Sponsorship for Municipalities: Revenue Growth Strategies for Cities and Townships
Sponsorship for municipalities offer a world of opportunities to gain financial support for revenue growth. Whether you assist in running a megacity, or a tiny township, you have access to a community. Every community represents an interesting cross-section of targets companies would like to reach.
As a result, funding could be available for your community to support things important to your residents and businesses from recreational complexes to local annual events. While it might take some effort to find sponsorship opportunities, when done right you not so much find opportunities but create them. Here we help you find ways to find revenue growth for your town or city using sponsorship.
The Benefits of Sponsorship for Municipalities
The obvious benefit of sponsorship is funding. Municipalities depend on taxes and fees associated with the administration to run. However, these funds often provide the bare minimum of revenue for towns to manage their basic infrastructure. From public transportation to basic maintenance such as snow removal and road repairs, the revenue required to operate a municipality is staggering.
Cities and towns tend to operate with a split budget to cover basic operations such as road repairs and capital investment activities such as a new bridge or recreational facility. Because most cities and towns fail to manage their maintenance and repair budget successfully, many fall short for new capital expenditures. By introducing sponsorship opportunities revenue can be generated for a wide range of growth opportunities from improved recreational facilities to infrastructure and improved community events to schools. These amenities can then be used to attract more families, which in turn can be used to attract bigger and better businesses and development projects.
Sponsorship vs Advertising
Sponsorship presents a mutually beneficial agreement between a municipality and a business, association, organization or in some cases even an individual wishing to leverage access to the community in exchange for financial support. Sponsorship can involve many different “assets” ranging from naming rights for a town location or building to sponsoring an annual event or festival.
The key is for the sponsors to gain recognition to help them meet their marketing needs. Advertising is quite different from sponsorship as it is specific to the sale of a certain space in a public area that allows the advertiser to gain exposure for their brand whether it is to sell, influence or educate the public. This could be posters at an arena or on park benches or an ad on the community website or social media channels.
Typical Properties for Municipalities
Municipalities have many opportunities they can share with sponsors including:
- Events, festivals etc.
- Facility naming rights
- Recreation Complexes
- Sports Fields
- Community centers
- Parks and trails
- Tourist routes
- Tourist attractions
- Social media
Each municipality and town has a list of their own specific opportunities from tourist attractions to town fountains or gardens. It just takes some research and creativity to identify the unique opportunities you have to offer.
Building Assets to Sell Sponsors
Your inventory of assets lists the opportunities your town can use to help get sponsors in front of their ideal target audience(s). Typical assets would include:
- Marathons, races and triathlons
- Events and festivals
- Social media
Because your town is constantly changing, your opportunities should too. You should view your assets as a base of opportunities that can be adapted to the needs of your sponsors. The more flexible you are with your assets, the better level of sponsor you will attract. The more successful you are at acquiring sponsors, the more sophisticated your asset list will become.
Your goal is to create opportunities that evolve with your town as well as your sponsors. In fact, you should also be aware of ways to offer multiple opportunities across logical assets, as this creates packages and levels of sponsorship participation options. Being prepared to come up with customized solutions for sponsors tailored to their needs will also make what you have to offer more enticing. Flexibility, innovation, and value-added opportunities will attract a higher-level sponsor.
Audience Segments and Assets
Your audience is your biggest asset. However, to sell to higher-profile sponsors, you must avoid trying to sell too general an audience. Different opportunities attract different audiences. For example, a local playground would only attract kids and parents from the community, while your hockey rink would have higher potential to attract a broader audience if your town hosts teams from other communities, or holds competitions for figure skaters. Each audience presents opportunities, just to different sponsors.
The events your town holds attracts an even more specific audience. These events can segment into targets that share common interests whether it’s wine tasting, antique cars, the renaissance, or Elvis. The more specific you can get on your audience segments, the more value it provides to your prospective sponsors. The larger the audience, the more brand exposure and therefore the more the event or town location is worth.
Sponsorship Valuation for Cities and Towns
Valuation ensures you meet your revenue goals, while also proving the value of your opportunities to sponsors. Your pricing must be reasonable and show sponsors how you can help them meet their marketing goals.
Once you’ve listed your assets and identified your audience segments you can price your assets and create sponsorship packages. It will take some research to see what the going rates are based on like advertising options and audience exposure.
Good places to start include:
- Ads in trade magazines
- Google AdWords for digital opportunities such as social media and website ads
- Pay per click fees charged for similar audiences to yours
- Local paper ads
- Digital ads
- Radio/TV ads
You’re selling exposure, views, readership, etc. attached to each asset you offer. The numbers you can reach for each segment, in hand with a breakdown of the segment will help prove the value you offer. How many people live in town? How many have kids? How many are employed? How many commute? How many events do you hold? What is the average attendance for your events?
