When we think of sponsors, we’re inclined to think of big businesses and major events, such as Visa and the 2012 Olympics, or Emirates and the Melbourne Cup. However, sponsorship can be a great addition to a small business’s marketing activity.
A sponsorship is not a donation. It is a partnership and both partners should expect to benefit from the arrangement. The community group or event should receive cash, services or products, while the sponsor should be able to promote themselves, resulting in greater brand awareness and sales.
Kim Skildum-Reid, from Sydney-based Power Sponsorship, says that in general, sponsorship is under-utilised by small and medium businesses. “Those that do become sponsors often don’t understand how it operates – thanks, appreciation and your logo won’t automatically translate into commercial returns,” she says. “You should view a sponsorship as a buying opportunity and leverage it across things you’re already spending money on, such as advertising, social media and blogs.”
A typical sponsorship is often assumed to include placement of your logo, tickets, catering / hospitality and official thanks or acknowledgement. However, Skildum-Reid says that best practice diverges significantly from this. “A good sponsorship arrangement should offer different things to different sponsors, depending on their needs,” she says. “For example, if two businesses both sponsor a rugby club, one business might want lots of tickets and hospitality, while another might want more access to intellectual property like club photos, the captain’s blog or behind-the-scenes footage, to leverage in their social media.”
You might want to discuss getting testimonials or endorsements
from participants or players; naming rights to an event; reciprocal access to each others’ mailing lists (if you have permission from
list members); branding on uniforms, equipment or transport;
and reciprocal merchandise sales or appearances at events.
You could also link some of your sponsorship activity and
contributions directly to sales, as Adelaide car dealership
City Holden does – if a member buys a car, the club gets a
generous cash donation.
Skildum-Reid says that the small businesses that do sponsorships often sponsor local events and organisations, but not many are doing national sponsorships. “However, if you have a national sales focus, it might make sense to have a national sponsorship,” she says. “A mum-and-dad shop may be the national market leader.”
How do you choose a good organisation or event to sponsor? Skildum-Reid says: “The absolute essential is that it must be relevant and of interest to at least one segment of your target market. Then you need to look for a natural attribute and value fit. For example, a dirt-track racing event might approach a local accounting business that offers fast tax returns.”
A local sponsorship can cost anything from $1,000 to $10,000. Sponsoring a professional team might set you back well into six figures and top Olympics sponsors pay around $100 million for the opportunity! “The cost of a sponsorship varies depending on whether it’s local, national or international, what event or organisation you sponsor, and what kinds of benefits you receive. Typically, tickets and catering are expensive and in short supply, while access to intellectual property may be more cost-effective,” says Skildum-Reid.
Sponsorships can offer many different avenues to engage with customers. To help identify ways in which you can leverage the opportunity, first ask yourself what you would do if you could do absolutely anything with your sponsorship activity.
“Before you enter a sponsorship negotiation, you need to identify your target market,” says Skildum-Reid. “Then you need to decide what you want to accomplish. How is the sponsorship going to change perceptions and how will it change behaviours? For example, if you run a local butchery, you might decide you want to promote your gourmet sausages and pre-marinated meats. To do that, you might want to use the sponsorship to drive people to your store, or offer taste testings or have a sausage sizzle at events.”
If you’re already signed up as a sponsor with a standard sponsorship package, there may still be ways to improve your existing agreements. One immediate area that Skildum-Reid says businesses can use better is logo placement.
“Many business people make the mistake of thinking that logo exposure will make a difference to how people perceive their brand,” she says. “However, that’s unlikely if they just have their logo out there, with no context. People have no way of knowing if the business is relevant to their lives.
“If you have banners and logo exposure, communicate the basics of the business (for instance, in a tagline like ‘The best gourmet sausages in town’). Include a phone number or a website address too, so that people can contact you or find out more.”
Useful tools and resources
- Power Sponsorship offers consulting, training and coaching to sponsors and sponsorship seekers.
- Expert source: Kim Skildum-Reid has 27 years’ experience in corporate sponsorship consulting and is the author of three books currently in print: The Sponsorship Seeker’s Toolkit (3rd ed) ($45rrp, McGraw-Hill) written with Anne-Marie Grey; The Ambush Marketing Toolkit ($36rrp, McGraw-Hill); and her latest book, The Corporate Sponsorship Toolkit ($45rrp, Freya Press).
The views expressed in this article are those of the author and the interviewees, and not of Australia Post.
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