Sponsorships are one of the oldest marketing tactics in the book, thanks to their long legacy of success. Since the earliest days of marketing and advertising, organizations have sought out key partners to help them expand their brand presence and effectively connect with target audiences.
Even as new technology turns marketing strategy on its head, sponsorships remain a steady cornerstone of business investment plans— based on KORE data in North America, the sports industry alone is responsible for managing $6.5 billion in sponsorship annually. In fact, sponsorships are more valuable than ever as tools for creating brand loyalty and building long-lasting connections.
But despite so much big money flowing into sponsorships, the COVID-19 recession has prompted businesses to look more closely at the return on these investments. In the past, it was often easy to internally sell the idea of partnering with a major sports team since the perceived value is so great. What organization wouldn't want to leverage a team's massive presence and large fan base? But with today's tighter budgets, there's more scrutiny of these investments.
How can an organization be confident that it's investing with the right partners? If you have to reduce your sponsorship spend, how would you be sure you aren't dropping the wrong ones? The key is to go with the data, not the "feel-good" perceived value. Sponsorship sellers have become far more sophisticated in using their data to ensure they sell to the right partners at the right price—it's time for buyers to do the same! Here are four steps to help sponsors get on the right path:
1. Define Your Objectives
First and foremost, organizations need a clear understanding of their objectives and how to recognize returns. What will it take for a sponsorship to be deemed successful? Once objectives are clear, it’s much easier to choose partners that can help you achieve the desired ROO and ROI. You may already have the right partners, but are you leveraging them in the best way? Is your asset mix aligned with your goals? To answer these questions, you need clear expectations around objectives and results.
2. Assess Equity Fit
Once you understand your objectives and have a system for tracking your returns, you can identify which partners will be most strategic for your organization. Weed out the partnerships that don’t align with your brand and where you want to take it. Make sure you're targeting partnerships that will help you distinguish your organization and stand out from the rest. Will these partners help you connect with your key consumer base?
Assessing equity fit to find the right partners with the right value propositions for your business may even help you find a pattern or a space that you can own by virtue of association.
3. Hold Your Partners Accountable
Accountability begins with fully understanding the story you want to tell, the results you’re trying to deliver, and the expectations you have for each partnership. These are the foundation for setting clear expectations with your partners. With this in place, organizations can negotiate opportunities and test different strategies. If your goals aren't being met, you can work with your partner to adapt—a good partner understands that your success is their success too.
4. Measure the Results
How will you know when your organization has effective partnerships with the right partners? Without measuring the results, it's too easy for sponsorship investments to underperform and go unnoticed. It's crucial to look at the data and determine if your objectives are being met. Software can help you compare different partnerships and evaluate which ones need to be optimized or possibly eliminated. Data-backed decision-making empowers you to make better business decisions and justify your spending.
When executed effectively, your sponsorship strategy can provide much more than just brand awareness. Do your investments directly correlate with your organization's objectives? Do they engage the passions and interests of the customers you want to serve? Feel-good perceived value may have been sufficient in the past, but organizations that leverage these guidelines can be certain they're making sound investments that truly deliver.
Do you want to get a handle on which partnerships are right for your business? KORE Software can help. Request a free demo to get started.