Sponsorship ROI Metrics: Approaches to Measurement and Evaluation
Before you dive in, if you are looking to determine the value of your sponsors , check out these titles in our “sponsorship valuation” series:
Tangible vs. Intangible Sponsorship Benefits Defined
Seven Sponsorship Valuation Questions: Part One
Seven Sponsorship Valuation Questions: Part Two
Sponsorship Valuation Best Practices
Essential Guide to Sponsorship Valuation
If you’ve only skimmed through the information in this guide (which, you really should take the time to read everything), then spend some time with this section at least. It’s a recap of all the steps needed to complete your sponsorship valuation.
It’s always important to remember that in sponsorships, it’s not solely about what the sponsor can give you, but what you can give them as well. You should strive for a mutually beneficial partnership, as this will keep your sponsor eager to work with you for longer than a relationship in which all you do is take. When evaluating the success of your partnership or event, which ROI metrics are most important?
The following 10 sponsorship ROI metrics will clue you in on how fruitful a sponsorship opportunity is:
- New customers
- Social media followers
- Website traffic
- Event attendees
- Product sales/donations
- Net promoter score
- Customer feedback
- Email open rates
- Email click-through rates
Keep reading to learn more about these 10 measurable metrics, including how to calculate some of the more complicated KPIs. You’ll soon have the deepest insights into your sponsorship so you can both gauge whether the relationship has been worth your while. Tracking these metrics can also help when creating a sponsorship package for your next sponsor.
10 Sponsorship ROI Metrics to Determine the Success of Your Partnership
Valuation is one of the integral steps of finding sponsorship, whether that’s for a festival or podcast sponsorship or for event sponsorship. It’s also a follow-up to creating a list of assets. This step, which is referred to as inventorying or inventory building, involves you generating an exhaustive list of any and every asset you believe will be valuable to your sponsor.
These can be tangible things, such as access to an event space, or intangible things, like website traffic or an audience segment that was previously inaccessible to the sponsor. You can use an Excel spreadsheet, a whiteboard, or even good, old-fashioned pencil and paper to create your assets list, but make sure it’s as complete as possible.
Some areas you can focus on for the assets list are as follows: traditional vs. paid media, newsletters, pass-through benefits, speaking opportunities, social media, exhibiting opportunities, signage, and program naming rights.
When your list of assets is as comprehensive as you can possibly make it, you can then do valuations. This is where you determine the value of each of your assets so you can choose the ones you’ll present in your sponsorship package. How valuable an asset is will depend on your audience, your geography, and the type of asset you have to present. Your sponsor’s opinion on the asset is also crucially important.
Once the sponsor accepts your proposal and the event goes on as promised, they will go back and look at the valuations. They want to see if you delivered everything you promised you would. That makes valuations one of the top key performance indicators or KPIs you can offer through sponsorship.
The second sponsorship ROI metric is another of the bigger ones: new customers! As you go through the steps to secure your sponsor, audience research is undoubtedly going to come into it. You need to dig deep into your audience and gain a clear understanding of who they are, where they are, what their lives are like, and what their interests are.
Sponsorship surveys are one such way to gather this information if you don’t already have it. We talked about sponsorship surveys in our article about sponsorship for festivals (link above). You use these surveys to learn useful geographic and demographic information about your sponsors.
Examples of what you might include in a sponsorship survey are requests for a customer’s name, location, age, gender, job title, pretax income, education, and the number of children. This information makes it easy to divide your audience into segments, or smaller groups that are split by their interests or pain points.
When you know your audience, you can then use them as an asset to secure sponsorship. You can also choose the sponsorship opportunities that most align with your audience, ensuring that your customer base grows.
To determine if you have new customers, all you need is a running tally on your customers before the sponsorship and then after the event or sponsorship opportunity ends.
Social Media Followers
Every organization and company–from the small businesses to the Fortune 500s–is expected to have a digital presence. Growing your social media gives you a wider audience in which to reach out to. This audience can then attend your future events or at least donate to your organization.
To put your organization in the best position for social media growth through your sponsor, you want to have an active presence on all the big social platforms. Promote your event frequently, but not to the point where it’s going to annoy your audience.
Before or even during the event, you can use physical or digital activations to pave the way for social media growth. Here’s a great post on our blog about digital activations. Some ideas you can utilize include quizzes, contests, and branded content.
These activation opportunities are as beneficial for you as they are for your audience. You get their engagement, shares, brand awareness, and possibly new sales and followers. Your audience could win a prize or at least kill a few minutes with an interesting quiz.
Between posting more content, using digital activation, and hosting a smashing event with your sponsor’s backing, expect an uptick in social media followers. This will certainly happen on your side, and it could happen on the sponsor’s side as well.
