Corporate Sponsorship Best Practices:
Better friend-raising leads to better fund raising
by Pat Kahnert
September 1999
Part 1: Cultivating the relationship
Part 2: A disciplined approach to sponsorship decisions
In 1987, I was given a tremendous opportunity to develop the right sponsorship program strategy for Royal Bank. When I showed up on the assignment as manager, event marketing for the bank, one of my first questions was, "What's my budget?" The answer was, "Nothing." At least, no budget for year one, or until we proved up the right formula for success.
My job was to look, listen and learn about the complex world of corporate sponsorship. I looked at what Royal Bank and other corporations were doing in sponsorships. I listened to 1,200 pitches from event organizers looking for our money, our name (for endorsement purposes), our network (for promotional purposes) and our people. And, I learned that most event organizers were offering solutions in search of a problem, and I learned that Royal Bank needed its own strategy and model for evaluating, negotiating, designing, implementing and measuring selected sponsorships.
Friendly ways to say "no"
I also learned how to say "NO", 1,200 different ways. People started called me, Dr No, and I was even asked to speak at international conferences about "75 Ways To Say NO to event organizers and leave them smiling." That's right, each and every event that approached us was declined in 1988, but all of the event organizers left with a smile knowing that they had been treated with dignity and respect, and that one day the investment they made in a potential friendship with Royal Bank people might pay off in a sponsorship deal with us. Above all, we were honest and open in explaining our reasons for not accepting the sponsorship invitation at the time. For instance, here are some of the more common reasons we declined sundry sponsorships:
- There's no marketing need to justify participation.
- This is more of a donation, or underwriting request, than a marketing consideration.
- The event's audience is too non-specific.
- The sponsorship request does not meet specific bank event marketing sponsorship criteria.
- The sponsorship fee is unreasonable.
- There is clutter amid sponsors and no singular point of ownership available.
- The offer of "free" event tickets and corporate logo recognition are not enough to justify investment of fees, promotional dollars, time and effort.
At the end of the first year of getting in the know by just saying "no", we concluded that every business needs a sponsorship model; it is the only way to assess opportunities and measure your success in making the most of limited sponsorship dollars, limited promotional funds and even more limited time.
A proven sponsorship model
The Royal Bank sponsorship decision support model I created in 1988 with Peter Case, former vice-president of advertising and sponsorship marketing of Royal Bank Financial Group, put existing and prospective bank sponsorships to "the acid test." (Please note that Royal Bank no longer uses this checklist in its selection process.) Here's how it worked: The sponsorship model involved a 30-point checklist of things that are important to business people in selecting the right things with which they want to be associated. A proposal must score positively in at least 24 of the 30 questions before moving forward to further discussion and negotiation with the group presenting the proposal.
The model demanded the up-front connection with Strategic priorities (questions 1)...A point was earned if the proposal complements an existing sponsorship program (Q2).
The model then looked at the Event Organizer's Reputation and Credibility (Q3-7). For instance, many event organizers asked us for a sponsorship commitment, when they had not even considered banking with Royal Bank. We thought that if an event is right for us to sponsor, then our service is right for the event organizers to use. We also looked at an event organizer's track record in satisfying sponsors by doing what they promise to do, and by taking accountability for their side of a deal.
The Funding request was considered separately (Q8-11). After awhile you develop good sense of proper pricing (Q8). It's important that there was room in our plan (Q9), budgets and time (Q10). The interest and willingness to invest time and money from others in the company (Q11) scored a big point. The model then considered specific Marketing Potential offered by a prospective arrangement (Q12-16). It placed value on industry exclusivity (Q12), a clearly defined audience (Q13), and an opportunity to provide a valued memory for best customers (Q14), while meeting specific marketing goals (Q15) and supporting local market business generation activities (Q16).
It is one thing to do something good, it is another thing to let the right people know that you're doing it and what it means to them. That is why Media Extensions (Q17-19) were critically important to sponsorship decisions. Positive national and local media exposure (Q17) was valued, and it always preferred to link a sponsor's advertising and sales programs to a given sponsorship (Q19). Plus, the model placed a high value on getting "title" to an event, or an event within the event (Q18).
Business Development Potential (Q20 and 21) was measured. Did the sponsorship support defined community relations goals (Q20)? Would the proposal help achieve business retention, growth and attraction goals (Q21)?
The Community Relations Potential scored four areas of consideration (Q22-25), including the ability to support relationship goals with key customers and community stakeholders (Q22) and corporate reputation and image attributes (Q23). Employee support of a proposal (Q24) and the opportunity for families and friends to derive personal benefit from a sponsorship (Q25) were critical to the decision.
The model then moved into the final five questions, all surrounding the ability to extract Distinct Positioning Potential from a sponsorship (Q26-30). Was there future opportunity to enhance the investment through category exclusivity and right of first refusal on future events (Q26 and Q27)? Could the sponsor control corporate image promotion sponsorship promotional activities and materials (Q28). Had the sponsor's advertising and public relations specialists been given a chance to provide advise and counsel before signing off on a deal (Q29). And, finally, had specific objectives been set for sponsorship involvement, and had measurement criteria been articulated to assure success (Q30)?
A good sponsorship is worth the time and effort
The right sponsorship decisions always involve money, time and effort. You need to be sure we can derive, within a specified time frame, a reasonable ROI (Return on Investment) and ROE (Return on Effort). The sponsorship model, in itself, does not assure payback. Payback requires follow through, imagination, creativity, accountability and, importantly, friendships. My experience in this business of sponsorship is that the lack of attention to these key variables is a major reason why many companies walk away from sponsorship commitments shaking their heads about whether or not they got their money's worth.
I would like to note one key lesson that I have learned, sometimes the hard way. A deal is only as good as the ability of each partner to do what they said they were going to do. Over-promising combined with under-delivery will always erode a relationship. Sponsorships are not always made in heaven. But, they are too expensive and too complicated to pass off lightly.
It takes a long time to build trust and confidence, and you can lose it in the snap of your fingers!
And my final question: How do you show a sponsor you truly appreciate his or her involvement in your event? Here are some thoughts for winning sponsor relations that focus on friend raising first, remembering that better friend raising does lead to better fund raising:
- Accentuate the positives -- always.
- Take the time and care to earn trust and confidence.
- Respect the feelings of others and treat them with dignity.
- Remember that people may forget what you said and what you did, but they will never forget how you made them feel.
- Do what you promise and do it exceedingly well.
- Keep sponsors by building value.
- Go the extra mile, where there is little traffic.
- Show your appreciation by just saying thanks... and by always showing respect.
- Develop and stick to your plan for delighting sponsors and protecting their rights.
- Show enthusiasm and help your sponsors derive optimal value from their investment of time, effort and money.
- Admit mistakes, be accountable for righting then and avoiding them in future. Treat sponsors like friends and you will both succeed for a long time. Take a sponsorship relationship for granted and you better have a succession plan in place, because there are many sponsorship options available in the marketplace right now.
- Develop yourself to be a master event organizer and friend of your valued sponsors.
Image management consultant Pat Kahnert of Oakville, has shared this advice with audiences of fundraisers and sponsors throughout Ontario. Following 16 years of senior-level corporate reputation and image management leadership, Pat is now leading PBK and Associates as managing partner, serving Royal Bank friends and other business, government and voluntary sector customers. In this provocative article, he shares his secrets of success in using a proven sponsorship model and corporate "heart and soul" approach to the creation and implementation of win-win sponsorship relationships.
Pat Kahnert, Managing Partner, PBK and Associates Inc. can be reached at pbk@cogeco.ca.
Please note that PBK is a fee-for-services corporate communications consulting
business.
