Sponsorship is so popular with sports clubs and sporting individuals because it allows them to earn money from an asset that they have already.
For example, a sport club already has their first team kit – and earning money via a company sponsoring that, is an extremely cost-effective way to top up their coffers.
Clubs can earn money from sponsorship from something that they already have, and that is an extremely attractive thing.
Other organisations, such as theatres or media outlets, offer up rights to sponsorship for things like their weather program or being included in the notes of a program production.
However, having a plan for the sponsoring of your assets is vital. Make sure that you consistently place markers down and measure your performance and the success that you have gained in having a sponsorship deal. This is important, as there is little point in putting in all the effort to secure one, if you do not know the level of success your relationship has brought you.
Keep a funding goal as well, and within this, create short-term and long-term targets for the amount of money you have received, and the amount you’re scheduled to receive. If you know what level of income sponsorship is going to provide, you are less likely to be taken by surprise by a poor bank balance. Once you have your goals in place, you will then be able to set about achieving those goals and with a bit of luck, and a lot of determination, you will turn that poor bank balance into a positive one!
You also need to make sure that your plans and ideas are specific, measurable, and achievable. Do not get excited and aim too high in terms of income, keep your goals down to a level that you can expect to hit. Long-term thinking can also come into the equation here, as a good plan will allow for year on year growth that short-term vision might not be able to achieve.
The power is in your hands
As a club, in the sponsorship world you’re often known as a ‘rights holder’; someone who owns the legal rights to something – for example, you might own the legal right to the name of your stadium, or the right to put whatever logo you want on the front of your newsletter. These can all be sponsored out, and the beauty of owning the right to something is that you can choose whoever you want to work with. This means that you have a duty to use that power for the good of your organisation, and you have to make decisions that will lead to the maximum amount of revenue being collected from your assets.
Making the most of your assets is part of the solution to bring in as much money as possible, and this can include things that you might never have considered. For example, everyone thinks about sponsoring a sports team’s on-field clothing – but what about their off-field gear as well? The training kit and tracksuits that are worn by the squad during their warm-up drills, as well as after the game mingling, can provide great exposure for a brand.
Something like this often works very well in the world of professional football – but it can be adapted to any sport. For example, in 2011 Manchester United signed a huge package worth £10m a year with DHL that saw them sponsor their training gear. Incredibly, that fee was 50% of the main sponsorship deal with Aon.
More realistically, consider running a few tests, and doing some market research of the clubs around you to see what level of sponsorship could be commanded for brand placement of training and leisure clothing. Even if you do not have a training kit, bringing one in with the costs covered by a sponsorship deal could be an effective strategy for the club.
Off-field clothing can also be bought and worn by non-playing members and general support – just like replica playing shirts are bought by fans of professional football teams.
Don’t forget, you also have the power to offer exclusive access to your brand. Sponsors will often be happy to pay more to be the only business that has their logo emblazoned across your assets – think about offering that to a favoured sponsor. (Maybe less focus on large level sponsors and focus on local.)
Sponsorship as a tool for growth
For many clubs and organisations, the money that sponsorships bring in is a key part of a plan for growth. A lot of the time, especially for those operating on a smaller scale, it can be the difference between standing still and growing.
The financial benefits can include things like getting the money for * new buildings, to repair existing buildings, or bring in new members to the organisation (extra cash to pay for better players, meaning that the team can improve/play in a better league/increase revenue through this continuous cycle). This could even include the salary of a marketing specialist, who would then seek out bigger and better sponsorship chances for the organisation – creating a virtuous circle in which everyone wins.
The increased exposure that signing a good sponsorship agreement provides could lift your profile in the industry that you’re in – with the help of a larger business, who know what they are doing in regards to marketing, you could improve your clout in your field and, effectively, be paid for it.
Attracting a sponsor
Deciding that you are going to try and get a sponsor is all well and good, but you need to possess the right tools if you’re going to attract one to your organisation.
Taking the time to find the right sponsor is key to having a profitable relationship, and in a competitive environment, doing plenty of research is the best way to find the right partner.
One of the best ways to find out which businesses are inclined to sponsor someone in your field is to look at your rivals and take a close look at the people who sponsor them. Find out that company's expertise, and how much money they make per year. There is no point approaching someone who does not have the budget to sponsor multiple organisations.
Look to see if the people that the business tries to sell its product to would be interested in what your club or organisation has to offer. There is no point pitching to a sponsor who makes things that the audience they would reach cannot afford – it offers little potential for return on investment, and as such your proposal probably won’t see the light of day. In short, make sure that your key demographics match up to form a positive relationship.
