What 2016 Taught the Sales Side of the Sponsorship Industry

(Athletics Canada, 2016)

Bill Cooper
, Managing Director & Chief Operating Partner

From the vantage point of sponsorship properties, 2016 was a year of accelerated evolution. And while all of us in the game are madly trying to arrive at each milestone of change before the others with our breath caught such that we can calmly pretend to have predicted it all along, the frank reality is that we are all rushing to keep up.

This is a particularly painful reality for smaller properties that do not enjoy enough human resource wealth to afford them the time to invest in learning, developing and evolving in the sponsorship arena. Rather, they are invariably stretched across a multitude of responsibilities and attempting to harness the potential of sponsorship off the corner of a cluttered and highly multi-tasked desk.

In view of that challenge I wanted to jot down a few observations gleaned from the past year that should be key for small properties to keep in mind as they embark on harnessing their commercial rights through sponsorship in 2017.

It’s hard to look back on a 12-month cycle and isolate changes unique to that period, but to the extent we can hold up 2016 as a barometer of sponsorship change, the following areas of evolution stand out as the most pertinent for our industry as we step into 2017:

Tailored to suit, measured to boot
Firstly, the trend we’ve been seeing for the past few years continues: buyers are coming to the market with tailored and unique objectives and at the end of the cycle they are going to want some actualized evidence that their objectives have been met. So, how do we evolve to rise to this challenge?

  • Don’t go to market with a fully prescribed approach. Stay flexible and nimble enough such that you can adjust to a prospect’s preferences. But at the same time, don’t be so bespoke that you are mistaken for vague – if that sounds like a tough balance to strike it is!
  • Think beyond the traditions of associative rights, exposure opportunities and hospitality assets through to the potential for specialty content, licensing rights and royalty-based sales arrangements, as examples. This kind of expanded breadth of offering will mean you are more fully harnessing your commercial rights.
  • And find a way to measure. No matter how tight your resources are, your partner needs and deserves a reliable summary of how their tailored objectives were delivered upon.

Finding your voice in a world of amplifiers
Secondly, the continuing rise of social and digital is further evidence that activation success relies on an ability to harness the ever-growing array of media platforms consumers prove to be enamored of.

  • It is not enough to simply have a good story. For there to be value to a partner you must tell it.
  • It is not enough to simply tell a good story. For there to be value to a partner you must tell it to an engaged audience.
  • It is not enough to convey your story to your loyal audience. For there to be value to a partner you should be looking to expand your traditional audience through the shareability of your content and its amplification across populist platforms.

Validation of tradition
Thirdly, there was evidence through another Olympic year that, trends and industry evolution aside, story-telling and activation around major sponsorship properties still enables a brand to cut through. In fact, with the eternally expanding plethora of media distractions available to consumers one could argue that such strategy is now more required than ever.

  • If leveraged effectively, sponsorship can provide brands with a pathway to uniquely strong consumer engagement levels as the sponsorship properties incite consumer passion, loyalty and ritual like no other form of marketing can. From there, the brand and the property can explore a wide array of advertising platforms and tools as tactics to harness those uniquely valuable consumer engagement levels.
  • What makes sponsorship unique in the world of marketing and advertising is that it can deliver a storyline that engages consumers, thereby opening a doorway for brands to activate through. The Olympic Games are a tremendous example of how a sponsorship property can positively engage consumers across regions and demographics.
  • While this may be true on a different scale for properties smaller than the Olympic Games, this value proposition should not be underestimated because it still crystalizes the role sponsorship can play in a brand’s marketing mix.

Caution, complexity and the need for patience
Fourth, I would emphasize the caution shown by the market throughout 2016. Sales cycles remained exceptionally long and negotiating dynamics grew in complexity. The demands on partnership regularly broke new ground and correspondingly eschewed the convenience and efficiency of precedent as a template to cut and paste from.

  • While sponsorship as a marketing strategy continues to prove its value and on aggregate is showing growth, it should be concurrently recognized that competition in the sector also continues to expand.
  • This reality means that sponsorship is likely more a buyer’s market now than it has ever been, and as a result properties should set their expectations around longer sales cycles and conservatively sized transactions. For a small property that has a volunteer Board of Directors eagerly awaiting updates on sponsorship efforts, setting appropriate expectations can be profoundly important.
  • Brands generally want to be given the time to consider the opportunity fully and to be able to kick the tires. We all know what it feels like when a car salesperson tries to rush you on a sale whereas the one who takes you on a longer test drive, gives you time and space to consider and reads you well enough to throw in the options most attractive to you in most cases wins the business. Sponsorship transactions are not tremendously different.

Five-figure charm and six-figure harm
Finally, it is a lot more efficient to get to your budget goal when you add revenues in six or seven figure increments. As a result, many sponsorship properties go to market with six figure aspirations. That is understandable and in terms of value proposition, in many cases, merited. But if six figure aspirations are myopically pursued in a pitch environment limited by five figure interest levels, a significant chill can be put on any potential there might be for a partnership.

  • Get to know your prospect and understand the ballpark you are playing in from an investment threshold standpoint. Effective negotiation and exceptional opportunity might ultimately enable you to hit one out of the park, but a successful sales cycle relies on you knowing the opening boundaries nonetheless.
  • Don’t underestimate smaller rights fee deals. These can feature a shorter sales cycle thereby protecting your sales resources, potentially enabling more transactions and they can sometimes be twinned with alternate revenue streams (i.e.: licensing fees, royalty sales, incremental hospitality buys, etc.). This style of approach is more and more suited to the cautious marketplace we find ourselves in.
  • Have a partnership architecture so that your varying levels of partnership are coherent and there is integrity to your pricing. But don’t adhere so strictly to it such that you are demanding the market play by your arbitrary rules. Rather, have some built-in pricing elasticity such that your architecture and your varying investment thresholds are reflective of the market feedback you have been receiving through the sales process.

As a sponsorship property, you have a set of commercial rights that can represent significant marketing value to prospective sponsors.

If we were listening in 2016, we were emphatically reminded that our job as sponsorship sales people is to ensure we:

  • have a firm grasp on the prospect’s unique objectives,
  • have a plan in place to measure delivery against those objectives,
  • effectively leverage our property’s unique story/content,
  • harness media channels that access a broad base of engaged consumers,
  • prepare ourselves and our stakeholders for substantial and complex sales cycles,
  • price our property right, understand the investment tolerances of the prospect across the table, and
  • come to the table with an expanded view of the various ways our property’s commercial rights can be harnessed in a manner to tangibly advance business objectives.

I know this non-exhaustive summary may sound like a tough slog and indeed; it should. Because true partnerships are built on the fruit of hard work and solid foundations. But if it sounds unduly complex, then blame it on the messenger (me), because ultimately sponsorship transactions are scrutinized by buyer preferences not dissimilar to those we apply to the consumer transactions we engage in every day. So perhaps your most important litmus test is an objective look in the mirror – if you were in the shoes of the prospect would you like what you are being pitched?