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Should You Hire a Commission-Based Sponsorship Consultant? 

by | May 22, 2023

Why you can trust Sponsorship Collective

  • The Sponsorship Collective has worked with over 1000 clients from every property type all over North America and Europe, working with properties at the $50,000 level to multi-million dollar campaigns, events and multi-year naming rights deals
  • We have published over 300 YouTube videos, written over 500,000 words on the topic and published dozens of research reports covering every topic in the world of sponsorship
  • All of our coaches and consultants have real world experience in sponsorship sales

Sponsorship isn’t something companies hand out like candy. You have to chase it, work for it, and offer something of value to achieve it. Some sponsorship seekers try to find other ways to reach the finish line, such as sponsorship consultancy. What is a commission-based sponsorship consultant?

A sponsorship consultant develops professional sponsor relationships for you, prospects for sponsors, coordinates during your event, and puts together proposals. 

As advantageous as they sound, sponsorship consultants and brokers are rarely the knights in shining armor you might envision them. This guide will explain why.

What Is a Commission-Based Sponsorship Consultant? What About a Sponsorship Broker? 

Consultancy is a common job. You’ve got management consulting, information technology consulting, business consulting, operations management consulting, and now sponsorship consulting as well. 

However, sponsorship consultants are one thing, and brokers are another. Consultants do in-house work to help a property develop opportunities while brokers work on a commission basis. 

A sponsorship consultant or broker has a variety of responsibilities, so let’s review them.

Goal and Objective Strategizing 

The first part of the job is learning all about what you want.

A broker can’t select sponsorship prospects for you without understanding your company or organization’s likes, dislikes, preferences, wants, and needs. 

They will also ask about your short-term and long-term objectives and goals, current initiatives, and what kinds of assets and activations you can deliver. 

Sponsor Prospecting

Do you find that you lack the time for sponsorship prospecting, or you’ve tried it but haven’t had much success? Once you move into sponsorship brokerage and consulting, it’s their job to prospect for sponsors for you.

They’ll take the information they have about you and, considering your needs and audience, select some sponsors they think might be suitable partners for your upcoming event, program, or opportunity.

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Relationship Development and Sponsor Communication 

Building a professional relationship with a sponsor takes a lot of time and hard work. It’s a sponsorship broker’s job to take that duty out of your hands and do it themselves.

They’ll make the calls and send the emails so you don’t have to agonize over cold communication. The broker will even meet in person with sponsors as feasible. 

If they don’t hear back from a prospect after a certain amount of time, the broker will follow up on your behalf and decide when to move on if they fail to get a response. 

Once they do hear back, they’ll continue to build a relationship with the sponsor for your company or organization so you can focus on the other elements of planning your event or opportunity. 

Event Coordination 

Speaking of events, your sponsorship consultant will be available to coordinate with the sponsor to the end of your event. 

You’ll have your attention pulled 16 ways to Sunday during an event and can’t possibly concentrate on everything. Having a sponsorship consultant or broker in your corner will make your event day just a little bit easier.

Proposal Creation and Presentation 

If there’s one area where sponsorship seekers struggle, it’s writing the sponsorship proposal. Many of the sponsorship seekers I’ve worked with write too much about themselves or their cause and don’t provide enough audience data.

How many hours have you lost writing a sponsorship proposal for each prospect you have? If I had to guess, it’s probably a lot, right?

A sponsorship broker can write the proposal for you. They’ll follow their own writing formula to produce the report, which you should be able to see before a sponsor does.

If you approve of the contents of the sponsorship proposal, you can also count on your consultant to present the proposal to sponsors on your behalf.

If you get nervous doing presentations, you’ll be glad to have the assistance.

Does the Sponsorship Collective Offer Sponsorship Consultancy or Brokerage?

I get asked all the time if we sell sponsorship to people. We don’t, and the reason is because we think it’s a bad deal for the property and the sponsorship industry. Here’s why. 

It’s High-Risk, Low-Reward

I’ve said it before on the blog, but it bears repeating that sponsorship has no magic bullet. There is no button to push or shortcut to take to make all your sponsorship dreams come true. 

Unscrupulous parties know this, and so they claim to be sponsorship brokers who will only take a commission of one or two percent. 

It sounds great, right? Perfect, even, almost too good to be true.

That’s because it is. 

I work with hundreds of sponsorship seekers a year, and while few of them go down the brokerage path, the ones who do have ended up badly burned. They’re often scammed, with no way to get their money back.

Either that or a broker promises the sponsorship seeker the moon and stars and doesn’t deliver either one. 

The sponsorship seeker ends up in the unenviable position of having to start all over with even less time to spare and usually less money too. 

You Could Risk Sponsorship Relationships

I’m in the business of getting clients sponsors, and hopefully not just one time over, but for multiple events/years.

