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Deriving value from sponsorships: sponsorship deals can be a means for companies to gain a competitive advantage. Sponsorships provide a valuable way to reach target customers, reinforce messages to existing customers, facilitate loyalty of both customers and staff, and increase the brand in the marketplace.


IN TODAY'S competitive environment, sponsorship deals can be a means for companies to gain a competitive advantage. Sponsorships provide a valuable way to reach target customers, reinforce messages to existing customers, facilitate loyalty of both customers and staff, and increase the brand in the marketplace. To drive value from any sponsorship deal, the activities need to be compatible with existing marketing programme and integrate other marketing activities.

A business sponsorship might involve paying an organiser to be part of an event or activity such as festivals, community functions, conferences, trade shows, sporting game or season, or it might involve participating in a planned programme of activities such as attending forums, committee meetings for an industry, providing staff to assist fund raise or other forms of support for charitable foundations, or supporting a local team or project. The list is endless. A well-managed sponsorship programme that is integrated into the strategic marketing plan means that the costs and resources can be measured in both quantitative and qualitative terms in relation to outcomes.

When deciding on entering into a sponsorship agreement, it is essential to undertake research. There are many opportunities to sponsor; consideration needs to be given to the number of sponsorships, types of activities, costs including resources, intended outcome as well as some review of the conference organisers.

Guidelines can be devised to assist in reviewing sponsorship proposals if these meet the company's needs as well as provide some background on the organisers and their ability to deliver as agreed. It is important to consider these three elements, because if one fails, then this will affect the success of the sponsorship and has potential reputation or brand outcomes.

Companies receive a number of opportunities to sponsor and these take time to review, clarify, and respond. Part of the set of guidelines might be externally communicated to potential companies seeking sponsorship, this may make the initial review easier. This can be placed on the company's Web site and assist in eliminating responses that are clearly not in line with the company's needs or potential opportunities that require clarification.


This externally communicated guideline that provides an overview of the sponsorship opportunity might include request for the following information:

* What is the nature of the sponsorship opportunity?

* What are the activities associated with the sponsorship?

* Amount requested, duration, and payment dates

* What is expected from the company to contribute to the sponsorship?

* What the company is expected to contribute in terms of support, and the monetary value of this support (that is, add-on costs which might include provision of printed materials, allocation of people to attend the event).

* Cost of sponsorship management, promotion, advertising, travel, and hospitality.

* Naming rights, recognition programmes, advertising signage, and anticipated media coverage.

* Opportunities to address the audience at a function, and

* Opportunities for display of products.

About the Organiser

Another element of importance is understanding who the conference organisers are. Researching the organisers can be considered as a second step if the company is actively considering the sponsorship. This review can be done directly with the sponsorship organiser while the sponsorship is actively under consideration.

* Credibility Number of satisfied companies who have used their services in the past or the number of years in delivering sponsorships. These will provide information that forms the organiser's reputation in the marketplace. It might be advisable to ask for referees to provide information about the services and delivery from a client perspective.

* Capability: Evidence of the organiser's ability to deliver the sponsorship or activity to show how the contributions will be used. Consider asking what other events the organiser is managing at the same time and how they plan to manage contingencies arising from overlapping use of resources

* Commitment. Where will the sponsorship sit in terms of priorities, level of innovation if required, and also ensuring all elements are met?

* Reporting or wrap up: What will the conference organiser provide in terms of reporting on outcomes and, if applicable, measuring success of the campaign? When will this be provided? This is important data and should not be delivered months after the event.

* Networks-Will the conference organiser be able to provide opportunities for the sponsors to network with others? Is there an indicative list provided?

* Breach of agreement. What recourse is available and what is the process if the organiser does not meet the agreement?

Self Test

A final element in considering a sponsorship is the self test. This involves reviewing the company's strategy and ability to commit to the sponsor ship opportunity. Commitment to a sponsorship and active participation are key to maximising the investment. A reliance on outsourcing responsibility to the organiser without consideration of prioritisation or focus will reduce the impact of the sponsorship.

* Is the sponsorship in line with the strategic objectives of the company? Is it aligned to an industry focus, target activities, profiling plans, and product development cycle?

* Does the event have other sponsors? If so, are these competitors? What is their exposure?

* Potential value of business generation.

* Identification and quantification of target markets.

* Influential connections associated with the sponsorship.

* Is the sponsorship cost excessive? Can a counter-offer be made? Who can negotiate this and what is the fall-back position?

* If reports are required, when they are due and to whom?

* Are there options to renew the sponsorship when it expires?

* What is the resource or time commitment to attend events or ongoing activities?

Sponsorships provide a valuable tool in going to market and differentiating companies in a highly competitive environment. Through sponsorship, companies can profile themselves to existing and target customers as well as reinforce their brand. It is essential that a sponsorship is considered from both internal and external perspectives to ensure that the activities are in line with the company's strategic objectives and for appropriate resources to support the activities. Careful consideration needs to be undertaken in reviewing both internal and external elements in order for the company to maximise the potential that a selected sponsorship opportunity brings.

Louise Robinson is a national director of business development and marketing with over 10 years of professional services experience in large Australian legal and global accounting firms. She is based in Melbourne, and advises clients on strategic parmerships, particularly with a global focus. Daryll Cahill is a senior lecturer in the School of Accounting and Law, RMIT University, Melbourne, with research interest in measuring intangible assets and intellectual capital.
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Title Annotation:BUSINESS
Author:Robinson, Louise; Cahill, Daryll
Publication:Today's Manager
Geographic Code:1USA
Date:Oct 1, 2008
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