mega-sponsors.
As part of the sponsorship sales team, we worked with local businesses to develop co-op objectives, to uncover tangible opportunities and establish success metrics.
Proposal: One local example is of an owner of a boat storage, repair and sales business. They saw it as an opportunity to differentiate their parity business from the competition, increase awareness and gain clients for the boat sales, storage and repair business. A custom package was created to display a high-end boat at every jazz performance at lakeside venues, along with a trade show style booth manned by the boat retailer’s team. Complementary admission tickets were also included in the deal for promotional purposes. The small business sponsor agreed to use their established media budget to create cross-marketing radio and print sweepstakes and contest promotions with the festival, to drive customers to both organizations’ venues.
Results: Increased awareness objectives were achieved, the boat storage and repair business realized a significant increase in customers and they even sold a high-end, fully loaded boat during the event, which appreciably increased their ROI. For a relatively small investment and re-working their media budget, the local entrepreneur negotiated a package that rivaled the big corporate sponsors.
Steps To Sponsorship Partnerships
When considering a sponsorship opportunity, look at the value and/or the highly-passion driven emotional connection that you can create in the minds of your target customers. Establish your business objectives first, then optimize critical thinking around how the opportunity may enhance your brand image. Strive to become a mutual partner with the sponsorship sales and marketing team to create a new venture that will increase marketing and advertising opportunities for both partners. Inspire people with your sponsorship message and leave no stone unturned as you explore promotional activities that will motivate people to purchase action.