Multiyear Sponsorship Agreements

Imagine this: your event or program just wrapped up for another ultra-successful year. You’re exhausted but satisfied.

It’s time to rest, right? Absolutely not! It’s time to begin searching for sponsors all over again to ensure you have enough for next year’s event.

It’s not like you haven’t had sponsors before, but they’re all single-year arrangements, maybe two years long at most. 

If you’re interested in multiyear sponsorship agreements, they don’t just appear out of thin air. You have to chase them. In today’s post, that’s exactly what I’ll tell you how to do, and successfully, at that. 

The Benefits of a Multiyear Sponsorship Agreement for the Sponsorship Seeker

I’ve discussed the concept of multiyear sponsorship deals on the blog before, so I won’t dive too deep into the benefits that you can enjoy. 

I will say that the peace of mind you’ll experience will make planning future events so much easier. You won’t have to fret over how you’ll put the pieces of your budget together because you’ll know that Sponsor A will contribute X amount and Sponsor B will contribute Y amount.

You can add X and Y amounts together and then figure out how much more funding you need. Maybe it’s half your budget. Perhaps it’s only a quarter. Either way, those are great positions to find yourself in. 

You’ll save time too. Instead of prospecting for five new sponsors, if you retain two, you only have to prospect for three. With the extra time you have, you can pour that into your event and make it better in different ways.

Here’s a perk I didn’t talk about – promotions. All sponsors have different goals, but none mind promotion. It builds awareness, introduces products and services, and strengthens brands. 

With a multiyear sponsorship agreement in the cards, you can begin promoting a sponsor for your next event immediately after the current event ends. 

This sounds like it’s only good for the sponsor, but that’s not true. You benefit because if you have a big name tied to your event from the moment it’s announced, that’s going to get more attention to your event from the get-go. 

The Benefits of a Multiyear Sponsorship Agreement for the Sponsor

Now let’s switch gears and look at how a sponsor benefits. After all, if you’ve never successfully gotten a sponsor to agree to a multiyear arrangement, perhaps it’s because you’re not touting these benefits. 

Longer-Term Branding

Building a brand is one of those marketing jobs that never ends. A company can always do more to further its current brand, and by the time they get that brand to a place they like, they may decide to expand on it or change brand direction. 

One event–even a really good event like yours–isn’t enough to solidify a brand. During that event, your audience gets only limited exposure to the company. 

What will really help drive home a brand is involvement in your event over several years, such as three or five or even more years. The recurrence of the sponsor at your events gives your audience the opportunity to become innately familiar with the sponsor and its brand. 

Higher-Quality Activations 

Ah, activations. They’re the bane of many sponsorship seeker’s existences, even though I always stress on the blog (and in my training programs) how activations don’t have to be so hard. 

Still, I know you want to make a good impression, especially if you’re still new to this whole sponsorship thing, so you overthink and overthink activations some more. I get it! 

If you’re on the overthinking activations bandwagon, here’s some relief. You won’t struggle nearly as much to come up with good activations for the sponsor if you’ve worked with them for years.

Okay, so technically this benefits you as much as them, but that’s okay. The sponsor will have higher-quality activations to look forward to, you’ll have less stress, it’s a win-win.

Now, just because you know what a sponsor likes regarding activations doesn’t mean you can recycle the same ones from last year. You can build on activations from last year, sure, but you want to come up with unique offerings each time.

And build upon activations, you just may. As you earn more money from longer-term sponsorship deals, it’s no longer farfetched to ask for larger sums to make bigger or more ornate activations come to life. 

Bigger isn’t always better, of course, but you can continually make a splash with your sponsor’s activations and get them the kind of attention and drive the outcomes they want by partnering with you. 

Faster Approvals

You remember what it was like to have to work around the gatekeeper at the sponsor company, right? It was only last year that that’s exactly what you did. 

Well, now that you have an in with the company or at least some representatives in the company’s sponsorship department, you’ll have a lot less red tape to cut through when you want to make decisions.

It’s not only you who can fast-track the decision-making but the sponsor too. You have a proven track record, so they probably don’t need to ask their boss, and their boss’s boss, and the financial manager in Hong Kong for permission to make sponsorship-related funding decisions. 

The quicker approval rates keep the sponsorship arrangement moving along on time so there’s far less of that stressful crunch as your event draws near. 

Why Isn’t Multiyear Sponsorship More Common?

You don’t understand. If multiyear sponsorship arrangements pose so many benefits for both the sponsorship seeker and the sponsor themselves, why don’t more sponsors agree to them? 

You might have had an assortment of sponsors over the years, and not one of them mentioned a multiyear year.

Well, yeah, they usually don’t. That’s not to say a sponsor isn’t interested or couldn’t become interested, but between you and them, you should mention the potential of a multiyear deal, not the sponsor. 

I know, I know, it seems daring to ask for a multiyear deal, as it also means requesting more money. You’ve seen the benefits though and know it’s worth it. 