Make sure that all your communication is targeted at the right person as well – there is nothing more frustrating than doing a lot of research, finding the best businesses to contact, only for your introductory email to sit in some admin inbox for weeks and never get read. Ultimately, it all boils down to research, and when you approach a company you need to make sure everything is watertight so that you can put your best foot forward and win that sponsorship.
You should also make sure that each proposal is tailored personally to each business. They are the ones who are going to be putting some money into your organisation, so taking the time to draft a unique proposal is just courteous.
One area of research that often is not undertaken, is having a look at yourself as an organisation. Make sure you research your own stakeholders to find out what hidden value you can find in your following that can be used to your advantage. You might be in the lucky position of having a sales director of a company among your following – that could be utilised to find additional sponsorship.
How to succeed with sponsorship
Rights holders must work even harder to stop treating sponsors like a cash cow that is just there to hand out money. They are not. If they were, it would be called charity, not sponsorship.
One way to do this is to create flexible models that can create a long-term social and commercial value for both parties. The current media landscape and tough economic times are driving more and more brands to demand more from their sponsorship.
“Marketers are beginning to understand that sponsorship is a tool for which brand exposure is an outcome rather than it being the reason to sign a multi-million deal. Rights holders, however, are yet to reach the same conclusion,” said Gordon Lott, former 2012 Olympic marketer for Lloyds TSB.
He continued: “There is a big onus on rights holders to think harder about what channels and activities will genuinely enable brands to connect with fans. If [sponsorships] provide consumer value, then it generally provides overall social value. It may not have a tangible media value but it will have the greatest impact.”
There are a lot of sponsorships that work and can be classed as a success for both rights holders and sponsors. For example, Red Bull have had great success with the sponsorships that they do across sports such as football and Formula 1, but also with extreme sports like cliff diving.
Their success stems from the fact that Red Bull embeds themselves deeply in the sport that they sponsor. For example, they have a number of deals in football that include naming rights. Red Bull Salzburg, who play in the Austrian League, and the New York Red Bulls are prime examples of this. In both cases, their brand is embedded along with the rights holders – creating a great partnership. Of course, they have a whole Formula 1 team named after them, and they are not afraid to invest in order to achieve success.
Another example of Red Bull is their sponsorship of cliff diving – where they host events in locations such as Havana, Thailand, and Portugal. This partnership gives them exposure in many different countries around the globe, as well as providing some of Red Bull’s marketing muscle for the sport. It’s a win-win for both sides, and so is their partnership with other extreme sports such as air racing and BMXing.
Creating a great sponsorship package is going to attract firms to your organisation. Anyone building any package will have to start by taking a look at what assets they have.
Is there a lot of space for branding, maybe a company can sponsor an event or match? Does what you have to offer and what the sponsor wants fit well together? These are all questions that need to be asked.
Why sponsorships fail and how to avoid it
Of course, not all sponsorships work out. Even at the highest level, companies make poor decisions. One great example of this is when Samsung signed a five-year contract with English Premier League club Chelsea. This was spurred on by their ambition to move beyond a traditional sponsorship strategy – but it was hampered by a lack of flexibility and the lack of shared values between Chelsea and Samsung.
These restrictions forced a restructuring. Samsung developed a two-tier model where it uses the tie-up with the Premier League club to promote its premium qualities and focuses its CSR work through deals with lower-league clubs such as Swindon and Leyton Orient.
“In the beginning, Samsung’s deal with Chelsea FC was a wallpaper exercise which they were only interested in using for the high-profile media coverage.” Said Carolyn Anderson, former Chelsea marketing manager.
“This objective changed over time but they did not have the assets built into their deals to allow them to push their social conscience in a relevant way and resonate with the younger generation.”
Make sure that you always think six-months ahead. If your agreement ends in six months, then you should start negotiations to renew it with the sponsor. There is nothing worse than one agreement ending and leaving you without that source of income while negotiations carry on.
In conclusion, in order to get sponsorship right it doesn’t require a massive amount of work. Once you have a deal in place, working with your sponsor, treating them as an equal partner instead of a cash cow and thinking about the end of the agreement can really pay dividends.
Before a sponsorship deal has been signed, putting a few hours in to carry out specific research into the sort of companies that sponsor your organisation is vital – and will pay off in the long run when you can specifically target businesses, and the correct people inside those businesses, with your proposals.
Remember, you have the power – they are your rights at the end of the day, and if you want to offer exclusive rights to someone, make sure that you receive the full fee. If you are in a strong position, use it – but never overdo the situation and make them feel like you’re taking advantage.