These are the types of numbers you can start with, but when you drill down to specifics such as how much people spend, their interests, how often they travel, the video games they play, their hobbies, etc. the more value you bring to potential sponsors.
Your list of assets can also be combined to create packages. Don’t base your packages on the dollar value, but instead look at the possible marketing goals a sponsor might have such as raising brand awareness, increasing sales, or launching a new product. Align your assets with these goals to make it easier for sponsors to spot the package best for their needs. And again, keep customization in mind so your opportunities maintain a more responsive fluidity.
Exclusivity limits the number of sponsors you can have paying for rights for any one asset. It can be an effective way to increase the value of an asset, but can also limit the revenue you can make if not managed properly. In some cases, exclusivity not only makes more sense but also will be expected such as naming rights for a community park or building.
However, when it comes to something such as an event, exclusivity can prove to be less lucrative. In this case, exclusivity can be applied to certain levels, such as having one main presenting sponsor, and then official sponsors within different categories such as an official drink, official snack, or official sunglasses. Exclusivity can also be applied to certain levels of packages or even used as a negotiating tool if you are worried you’re about to lose a major sponsor. It can also be applied to advertising opportunities for posters or digital ads at an arena or recreational facility where you have a single sponsor based on product/service categories.
Multi-year agreements are important for many municipal sponsorships because they reduce the need for ongoing prospecting, while also often contributing to more success for sponsors. Brands can build a presence over time that helps them see improved results. It can also provide consistency for sponsorship opportunities such as events, as people look forward to attending the attractions such as a beer garden sponsored by Pabst Blue Ribbon at the local Oktoberfest.
However, in some cases multi-year commitments are necessary such as naming rights for properties. While you can try to sell this every year, having a consistent name for your local arena, library or recreational facility just makes more sense both for recognition purposes as well as from a financial perspective. You should also be prepared to set an amount above which a sponsor has to sign a multi-year agreement.
An excellent way to increase your reach is to try to form media partnerships. Media sponsor partnerships can bring a larger audience to your sponsors increasing the appeal of what you offer, especially if you can align yourself with one of the major media outlets in your area. Media partnerships also make it easier to prove ROI to sponsors. Is there a local paper that could work with you to create a lifestyle magazine about the area?
Is there a commercial or chamber of commerce magazine or newspaper that might provide you with a large audience to share with sponsors? Is there a local TV channel you could work with to offer sponsorship opportunities? Sponsors will jump at the chance to tap into these major audiences.
The Importance of a Municipal Sponsorship Policy
You should never venture into municipal sponsorship without a policy in place. Your policy is used to define what is allowed for sponsorship agreements based on each asset to ensure no one oversteps boundaries or puts the town at risk. It will also encourage sponsorship agreements by putting fair policies in place in hand with sponsorship best practices. You will ensure individuals representing your municipality understand what is acceptable as well as what is available.
A good policy will also include an in-depth understanding of your sponsorship strategy to ensure it doesn’t inhibit opportunities. You should always remain open to the possibilities new sponsors can present, while not contradicting ideas or opportunities rejected by existing sponsors. You can set parameters and make it easier to draw up agreements that avoid legal issues.
Speaking to a lawyer to help ensure you are avoiding potential legal challenges is always in your best interests. Policies should also delegate authority for approvals based on those on the council who are able to agree to terms and approve sponsorships. Levels of authority could be in relation to levels of payment, duration, and complexity. Policies will also ensure sponsorship opportunities do not infringe on town bylaws such as noise restrictions, or maximum capacities.
Areas to Include in Your Sponsorship Policy
Your policy should align with the types of sponsorships you offer including a list of the assets you offer in your sponsorship inventory. A strong policy would include:
- Definition of acceptable sponsors: A particularly important element of your policy is to include the qualities acceptable for sponsorship. For example, you wouldn’t want to align yourself with a company or organization that goes against your town’s basic values and beliefs or work with a tobacco company to name a kid’s playground.
- Execution and activation: Each asset should have a clearly defined policy on how you will handle execution and activation of the asset to ensure everyone is following the same steps and rules.
- Roles and responsibilities: A list of roles and responsibilities should be included for each task under the execution and activation policies, so everyone understands not only what they are responsible for but where their authority ends.
- Define the different types of revenue: What town assets are acceptable to use for revenue generation such as what properties are available for naming rights? Where can companies advertise?
- Approval of sponsorships: In the case of less standard sponsorship opportunities who will be involved in the approval process? How will the ideas be presented, where and to whom? What is the role of the city council in sponsorship decisions? How many council members must be present?
- Legal implications: Ensure your policy does not infringe on residents’ rights or that sponsorship opportunities can be construed as breaking any laws.
- Funding allotment: Clearly define where funding will be allotted and where it cannot be used such as towards public servant salaries, or sponsorships that could provide personal gain to council members, the mayor, etc.