The Amount Matters

So let’s talk money, shall we? 

If you only have a $2,000 exhibiting space, it’s a waste of your time and the sponsor’s time to talk multiyear sponsorship deals. 

Your sponsorship value should be at least $25,000 for one of these deals to make enough sense to pursue. At that price point, you should ask for a three-year sponsorship deal.

If you have six-figure sponsorship, you can propose a five-year agreement. You might not get it, but you’ll at least get three years by proposing five years. You could just get five years too.

If you only propose three years with a bigger deal like that, then that’s all you’ll get!

Should You Assume the Multiyear Sale?

I’m always reticent to recommend sponsorship seekers assume anything. So many times I’ve seen sponsorship seekers get a case of happy ears when a sponsor asks them to send a proposal and they think they’ve got the deal in the bag.

However, it’s a little different with multiyear sponsorship.

A client I had added it to her policy that if a sponsorship deal is valued over X amount, she’d automatically mention a multiyear arrangement to the potential sponsor. 

In her case, the cap was $30,000. So if she met with a promising sponsorship prospect and they agreed on an activation, but that activation would cost $30,000 or more, she had to talk about the policy.

She’d tell a sponsor that she only looked at multiyear sponsorship deals at that level. At that point, the sponsor has the right to back out if they’re not interested or can’t financially fulfill a multiyear deal, and that’s fine, since the arrangement never got that far anyway.

What usually ended up happening for this client was just the opposite. More sponsors agreed to her multiyear deal when she proposed it this way rather than letting an event play out and then approaching a sponsor about a multiyear deal after the event. 

If you’re interested in taking this approach, you’ve got to be brave. Sponsors want to work with professionals, not amateurs. Walk in confidently, mention your policy, and see how the chips fall. Most times, you’ll quite like where they land!

The Right of First Refusal Does Not Equal a Multi-Year Deal

What do sponsorship and real estate have in common? They both usually include the right of first refusal in contracts.

If you’re unfamiliar, the right of first refusal is a contract clause allowing a party to make a first offer before other negotiations can transpire.

So in real estate, one party would have the right to make an offer on a house, and the homeowner and seller can’t negotiate with anyone else without reviewing that offer first. 

In sponsorship, the right of first refusal means that a sponsor gets first dibs on a sponsorship offer before you as the sponsorship seeker can offer a sponsorship slot to other interested prospects. 

I’m not saying you shouldn’t use the right of first refusal in your sponsorship contracts. In fact, I’m not a lawyer, and I’m in no way trying to give you legal advice.

However, I will say this. Many sponsorship seekers assume that adding the right of first refusal to their sponsorship contracts somehow automatically elevates an arrangement to a multiyear deal.

That’s not what’s happening at all. If anything, because you’re legally limiting who can join your sponsorship roster, you might struggle more to get sponsors, including short and long-term deals alike.

Incorporating Multiyear Sponsorship Arrangements into a Renewal Strategy

Earlier, I recommended building multiyear deals into your company policy and letting sponsors know as you dictate terms and money during negotiations (or before). 

That’s a great tip moving forward, but what if you just ended an event and want to broach the subject of a multiyear sponsorship arrangement now? You need a solid renewal strategy, and I’m here to help. 

When you sit down with your sponsor and deliver your completed fulfillment report, you’ll have the opportunity to discuss at length how the event went and if you both deemed it a success. 

This meeting is your chance. Consider how you can leverage the fulfillment report and use it as the launching pad into a multiyear sponsorship deal.

It can be done, I promise! My client with the multiyear policy also pulled this off. And no, I swear she’s not some sponsorship guru or wizard. She just knows her stuff. 

This client closed a three-year multiyear deal with a sponsor with a rock-solid renewal strategy. She put together her fulfillment report, sat down with the sponsor for a meeting to discuss its contents, and then asked to put together a draft proposal with a couple of ideas for a future partnership.

One option she recommended was another year of the same deal they had before, but with higher prices than last year. You can only get away with this by offering higher-value assets and activations or by proving that your event grew substantially and that next year, being in the event would be a much bigger draw.

The second option she recommended to her sponsor was a three-year deal without a price hike. She also suggested throwing in a few additional activations for free as a thank-you for agreeing to the long-term deal.

The sponsor, unsurprisingly, chose the second deal. 

If you continue with the first model, you’ll possibly secure the sponsor again, but eventually, you’ll price them out of being able to do business with you. That doesn’t guarantee sponsorship.

The second deal does guarantee sponsorship and for three years. That’s three years of consistent cashflow. Maybe you’re not making more money than with the first model, but you’re making more consistent money. 

Conclusion 

Almost every sponsorship seeker wants a multiyear deal, but few know how to go about doing it. It’s about more than asking for more money. You must provide value to make it worth a sponsor’s while to sign on to a multiyear deal with you. 

This post should serve as a great starting point for strategizing how you can begin securing sponsors for longer-term arrangements. Good luck!