How to Recession-Proof Your Sponsorship Opportunity
Recessions are one of those words that no one ever wants to hear. It seems like just yesterday that we overcame the 2008 recession, and now here we are, possibly plummeting toward another. You might worry what this means for your sponsorship prospects, and if they’re willing to continue working together. Can you recession-proof your sponsorship opportunity, and if so, how?
You can recession-proof your sponsorship opportunity, and here’s how:
- Sharpen your audience data
- Create activations worth paying for
- Know your value
- Prove ROI
- Pivot if something doesn’t work
- Ask for sponsor feedback
- Prospect aggressively
- Produce fulfillment reports
- Offer bonuses or discounts for multiyear agreements
This guide will paint an accurate picture of how recessions affect sponsorship and what you can do to experience as few interruptions as possible.
Sponsorship in the Time of a Recession – Is It Really So Bad?
Although I wasn’t running the Sponsorship Collective during the 2008 recession, I’ve since gone back and studied the data to see what effect a recession has on sponsorship.
Granted, it wasn’t by much, and the spending rate was barely higher in 2009, which is when it’s agreed the 2008 recession ended, but it proves something.
Sponsorship didn’t stop when the recession impacted the planet.
So why is that?
Well, it comes down to a few things, really.
For starters, sponsorship is marketing. Even when companies have to pull their purse strings extra tight, they must still invest in building their client or audience base. They can’t afford to stop marketing altogether, which means they can’t afford to stop doing sponsorship, either.
Will they decrease the number of available sponsorship deals? Yes, of course. Will they reduce their sponsorship spending? Certainly, but sponsorship doesn’t stop.
Another reason sponsorship isn’t as globally impacted by the recession is that not all industries experience a recession in the same way. Some will markedly decline, others will remain in neutral territory, and some may even flourish.
For example, utilities, telecommunications services, healthcare, and consumer staple products don’t see the same rate of decline during a recession. If anything, these industries experience an uptick in profit.
That’s why it helps to choose your industry partners wisely in a recession.
9 Ways to Recession-Proof Your Sponsorship Opportunity
I hope I could deliver some peace of mind to you that your sponsorship program doesn’t have to grind to a halt just because we’re on the cusp of or actively involved in another global recession. Sponsorship will still continue, and a company could decide to pick up your opportunity!
You can increase the likelihood of that happening and protect your future sponsorship opportunities by doing the following.
1. Sharpen Your Audience Data
I never advocate for sponsorship seekers to present broad audience data to sponsors because it’s simply not what they want to see.
A sponsor has a well-defined target audience, and if you don’t, they won’t bother asking why. They’re simply going to move on to a partner who does.
In a recession, it’s even more integral to have sharp, plentiful, rich audience data. Sponsors cannot afford to waste time or money on partners who won’t increase their target market, so you have to prove you have an audience that will do that.
How do you even begin to do it? You must issue an audience survey to ask about their opinions, motivations, geographics, demographics, and interest in your company or organization and its events, programs, or opportunities.
From there, you must hyper-segment your audience. I recommend 25 data points for each audience group.
Who are they? How old? Where do they live? Who do they work for and what is their job title? How much money do they make? What brands do they like? What was the last event they attended?
By going down the line and asking questions like these, you can easily create those 25 data points per audience group. It takes time, but the highly segmented audience groups you can present to a sponsor make it all worth it.
2. Create Activations Worth Paying For
Activations are a form of experiential marketing, and you’ll recall that I said companies won’t continue to stop paying for marketing, even in a recession.
However, companies are going to be a lot choosier. While in non-recession times, they might have accepted less inspired activations, that’s not going to fly now.
Photo walls? They were cool at first, but unless you can reinvent the wheel with yours, it’s probably not going to earn you the positive response you’re hoping for. Branded phone charging stations? Same thing.
You must be willing to think way outside the box with activations in a recession. It’s still okay to take inspiration from other activations you’ve seen or heard of and branch off from their ideas, but you have to really hit the nail on the head.
That’s what activations are about most of all, fulfilling a sponsor’s need and an audience’s need. Sponsors will more closely scrutinize activation ideas before saying yes in a recession, so you can’t get by on nothing more than a cool idea.
Before you pitch your activation idea to the prospect, ask a third-party connection that if they had X issues, would they be willing to pay for Y activation at the rate you’re proposing. If they say no, you should seriously think about retooling the activation, then going to your sponsor.
3. Know Your Value
Have you ever gotten a sponsorship deal by guessing at your value? You got lucky, but I’ll assure you, lightning rarely strikes the same place twice.
You must know your sponsorship value. I’d recommend this even without a possible impending recession because it’s a sponsorship best practice.
Those sponsorship seekers who don’t know their value usually don’t know how to value their sponsorship properties. Either that, or they’re looking to take the easy way by guessing rather than calculating.
Valuation isn’t difficult once you get into the swing of it. It’s time-consuming, sure, but all sponsorship is.
Valuing your assets and activations requires researching the market value of each and determining if you should leave the value as is or increase or decrease it.
This is where many sponsorship seekers get tripped up. They increase all their asset prices over market value even though they shouldn’t.
You must honestly assess what you bring to the table when valuing. It’s okay if some of your assets aren’t worth as much as you were expecting. You can table them for a later opportunity or offer them anyway.
Your sponsorship property is still worth something, especially if it’s primarily comprised of high-value and mid-value assets and activations.
And if it isn’t, the worst thing you can do is ratchet up the value of your assets and activations to maximize the amount of money you ask the sponsor for. Instead, you need to look at the quality of what you’re offering a sponsor and ask what you can do to make it more valuable.
