Before you dive in, if you are looking to determine the value of your sponsors , check out these titles in our “sponsorship valuation” series:
Sponsorship ROI Metrics: Approaches to Measurement and Evaluation
Tangible vs. Intangible Sponsorship Benefits Defined
Seven Sponsorship Valuation Questions: Part One
Seven Sponsorship Valuation Questions: Part Two
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.
In today’s guide, I want to explain the ins and outs of sponsorship valuation. Then I want to share some real case studies that should put into perspective the importance of valuations in your sponsorship program.
Finally, I’ll provide some pointers for gathering and valuing assets so you can navigate this difficult area of sponsorship!
Sponsorship Valuation 101: Understanding What You’re Selling
The case studies I have here for you today will have more of an impact once you understand what I’m talking about when I say sponsorship valuation.
Valuation is the process of determining the value of your assets. Now, that definition likely begs another question: what’s an asset? Allow me to explain, then I’ll delve into valuation further.
An asset is a tangible or intangible thing that you’re selling to the sponsor. I know “thing” is a very general word, and I’m only using it because assets can truly be almost anything. They’re not purely objects or items, so using those words wouldn’t be appropriate.
For example, event or building naming rights are valuable assets. Speaking opportunities are assets that come up a lot in my client’s respective sponsorship programs.
Those are two examples and just the tip of the iceberg. From fan appreciation days to VIP-exclusive events, tournaments, races or marathons, galas, venue usage, paid media, social media, webpages, newsletters, and product giveaways, assets truly run the gamut.
Before you can value anything, you need to determine which assets you’ll present to the sponsor.
At first, it’s okay to use a loosey-goosey process. You can sit with your team and brainstorm as many assets as you can come up with for your event or sponsorship opportunity. Most of these assets won’t make it to the sponsor anyway.
During this brainstorming session, I strongly implore you to think beyond logos. Many first-time sponsorship seekers think logos are the greatest thing since sliced bread, but they’re very much not.
Sponsors have seen logos a bazillion times. They can be included in your sponsorship package (where you neatly present all your assets and their accompanying prices), but not prominently.
Instead, when determining which assets you might sell to the sponsor, I want you to think about everything you know about the sponsor to this point.
What did you learn about them through your research? (Yes, you must research your sponsorship prospects to confirm there’s some alignment between their audience and yours). If you’ve spoken with the sponsor, have they mentioned any pain points or issues? Maybe areas they’re interested in?
This information can all inform your asset choices.
The brainstorming session has come to an end. Maybe you have 50 assets, maybe you have 250. The more assets, the better at this phase, as many won’t make it past the next part of the process.
It’s now time to valuate your assets.
As I said earlier, valuing assets simply means assigning a value to them. But how in the world do you do that?
I’ve discussed it on the blog before, but it seems like a great time for a recap.
I most recommend using market research to value your assets. Let’s say one of the assets you want to offer the sponsor is 10 promotional social media posts. How much would a marketing firm charge to produce 10 social media posts?
Once you have a price, keep going. What would you pay an event company for an interactive expo booth? How much are companies willing to pay to get a building or a library wing named after them?
You will have to dig deep to find this kind of information, but that’s part of the valuation process.
Once you find the market price, use it as your guide. If the price seems a bit high to you, don’t be afraid to knock down your pricing a bit.
Just make sure you’re careful if you go in the opposite direction. You might discover that an asset is low-value, but you think your version of that asset could be more valuable. You thus increase its price.
If you can back up your assertion that the asset is valuable, then the sponsor might be willing to pay the price you’re asking for. You have to be very convincing though.
Further Refining Assets
In most instances, when you come across a low-value asset, the best thing to do is discard it. If you don’t want to do that, then at least set it aside for now. You want to offer the sponsor primarily high-value assets, after all.
I want to make it clear that the sponsor ultimately determines which assets are high-value. They might be willing to pay more for some assets than what the market value suggested because they think that asset can really help with one of their issues.
Just as easily, a sponsor can turn around and say that one of your higher-priced assets should be valued lower.
You can fight for assets, especially those you really think would benefit the sponsor, but know which hills to die on and which to let go of.
The sponsor knows their pain points best. Thus, they can review a list of assets and easily pick out which they know for certain would improve their situation.
Since you’re not in their shoes, you can’t do that as well as them. Let the sponsor customize your sponsorship package with you. That will make it the best it can be.
My Top Sponsorship Valuation Best Practices
To wrap up, I want to share my best practices for sponsorship valuation. These tips, when taken in conjunction with the rest of the material in this post, can set you on the right path to selecting assets the sponsor truly gets excited about.
Don’t Blindly Copy
As you dig deep into the corners of the Internet to determine the value of your assets, you might come across sponsorship packages of other companies floating around online.
Some companies (wrongly) assume that if you upload your sponsorship package to the ‘net that sponsors will bang the door down.
Finding a fully assembled sponsorship package like this can feel like hitting paydirt, especially if the company that published the package is in your industry or niche. You can just take some of their asset ideas and the pricing and you’ll be all set, right?
Sure! You’ll have assets, that’s true. You’ll also have prices for those assets.
Are those prices correct, though? Hmm. You’re not so sure.
Have you ever copied off someone when taking a hard test? Most people have at least once or twice. You know as well as I do that everyone always wants to copy off the smart kid.
Why? Because they know the smart kid usually has the right answers. By copying off the kid next to you, you’ll get answers, but they might not be the right ones.
That same premise applies to copying a random sponsorship package you find online. You don’t know if the company that posted it is the smart kid or the one who’s struggling to get the answers just like you.
If you want to use the sponsorship package you found as another piece of market research that inspires your prices, that’s fine. But to straight-up copy? It’s too risky.
Document Your Methods
Here’s another asset valuation best practice that often goes overlooked. When categorizing and pricing your assets, it helps to document everything.
What kind of asset properties did you put together? What type of market research did you use? What process did you rely on for adjusting pricing?
Write down every step.
When you meet with your sponsorship prospect, they always like to know where the numbers came from. Plus, by documenting your processes, valuing assets for your next sponsorship opportunity won’t be so difficult.
Do Your Audience Research
This goes back to what I mentioned in the case studies. Your audience is critically important in sponsorship. They are your most valuable asset, as they’re what your sponsor should want most.
Your audience can even influence the value of your current asset properties. Yes, seriously! If your brand has a lot of sway over your audience, then your asset value could theoretically go up.
You have to be willing to put in the work though, deeply segmenting your audience and then niching them down some more.
Plus, you have to survey your audience at least once or twice per year to ensure your audience data accommodates the current needs, interests, and pain points of your paying customers or attendees.
With all the great information in this post, you should be readier than ever to begin identifying and valuing your assets.
Although this continually proves to be the hardest area of sponsorship for many of my clients, navigating assets and valuations will come together more smoothly with audience research and sponsor involvement. Good luck!
- About the Author
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Chris Baylis is the Founder and Editor-in-Chief of The Sponsorship Collective.
After spending several years in the field as a sponsorship professional and consultant, Chris now spends his time working with clients to help them understand their audiences, build activations that sponsors want, apply market values to their assets and build strategies that drive sales.
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