The foundation of a solid sponsorship relationship begins with trust. When you come to a sponsor through a broker or consultant, a sponsor could be suspicious. 

Your relationship with the sponsor could be off on a sour note before anything gets underway.

You’re Not Thinking ROI-Based

Here’s the thing about a sponsorship broker. They’ll only take you on if they know for 100 percent certainty they’ll be successful. 

So what does this tell you, the sponsorship seeker? If a broker is willing to work with you, it means you shouldn’t do it. Why? Your property can be successful and will likely be even more so if you manage it yourself.

However, many sponsorship seekers don’t realize this. They jump at the first broker willing to work with them. This is risk-based decision-making. 

As I discussed in the paragraphs above, sponsorship brokerage has the propensity to blow up in your face. At the very least, you’re out a lot of money that you could have kept attached to your sponsorship property had you had more confidence in yourself and begun thinking more ROI-centric.

More Downsides of a Commission-Based Sponsorship Consultant

It’s Not Cheap 

Between the retainer fees and the commissions, you’re going to spend quite a pretty penny to hire a sponsorship broker. 

If you’re seeking sponsorship in the first place, it’s often because your company or organization does not have the funds to put on an event, program, or opportunity at the scale you originally intended. 

If you don’t even have enough money to pay for your event, how in the world are you going to turn around and pay a sponsorship broker, especially for several years?

You could put your company or organization in the red trying to keep up with a broker’s costs. Almost as bad, you could only break even after working with them. I’ll talk more about this in a bit, so make sure you keep reading. 

Prospects Might Not Be a Match

What kind of criteria does the broke use when prospecting for sponsors? If you don’t know, and they refuse to tell you, that isn’t promising.

I have my own method of sponsorship prospecting that I’ve recommended on the blog before. It’s certainly not the only way to prospect for sponsors, but it’s one that drives results and has done very well for my clients.

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If you don’t know how your broker is prospecting for sponsors, you can’t guarantee the prospects they select are a match for your company or organization.

Working with sponsors who your audience doesn’t resonate with can cause your attendees not to enjoy your event. They won’t interact with your sponsor as much as they could have, which means your sponsor will come up short on their objectives.

You’ll be hard-pressed to get that sponsor to agree to a second year of working together, and you might have decreased attendance next year too.

Your Sponsors Know Your Broker, Not You 

When the sponsorship broker interacts with prospects from the beginning of the sponsorship process until sitting down to negotiate and sign a contract, they’re missing out on critical moments to get to know you.

When you only meet your sponsor right before the event, there is no rapport between you two. The sponsor might not feel as inclined to go all out as they would with a business partner that they have gotten to know.

This can result in a lackluster event for both parties and a failure to renegotiate to work together again because neither side was happy.

Miscommunications Can Occur 

One little miscommunication when working with a broker can have huge repercussions. 

Your broker won’t check in with you every single day, usually only weekly. If they get the ball rolling in the wrong direction, by the time you find out, it can be too late to swing the momentum in the other direction.

Ultimately, their mistakes look bad on them and you since you hired them to begin with. The lack of professionalism can absolutely cost you a future sponsorship deal, as sponsors don’t like to work with amateurs.

Doesn’t Help You Grow

A lot of my clients who have become successful sponsorship seekers have learned from experience. They used my instruction and grew from there. 

Today, the thought of hiring a sponsorship consultant or broker never even crosses their mind, nor should it! After all, they know what they’re doing.

You fail to grow if you rely on brokers to always land you sponsorship deals. You could have two dozen sponsorships under your belt, but you’re still just as green as if this was your first.

After a while, the disconnect between what you promise and who you are can begin to irk sponsors. You’ll recall its sponsors want to work with fellow professionals as they’re seeking to achieve marketing goals, and that’s not something an amateur can do.

The opportunities that have come and passed you by all gave you chances to learn, but because you relied on a consultant or broker, you missed out. You can’t go back and change the past, but you can learn from the future.

However, this now creates an interesting dilemma. It’s much easier and more advantageous to continue doing what you’ve always done: hire a broker. You might be too afraid to strike out on your own, learn from scratch, and make your own mistakes.

You have to choose between reliability and results or difficult growth. Most people choose the former.

Reinforces Bad Behavior

Another interesting side effect of hiring a broker is how it reinforces bad sponsorship behavior.

You’re very passive in the sponsorship process when you have a consultant or broker. Without trying and failing yourself, you’ll never know when to send your sponsorship proposal, how to conduct a discovery meeting, and how to present your sales materials.

If you ever seek sponsorship yourself, you can think you’re doing everything right because you’ve never learned otherwise. 

In the end, when you fail to get sponsorship deals, only then will you realize you’ve been making mistakes all along.

Brokers Don’t Stick Around Forever

Your sponsorship property is like your baby, or at least you hold it in very high regard. The issue with brokerages is they don’t treat your sponsorship property with nearly the same love and care because it’s a dime a dozen to them.