4. Prove ROI
Here’s yet another great reason why you can’t lie about the value of your assets and activations. You must prove that you can drive ROI for a sponsor if they choose to spend money on you.
If your entire sponsorship property is based on a lie (i.e., you fudged or flubbed the valuation), it will be difficult to prove ROI. You might lie more, digging yourself into a deeper hole that you can’t easily get out of.
The sponsor will catch on at some point, likely before you two pen an official deal, and then you’re back at square one.
If you fairly valued your activations and assets and discovered high-value offerings, focus on those and how the sponsor will make more money or win more customers with your services.
For example, if your activation idea is a contest (I’m just going with something simple to prove a point) because your sponsor wants more signups, you can explain how many attendees regularly go to your events and how they engage during the event.
Using this historical data, you can tell the sponsor that you should expect X number of attendees, Y percent which is likely to sign up for their contest.
You can still prove ROI if you don’t have past sponsorship experience. Think of your most profitable business partnerships and write case studies. I would recommend case studies even if you have an event history, as they only further prove why you’re a valuable partner to work with.
5. Pivot If Something Doesn’t Work
Sponsorship is not a linear process. If anything, it’s more like a squiggly or zig-zaggy line, as you’re going to think you’re onto something, discover it doesn’t work, then have to reconfigure your plans and try again.
That’s not exclusive to recession times. Sponsorship techniques and tactics will fail, and the sooner you can recognize they’re not working, the better. It’s even more crucial to be prudent and aware during an economic downturn.
I’m not recommending you try something for two days, then give up on it when it doesn’t drive results. If that’s the route you take, then it will seem like nothing works because sponsorship opportunities rarely materialize or develop in days. It’s usually weeks to months, sometimes longer.
However, if you’ve spent two weeks cold-calling the same sponsor and don’t yet have any other prospects in the pipeline, that’s a clear-cut sign that what you’re doing isn’t working.
You need to move on. Whether it’s out of disinterest or a lack of funds from the recession, that sponsor will not respond to you, and you likely cannot wait another week to hear back.
To help you avoid wasting your time, here are some things that never work in sponsorship. Don’t even bother trying them.
- Filling out a company’s sponsorship form on their website
- Sending a sponsorship proposal unsolicited
- Calling or emailing incessantly
- Using the first meeting for your sales pitch rather than discovery
- Copying someone else’s valuations or making up your own numbers
6. Ask for Sponsor Feedback
A sponsor is a marketing partner. Although I don’t love that word, partner, it’s not without its merits.
A partner is an equal, right? You look out for their best interests, and they do the same for you.
That means taking a lone-wolf approach to sponsorship is the wrong way to go here. You must involve your sponsor throughout the planning process. More so than just asking for their opinions, make sure you request their feedback too.
Remember, they’re investing in you during a time when they really could have used that money elsewhere. They want to ensure they get good value for their money, so call them, email them, or host a Zoom meeting every week or so to check in.
Tell them what you’re working on, then ask for their thoughts. This way, if they don’t like how the sponsorship opportunity has progressed, it’s hopefully before you sink their funds too deeply into a venture.
You can pull back, regroup, and shift in a different direction. Remember, sponsorship isn’t linear!
7. Prospect Aggressively
I would tell a client with a typical sponsorship property to build a robust prospects list that’s 30 to 60 companies deep. I’ll double-down on that advice in a recession.
It’s not hard to do if you use your audience survey as your guide. I like to think of it as a four-tiered process, with each tier a circle.
The first circle is the brands your audience mentioned in their survey, the second circle is the companies that advertise to audiences of those brands, the third circle is companies who should advertise to consumers of those brands, and the fourth circle is competitors of every brand you listed.
It’s not enough to have a prospect list five or 10 companies deep during a recession. You must expect companies to drop out more often than they do during more economically rich times.
If you put all your eggs in one sponsor’s basket, you’re going to end up with a batch of broken eggs, and eggs are expensive these days.
Diversifying your pipeline ensures that when–not if–prospects drop out, you’re not left scrambling to find the next one. You can simply move on to the next name on the list.
8. Produce Fulfillment Reports
Remember my point before about proving ROI to a sponsor? That doesn’t stop when you two sign a contract.
If anything, you want to prove that you delivered much more so during a recession than at any other time. Why? This increases your chances of retaining a sponsor.
Keeping sponsors increases your financial security and makes planning next year’s event easier, so please, don’t forego the fulfillment report.
I recommend sitting down and compiling the contents of the report the day after your event, program, or opportunity, maybe two days, tops. The report should include your attendance details, with photos to show how full the event hall was.
Share your audience data again, include a full list of your deliverables, and expound on whether you delivered as expected, overachieved, or underachieved.
9. Offer Bonuses or Discounts for Multiyear Agreements
Writing a fulfillment report is a great excuse to meet with your sponsor again to go over the material. You two will talk frankly about what went well with the event and what could be done better next time.
If you’re interested in discussing renegotiation and your sponsor was mostly pleased to work with you, there’s no better time to do it than now.
Usually, I advocate for sponsors to increase their earnings with multiyear deals if possible. In a scenario like a recession, it’s probably not possible.
If anything, now is the time to pull out discounts or bonuses if the sponsor signs on for several years.
You might end up making slightly less money year over year, but you have reliable money. In a recession, that’s worth its weight in gold!
A recession doesn’t have to mean the end of your sponsorship plans. Some companies excel in a recession, and even among those that don’t, they might not necessarily shut their doors to sponsorship altogether.
I hope this guide helps you bolster your sponsorship opportunity to continue earning new sponsors even in a recession!
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.