You don’t just want to lure your growing audience to your social media profiles, but your website as well. If you place links strategically, then a customer can seamlessly travel from your social media to your website and back again.
You already know the kind of website traffic you’re driving every month. It may be a decent amount, but nothing spectacular. Partnering with a sponsor will undoubtedly change that, as their brand clout will bleed over to yours. Even ahead of your event, once your sponsor’s audience learns of the partnership, they’re going to get curious about you and check out your website.
Post-event, you’ll likely see the biggest spike in traffic. Your sponsor’s web traffic could spike as well as some of your event attendees who were unfamiliar with the sponsor do their own due diligence.
Increases in traffic are certainly nice, but alone, they aren’t very valuable. Once the hype from the event wears off, you have to anticipate that your traffic will slide down to more regular levels.
That’s why, when you have so many visitors on your site, you want to do your best to convert them. Whether that’s through a well-placed website pop-up, a blog post opt-in form, or an offer for something free from you to tantalize them, you must have a plan in place for capturing these site visitors. Otherwise, your numbers are only temporarily inflated and that’s it.
All the metrics we’re discussing today are significant, but event attendees is another of those bigger ones. When your sponsor agreed to work with you, both they and you anticipated a certain number of attendees to come to your event.
Having what looks like a packed room is a great confidence booster, but until you can get an accurate headcount, hold off on getting too excited.
You have a handful of methods you can rely on for gauging attendance. You’ll probably have to combine several of these for the most complete headcount among attendees. Here are your options:
- USB card reader swiping: If attendees use any sort of card for entry or over the course of the event, such as a credit card or identification card, then a portable USB card reader attached to a computer or smartphone can gauge attendance. The problem with this method is that if card usage was only optional, then you don’t get a full picture of who went to the event.
- Ticket access: You decided to mail each of your attendees physical tickets to the event. You’ll need ticket handlers to tear off the perforated edge of every ticket. It’s ideal if you use some other means of keeping track of headcount too, as tracking every ticketholder can be tough, especially if the entry is packed.
- Mobile check-ins: If you kept everything digital to save money on printing physical tickets, then your attendees may have a QR code or access code via email that lets them check in on a mobile device like a smartphone. If this is the only way attendees can get into the building, then it should give you an accurate gauge of attendance. Make sure the mobile check-in doesn’t allow for scan upon re-entry, as that can skew the numbers.
- Badge scanning: Instead of physical tickets, you can also send attendees badges for the event. To get into the building, they’d need to be scanned in. Like mobile check-ins, this is one of the best ways to paint the complete picture of attendance.
Underperforming on attendance does happen. Perhaps you failed to promote your event adequately, or the location was inconvenient for most of your audience, so they decided to skip. If your event wasn’t as successful as possible, you might want to sit down on your own or with your sponsor to gauge what went wrong. Some sponsors might pull out of the deal if the event didn’t live up to expectations, but others may be willing to give you a second try.
Even if you lose this sponsor, knowing what you did wrong is a great learning experience. The next time you host an event, you’ll prioritize areas like promotions or location so you can double, maybe even triple your last attendance numbers.
Product Sales/Donations Increase
You’ll study a lot of metrics to satisfy your sponsor, but you need to know that the partnership is benefitting you too. In that regard, you want to look at how your own bottom line has increased since you’ve started working with the sponsor.
We’d recommend reviewing product sales or donations before, during, and after the sponsorship. Did associating with the sponsor automatically drive up revenue? By how much? Did it take the event for more people to give? How long did you continue to see a product sales or donation increase after the event?
Like with new website visitors, if you want to keep this upward momentum going, you have to be proactive. If you sell products or services as a business, then you might look to cross-sell or upsell the customer. Cross-selling is offering the customer a related product to one they already bought. Upselling is an upgrade opportunity that lets you make more money through an initial purchase by suggesting add-ons or accessories for the original purchase.
If you’re an organization that receives only donations, then you want to send a heartfelt thank-you email and keep the lines of communication going through email newsletters and follow-ups. With time, you might request a second donation, but don’t do this right after receiving your first. Wait at least a few weeks, perhaps even a few months before soliciting for more donations.
Net Promoter Score
Happy, satisfied customers are those who are likely to stick with your business or organization for quite some time. They also most the ready to open their purse strings. To get a feel for the satisfaction of your customers, you can look at your net promoter score or NPS.
The NPS survey is quick, easy to fill out, and delivers big results. You may have received an NPS survey once or twice yourself as a consumer. It asks for your satisfaction on a scale of 0 to 10.
While your organization may get a few perfect 10s, if your score is anything under that, how do you make sense of your net promoter score?
Any score between 0 and 6 is not ideal. These customers are considered detractors. They have low satisfaction, little loyalty, and they could be damaging to your brand if they stick around. You’d need to put a lot of work into these customers to ensure they feel more satisfied in what you do.
