7 Sponsorship Valuation Questions, Concerns and Common Mistakes Part Two

I recently ran a session all about sponsorship valuations. I decided to write a post covering the answers to a few insightful questions that came up during the session, but there was so much to say I had to break this up into two different posts. In part one, we covered four important questions about sponsorship valuation – make sure to check it out if you haven’t yet. We’re not done yet! Here are three additional questions about sponsorship valuation that came up at the session that I think will be helpful to a broader audience.

Let’s dive in!

Q5: What do we do if we don’t have a large audience?

 

The number of impressions matters. Fact. But more important than the number of people in your audience is the quality of those people.

Is a sponsorship opportunity for 1000 people worth more than one for 25 people? All things being equal, yes.

Is a sponsorship opportunity for 1000 university students worth more than 25 people who control corporate budgets in excess of $10 million? Not a chance.

Knowing your audience, who they are, what they do, what they buy, what they value and their influence is far more important than simply having “lots of people” at your event.

Some of the biggest sponsorship deals I’ve ever been involved with were also for some of the smallest audiences I’ve worked with. Even sports teams with massive audiences will sell sponsorship for a higher ROI if they have niche audiences with significant buying power.

Q6: We’re a “small fish in a big pond” and I see groups like XYZ Organization who I feel have a bigger perceived value.

 

This question is based on flawed assumptions. If you are a small organization who knows their audience well and can deliver on their sponsorship promises vs. a massive organization with thousands of sponsors and millions of dollars in revenue, then I would argue that you are in a far better position to service your sponsors, especially if those sponsors only have 5-100K in sponsorship marketing dollars.

Not only would I argue that this is true but I have successfully done so on multiple occasions and wrestled sponsors away from truly juggernaut brands with exactly that argument.

Being a small shop has significant advantages in the sponsorship game and if you aren’t selling this as an asset to your prospects, you’re missing out. If you believe that you can’t compete with the big brands, you’re right…but not based on any independent measure. Instead, you create this reality by believing it to be true.

Q7: How do you sell sponsorship without selling out? Some members/customers/the public may be wary of using a tool if it seems to be in bed with too many corporate sponsors.

 

This question comes up again and again, particularly among charities, not-for-profits and associations in many variations, but is essentially based on the belief that taking money from companies is unethical and wrong.

When I ask the question back to the questioner: “why not just stop taking money from these evil companies then,” the answer is always the same: “because we need it to survive.”

So to be clear, your charity requires the money to survive and the company is evil for giving it to you. I am hesitant to answer this question in any way other than that we need to change our perception of working with companies. You either have a partnership with your sponsors or you don’t. If you don’t, you can’t also take the money!

The truth is this, your membership may not actually have an issue with corporate partnerships and you are making business decisions based on an assumption, which is never a good idea. If your membership or audience does indeed hate corporate money, then you have a double obligation not to take it. The first is to your membership and the second is to your sponsor. They are paying you for a partnership and if that money will create negative will among your supporters, you really can’t take that money in good conscience.

The irony, of course, is that the companies who are trying to give you money prize your audience and want to work with them. If you don’t take their money, they will head to your competitors or they will do traditional advertising and sales without you or, worse, they will engage in ambush marketing. I’ve seen it and I’ve experienced it…and it stinks. The sponsor still gets access to their audience but the charity or not-for-profit gets no money in return and withers and, ironically, struggles to accomplish its mission.

If you can’t create true partnerships then you should stop seeking corporate dollars immediately and look for alternative revenue streams.

ABOUT THE AUTHOR

Chris Baylis is the President and CEO of The Sponsorship Collective and a self-confessed sponsorship geek.

After several years as a sponsor (that’s right, the one investing the money!) Chris decided to cross over to the sponsorship sales side where he has personally closed tens of millions of dollars in sponsorship deals. Chris has been on the front lines of multi-million dollar sponsorship agreements and has built and coached teams to do the same.

Chris now spends his time working with clients to value their assets and build strategies that drive sales. An accomplished speaker and international consultant, Chris has helped his clients raise millions in sponsorship dollars.

Connect with Chris via: The Sponsorship Collective | Twitter | LinkedIn