- Third-party sponsorship: Make it clear whether third parties can be involved in sponsorships and if so, define how those parties must function including roles and responsibilities.
Basically, your sponsorship policy protects city councillors from being accused of either knowingly or unknowingly being involved in any wrongdoing while ensuring public safety.
Prospecting for Sponsors
Finding the right sponsors doesn’t have to be rocket science. If you successfully define your audience segments and the assets that provide access to those segments, you can also successfully identify prospects that will respond to those audiences. The more detail you have on the segments, the more enticing your sponsorship opportunities become. You can also consider what type of sponsors might work better: a local sponsor or a national sponsor. For example, if you want to add more park benches to the local waterfront, you might consider approaching local businesses or even well off individuals to donate the benches in exchange for a little plaque with their message and name.
If you want to build a new gazebo at the park, this requires more funding, so you might look at larger businesses to fund the design, building and maintenance of the gazebo. However, if you have a major event that can attract hundreds of thousands to the town (or millions to a city), you might be in a better position to attract major corporate sponsors and brands. Some questions to get your ideas flowing include:
- What brands resonate with your general population?
- What brands sponsor similar events to those your town holds?
- What companies in town make sense as sponsors?
- Who do you have in your personal and professional networks that might make a good prospect?
- Who are the major players on council who might have some good connections (be sure this doesn’t interfere with your policies)?
- Are current event sponsors a good fit for other sponsorship opportunities in town?
- Are there samples, prizes or giveaways that would align with community events?
Once you have a good list, you can begin planning your outreach strategy.
Outreach and Follow Up Techniques
With all your ducks in line, you are now ready to begin reaching out to your prospects. We recommend the following process to increase success:
Find the right contact for each prospect so you can send out your emails. This step is not focused on selling packages, but instead qualifying leads. Your email should let them know you have a project you are working on that could benefit from their input and suggest a time for a call. You can then take the time with them to find out if they make a good fit and if so, arrange for a discovery meeting. Emails from a city or town rep tend to be less threatening than from an event rep as it is less clear you are trying to sell them something!
Discovery is where you really qualify your leads. This isn’t the time to present your proposal. Instead it’s a discussion to find out about a prospect’s marketing goals. From there you can prepare a customized proposal that shows them how you can help them meet those goals. Asking questions, listening and looking for connections to your assets will build a foundation for your relationship. You can create a highly focused proposal that shows them why sponsorship is the solution for their marketing challenges.
Your proposal includes the following:
- Title Page/Letter with your logo, event name and tagline, without using the word sponsorship or proposal.
- Audience Overview
- The opportunity you are offering and why it suits their needs.
- Menu of opportunities based on the goals they’ll help them achieve and the assets available under each opportunity.
- Sample activations to demonstrate how they can reach their goals with each activation directly tied to their specific pain points.
- Contact page with a clear call to action and an invitation to share their insights about the proposal.
An effective proposal should encourage further discussion that leads to an agreement for sponsorship.
Follow up Often
Since the prospect requested the proposal you have a relationship established. You should give them a few days to review the information you sent and then reach out to see how they feel. However, you can also look for other reasons to connect. Perhaps you found an article that you think they might be interested in.
Maybe you learned something interesting about your event that is new and might increase participation opportunities. You might even connect with a new sponsor that will make you seem more attractive. The key is to keep the conversation alive and your offer interesting, so they are more inclined to become a sponsor.
Measuring ROI and Fulfillment Reports
Everything you offer sponsors should have some form of measurement you can use to prove ROI. This information is important to sponsors as well as to the success of your sponsorship program. If you can’t prove how well your sponsorship opportunities work, then you won’t be able to attract renewals and new sponsors to participate.
Preparing a fulfillment report will provide proof your activations were executed. Sponsors want to know you delivered the results promised, or better yet that you exceeded their expectations. Each asset you sell will have different levels of success, but that’s okay.
Your report will allow sponsors to examine their successes and come up with better execution next time. Showing the number of attendees at an event, the number of impressions of an ad, the number of shares or likes for related social media posts, and web page visits are all proof of success.
A good fulfillment report will include:
- Charts showing each asset and its results
- Images for proof of asset delivery
- Stats on event attendees
- Impressions or participation numbers for social media data, web traffic, and other engagement metrics
- Examples of what your team did to ensure success
- ROI calculation
- Positive feedback from residents and attendees
- Media coverage clippings and links
If possible present the report in person so you can discuss the successes and how they can continue to act as sponsors. Show them how you helped them meet their goals, and come up with recommendations that will increase the value of your sponsorship opportunities. When you can show them what you did well, you are more likely to see renewals and multi-year agreements to support your town.
There isn’t a single town or city that doesn’t offer opportunities to potential sponsors. Knowing the value you bring to the table will allow you to create an inventory of assets ready to attract sponsorship dollars to your community.
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.