A score between 7 and 8 is okay. These customers are passives. They don’t hate what you’re doing outright, but they’re not dazzled, either. If another competitor came out with an offer similar to yours, these customers would probably jump ship in a heartbeat. It’s easier to convert them to your side than it is the detractors, but you’re still looking at a pretty significant effort ahead.
Only those who give you a 9 to 10 score are promoters. These are the happiest, most satisfied customers. They have a very good chance of buying from you or donating to you again, and even better, they may promote you of their own accord because they like you that much.
Having a net promoter score is great, but it’s not necessarily the most useful gauge on customer satisfaction. After all, if your customers aren’t the marketing types, then they won’t know the difference between detractors, passives, and promoters. They might give you a 7 thinking that score is good, when really it isn’t.
Plus, sometimes you just want to read written feedback rather than receive a deluge of numbers in the mail. In that case, you should ask for customer feedback. You can issue a survey with multiple-choice responses or leave it open-ended. You can also send your audience an email and ask them to write you back with their thoughts and feelings.
As you collect feedback, it’s easy to feel overwhelmed. You’ll get a lot of thoughts and opinions, some that you maybe weren’t expecting. To keep everything manageable, you’ve got to categorize, categorize, categorize.
First, you want to sort all the positive opinions into one pile and the negative opinions into another. Then, create subcategories based on recurrent issues. For example, if your event attendees thought the event lacked branding, then put all the branding complaints in one small pile in your negative feedback category. If attendees liked your activation opportunities, then put those responses in a small pile in your positive feedback category.
Based on the sizes of your piles (or stacks, or however you’re organizing everything), you can see which issues matter most to your customers. Whether those issues are positive or negative, you need to take them to heart.
If customers liked something you did, then try doing more of it but in a different way at your next event. For the negative feedback you’ll inevitably receive, make a list of improvements so you can put on an even better event next time.
Email Open Rates
Emails are crucial in promoting your sponsored event. That said, if only half your audience is opening the emails, that’s a problem. Luckily, you can use a KPI like email open rate to get a gauge on who’s engaging with your email correspondence the most.
To calculate your email open rate, you want to count how many people opened your emails versus how many you sent. Divide that first number by the second, but don’t include any email bounces. You should get a percentage, which tells you what your open rate is.
The average email open rate is very different depending on what industry you’re in. According to 2020 statistics from marketing resource Campaign Monitor, here are the email open rates by industry:
- Leisure, hospitality, and travel: 15.70 percent
- Retail: 13.90 percent
- Real estate, construction, and design: 19.90 percent
- Professional services: 18 percent
- Nonprofits: 25.20 percent
- Publishing, entertainment, and media: 18.10 percent
- Software, tech, and IT: 17.60 percent
- Healthcare: 19.70 percent
- Government: 30.50 percent
- Food and beverage: 13 percent
- Architecture, engineering, and design: 20.40 percent
- Education: 23.40 percent
- Consumer packaged goods: 14.50 percent
- Aerospace and automotive: 12.60 percent
- Hunting, fishing, forestry, and agriculture: 20.50 percent
- Marketing and advertising: 19.30 percent
Email Click-Through Rates
Just because your audience is opening your emails doesn’t necessarily mean they’re reading them.
The click-through rate tells you how many people clicked a link in your email. You can calculate email click-through rate by determining first how many people clicked in your email and then how many emails you sent out. Once again, divide the first number by the second to get a percentage.
Using the same stats from Campaign Monitor, here is the average click-through rate in 2020 for the above industries:
- Leisure, hospitality, and travel: 2.60 percent
- Retail: 2.10 percent
- Real estate, construction, and design: 3.60 percent
- Professional services: 1.80 percent
- Nonprofits: 2.60 percent
- Publishing, entertainment, and media: 3.10 percent
- Software, tech, and IT: 2.50 percent
- Healthcare: 2.70 percent
- Government: 4.10 percent
- Food and beverage: 1.20 percent
- Architecture, engineering, and design: 3 percent
- Education: 3 percent
- Consumer packaged goods: 1.60 percent
- Aerospace and automotive: 1.20 percent
- Hunting, fishing, forestry, and agriculture: 3.50 percent
- Marketing and advertising: 2.60 percent
As you can see, the click-through rate is normally a lot smaller than your email open rate, and that’s regardless of industry.
How successful was your sponsorship? Before you answer, make sure you let the metrics guide you. No matter which part of your working arrangement you want to analyze, there’s a KPI you can use to gauge your ROI.
We’d highly recommend going through each of the 10 metrics here and measuring them all, as they will tell your sponsor how valuable your working relationship really is, and vice-versa!
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