The Marathon of Sponsorship

It’s a fact, that certain entertainment and sports industries would not exist if it was not for sponsors. And another fact, there is big bucks in sponsorship and the equation has to balance. I am far from being a mathematician, but in order to capture and sustain a long-term sponsor, sponsorship property needs to deliver value to the sponsor with mathematical precision. Assuming that you know your market and how to create the value for sponsors.

We have all heard about mass marketing vs marketing for niches. I am here to inform you that sponsorship for masses has reached its saturation point, now it’s a time for sponsorship niches. To understand the concept of sponsorship niches, you need to have moved your organisation away from being a product centric organisation to being a customer centric organization. This means that if you have not yet created value for you customer, sponsors will not see value in sponsoring this type property. This is why I call this article ‘The Marathon of Sponsorship’.

But, before I go into this marathon I am referring to, let me define these concepts of product centric versus customer centric and mass sponsorship versus sponsorship niches.

Product Centricity is a seller’s market, where the seller has the power. If a customer wants to buy, they go to the seller and the seller dictates supply and demand and, most importantly, the price. We have seen a lot of cracks in this model. The product centric model dictates that you must sell as much product as you can while keeping operating costs as low as possible.

Customer Centricity is a buyer’s market, where the buyer has the power, usually the customer. The customer dictates when they want to buy, when, and how. The most recent ‘plug-in’ to the customer centricity model is experiential marketing, where the customer wants to co-create the product/services they want to purchase. A simple explanation for organisations of customer centricity is ‘The strategy of aligning a company’s development/delivery of its products/services to the current and future needs of a select set of customers to maximise long-term financial value to the organisation’.

There is a lot to explain with regards to the two definitions, but one should be able to get the idea of the difference. One is focused on the product and the other on the customer. And sponsorship has arrived to a point where sponsorship partnerships are no longer just for the masses. Rights holders need to know their market intimately. Let me now define mass sponsorship versus sponsorship niches.

Mass Sponsorship is traditional sponsorship that seeks to create awareness of the sponsor’s brand through associations, product placement and various types of advertisements. Although previously lucrative, this type of sponsorship is most inwardly focused to the brands and what they have to offer to the customers. In most cases the rights holder and sponsor’s objectives are not aligned to maximise this relationship. An example of this is the sponsorship of the soccer teams in the PSL in South Africa.

Sponsorship Niches is a strategy of focusing on sponsorship properties that will maximise not only the exposure of the brand, but will increase the current and future financial value of the organisation by increasing their PTP (propensity to purchase). In the sponsorship niches model, the sponsor and rights holder work together to develop integrated customer experiential products/services to increase their CLV (Customer Lifetime Value). The best example of this in South Africa is the Carling Black Label Cup, where the customer is co-creating their experience with the brand and the rights holder. The Carling Black Label Cup sponsorship is not focused on everyone, but is focused on soccer fans who are consumers of beer. And it seems like they are 13 million of them who participate, although there are duplications.

The Marathon of Sponsorship is exactly what is required to be a relevant right holder and sponsors see long-term benefits with your brand. Why is it a marathon? It is because value is not temporary, customers and sponsors alike perceive long-term relationships with products/services that add value to them. Unfortunately this exercise is mostly for rights holders, because they need to prove to the sponsors that their property can deliver current and future value to the sponsor.

To be a rights holder which focuses on the niche of sponsorship, the organisation must be able to adjust/change its organisational design, performance metrics and incentive structures in order to deliver value not only to the customer, but the sponsors. Gone are the days where the rights holder gets a big cheque deposited and they use the money solely on operational activities.

Rights holders who will attract sponsors are those who are relevant and who consider how they can deliver sustainable value to their customer and their sponsor. This means that the rights holder must be relevant, value focused and are focused on delivering sustainable value. And to ensure that the organisation is gradually moving away from mass sponsorship to being a sponsorship niche rights holder, it can apply the following techniques according to research.

1)Sell solutions not sponsorship. Before doing anything, ask yourself, How would the sponsorship of your event be meaningful to your fans/customers, your property and the sponsor’s business.
2)Highlight benefits, not features. Focus on the sponsor’s need to build their business, not your need to sell.
3)Sign your media partners first. Having media sponsors signals to sponsors that your property will be high profile and minimises their risk in signing.
4)Commit full-time. Sponsorship sales can’t be done amongst other responsibilities, it is a full-time job. If you don’t have the capacity, hire a sales sponsorship agency.
5)Put a deadline on your offers. There are only three acceptable outcomes of any call or meeting: yes, no or definite next steps. Next steps include getting the go-ahead to prepare a proposal. Or scheduling a time/date for the next discussion.
6)Researching and qualifying your potential sponsors. It is essential to know what your sponsor’s sponsorship strategy is to be able to align their needs to your customers.
7)Measure impact and engagement for future insights. The companies that measure their value to the stake holders, are the ones who get the most insights. This is a continuous process.

In the sponsorship niches model, the performance of the property is determined by the current and future value that is delivered to the customers and the sponsor. In this process of delivering value to the stake holders, the rights holder must invest in insights of their property to remain relevant and to ensure that the sponsor gets ‘fair value’ on the deal. The team must develop and refine the sponsor’s and customer’s satisfaction index to determine if they are hitting the mark.

The value of being a sponsorship niche property is the comfort of knowing that the brand is targeting and satisfying the right set of customers with relevant sponsored products and maximising the value of both. And to be this kind of property/rights holder the organisation needs to know how to brand the property more effectively and be flexible, position the brand with the right kind of sponsors and customers, and develop metrics that will allow you to have insights for the future. Since being effective in the sponsorship arena requires this kind to detail and commitment. It is safe to say that it is a never-ending marathon.

Article written by: Dumi Maseko

Dumi Maseko is CEO and founder of Enlyne Branding and the company was founded in 2007. It started working with Small Business offering a variety of marketing services. In 2009 Dumi studied more on Big Data and its benefits. And in 2010, Enlyne Branding narrowed down its services to Data-Marketing and Sponsorship Marketing. Enlyne Branding was sub-contracted to work on several campaigns within the sports and entertainment industry.

Its service offering goes beyond just activation and marketing, but we procure and secure sponsorship, manage and measure the sponsorship for reporting and value adding. Dumi has worked on several sponsorship campaigns and Enlyne Branding’s service offering is focused on ensuring that sponsors benefit from the right holder’s property. Part of its services is Strategic Marketing Planning and Property Planning.

Tel: 011 039 5658