If the broker you hired moves on to a different role, someone else takes over your sponsorship property. Now you have to get to know your broker all over again, just as they get to know you.

You might not like the style the new broker works in, or perhaps they don’t select prospects you feel really gel with your sponsorship goals. 

They could be underachieving compared to the last broker, but guess what? Since you signed a contract, you’re stuck riding out the terms of that contract until it ends no matter who represents you as a broker.

If they’re part of the same company, the contract still stands. 

And When They Go, They Take Your Contacts with Them

Have you ever wondered how sponsorship brokers seem to be a certified treasure trove of contacts? It’s simple, they keep contacts from their clients.

All those contacts you acquired with your broker go with your broker when they leave. They found them, so they have the so-called rights to them, but that can still leave you in a bind. 

You Need a Sponsorship Opportunity of a Certain Value

If you’re still not totally convinced that sponsorship brokerage isn’t all it’s cracked up to be, here’s one more chink in its armor.

If your sponsorship property isn’t valued at $500,000 or higher, a broker won’t work with you. It’s not worth their time. 

Many sponsorship seekers who believe broker are the end-all, be-all sponsorship solution typically have much lower-valued properties. 

By the time you know how to build a $500,000 sponsorship property, you don’t need a broker. You can do everything yourself. 

How Much of a Commission Does a Sponsorship Broker Require? Breaking Down the Math 

Sponsorship brokers are commission-based, which means they rely on commissions to make up the bulk of their income during your working relationship.

So what does the commission look like? Where are they taking the money from, and for how long?

That varies depending on the broker. However, most sponsorship brokers will take a commission on your sales at a rate of 10 to 30 percent over the course of a year. 

That timeframe is the minimum, by the way, so it’s not unheard of for some brokers to lock you into a longer-term deal.

You’re not only paying the commission, at least not with most brokers. You will also have to contend with a retainer fee for each month of service that you hire a broker. The retainer fee will be at least $5,000 but can be more than double that at $12,000.

An Example of How Expensive Sponsorship Brokerage Can Be 

Let me expand on the math a bit more, because it’s often something sponsorship seekers gloss right over. They assume they’ll throw a reasonable fee at a sponsorship broker, especially one who claims a commission rate of one to two percent, and yet reap most of the profit.

Numbers don’t lie, and you’re about to see how costly sponsorship brokerage can truly be. 

Let’s say your sponsorship opportunity is valued at $500,000. You decide to hire a broker, who charges $3,000 to $5,000 per month for at least six months. 

That’s $18,000 already.

The broker will also charge a monthly retainer. The lower the retainer, the higher the commission they take. The higher the retainer, the lower the commission, but no retainer isn’t an option. 

Even if the broker doesn’t achieve results for you in that timeframe, since you must commit to six months (at least in this example, but a commitment of some length is always required), you’re still out $18k.

We’re not done yet, because you have your commission free. If that’s 20 percent, taking 20 percent of $500,000 is $100,000.

However, these fees are evergreen. Even if you stop working with the broker, if you continue to use the sponsors they provided for you for any length of time, you must still pay the commission. 

So now let’s turn the situation on its head. Let’s say you use your internal capacity to build a sponsorship program. You still have $500,000, but you use it very differently.

You spend some of the money on internal staff, maybe $10,000. If you continue to earn $500,000 per year on sponsorship, the amount of earnings quickly outweighs what you spent. Your profit margins are 98 percent in year one and 100 percent by year two.

If you work with a brokerage, your profits will rarely exceed 80 percent. 

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Do Sponsorship Broker Have Any Benefits?

A sponsorship consultant–not a commissions-based broker–can be advantageous, but only in select scenarios.

Allow me to make something clear. These consultants often have waiting lists a mile long. You can throw your name into the hat, but you could wait years before you hear back.

Furthermore, sponsorship consultants charge a premium for their services. It’s often way outside of the price range of most new sponsorship seekers. 

So, Should You Hire a Commission-Based Sponsorship Consultant or Broker?

Now we come to the million-dollar question. Is it in your best interest to hire a sponsorship consultant or broker?

If you ask me, the answer is a resounding no. I know it seems like a sponsorship broker will solve all your problems, but at what cost?

As I talked about in the sections above, you fail to realize your mistakes and grow as a sponsorship seeker when using a sponsorship broker as a crutch.

You can also spend a lot of money on a broker. How can your business or organization get ahead when you’re always hemorrhaging money?

If you feel like you need a sponsorship broker because sponsors never respond to you, I can assure you, you don’t. You’ll get so much more value out of understanding and overcoming your mistakes.

I have an endless variety of resources on the site, from members-only Facebook groups to free templates, blog posts, and my training. You can learn how to be a better sponsorship seeker without using a broker, and I hope you will.