By Alan L. Kleinfeld, CMP
Sponsorships can enhance your event bottom line and bolster attendee value.
Budgets are challenges, regardless of industry. They get smaller each year as prices climb. We seem to always seek that open wallet to fund meetings.
So what to do after you’ve hammered the piggybank and used up every penny? Well, you could beg your board chairman to pawn his Rolex. Or consider selling a body part (if not yours, then a co-worker’s). If you are really desperate, try a sandwich board and ask for spare change from passersby at a street corner. Some of those guys make pretty good coin.
Another option—not only more dignified, but resulting in a better outcome—is to seek out sponsorships for your meetings. There are people and companies out there willing to help foot the bill for all of those meals, LCD projectors and banners. If you’re fortunate, perhaps someone will pay for a lot more than just one aspect of your meeting.
Sponsorship 101
To determine whether or not you need a sponsor, look at your membership revenue or meeting registrations. If they’re tapped out or if costs outpace your budget, consider looking for outside help.
“Assessing whether a sponsor is needed largely depends upon the overall scope, purpose and content of the meeting or event,” said Jennifer D. Collins, CMP, president and owner of The Event Planning Group. “For instance, if a program or initiative is directed toward a new audience, partnering with an organization, company or other type of sponsor that already has a relationship with that particular audience could be beneficial.”
Items up for sponsorship can even be based on post-conference survey results, as Elaine Powell, CMP, assistant director of meetings for the American Statistical Association, does.
“If a recommendation comes up that the members want to see at the next meeting, we will add it to our sponsorships list and see if we can get it sponsored. [We] then evaluate it after it has been implemented to see if we want to continue to place it as a sponsorship item from year to year or increase the registration fees to have it part of a member benefit at each meeting,” Powell said.
“We usually offer two options. One level of sponsorship will cover the entire cost of the sponsored item for the full funded amount; or we will offer the item for multiple sponsors at reduced costs. For example, a cyber cafe—one sponsor at $20,000 or four sponsors at $5,000 each.”
From Cents to Dollars
At the National Association of Health Underwriters (NAHU), planners employ a set sponsorship level program, but it wasn’t always so.
“We used to have a program that was based on specific aspects of the convention, such as meal functions or tote bags,” said Kathleen Cochran, CMP, CAE, NAHU vice president of meetings. “We found that the tote bags and lower-priced meal functions were snapped up quickly, and we may have lost sponsorship dollars when we ran out of items to offer companies who wanted to sponsor at the lowest level ($5,000) and couldn’t be persuaded to co-sponsor a higher-priced function.
“When we switched to a tiered sponsorship program five years ago, sponsorship revenue jumped more than 40 percent from the prior year. Our current tiered program has five levels ranging from $5,000 to $50,000 and up. All sponsorship levels include at least one exhibit booth. Other sponsor benefits, such as ads in our show daily, are based on the sponsorship level. And we do still give companies recognition for sponsoring meal functions or educational tracks and put company logos on tote bags, but now these benefits are tied to specific sponsorship levels.”
The method Cochran discusses has become more common, and many organizations have seen great success with such a program. In recent years, it has become more typical to take a bigger-picture approach that benefits the entire organization rather than just an event.
From Dollars to Value
“Sponsorship is a marketing relationship. It is unrestricted revenue that an association can use any way it chooses,” said Emily Rogers, senior vice president of advisory services and research, IEG LLC. “We see associations move money all the time. They have multiple events and often sell sponsorship event-by-event or program-by-program. When they do that, they cut short the value of an affiliation with a sponsor.”
She goes on to say that many of her clients find they can generate more revenue per sponsorship.
“If [an organization] thinks beyond the meeting or event, of how they can have a year-round affiliation, then sponsorship money can go right to the bottom line,” Rogers said.
Collins has heard of such methods and refers to this as, “nondues revenue, which is one of the hottest topics within the association community.
“Memberships for associations are fewer and reasons for joining have changed,” she said. “Therefore, it is in the best interest of associations to figure out a way to continue bringing in revenue without having to rely on the member.”
Rogers advises clients to go for many types of sponsors because how you sell and manage is different.
“How you manage those funds and how to keep those type of relations separate and distinct is different, depending on the sponsorship type,” Rogers said.
Collins and Rogers make a valid point. There are times when a company or organization can tap into multiple revenue sources even with a sponsorship from just one company.
“We slice and dice the audience to determine the best sponsorship approach,” Rogers said. “You can target to sell to individuals. Then you can look at companies who want to be in front of the decision makers of [your] industry. There’s always a distinct audience. It’s just a matter of figuring it out and determining who wants to reach that audience.”
Collins says sponsor benefits come “in the form of all sorts of things such as discounts on long distance learning or insurance programs. One of the associations I work with has a program with UPS to provide discounts on shipping. That is an added benefit to members and, of course, steers members to use UPS for that purpose. The key is finding the right type of arrangement for the association. [Building those relationships] is a longer process and ties into the strategic planning of the organization. Associations really need to understand who they are, know their members and understand their needs.”
To underscore the point, look no further than the National Federation of Independent Business (NFIB). Three years ago, when Jane F. Eakins joined NFIB as national director of corporate relations, sponsorship was handled without any strategic vision. The association used a tiered program, but from the sponsor perspective there was not enough difference between price points. In addition, it wasn’t clear how the dollar amount was established for each level.
“I realized that to earn a sizeable jump in sponsorship revenue we needed to make a few key tweaks in our property sales strategy,” Eakins said. She took five major steps (see sidebar), including receiving input from sponsors and repackaging assets, and the outcome was significant.
“We had a 30 percent jump in sponsorship and raised over $1 million.”
The story is similar at the Golf Course Superintendents Association of America (GCSAA).
“We used to sell sponsorships just à la carte,” said Mark Bisbing, director of corporate sales and marketing for the GCSAA. “We have a magazine, a trade show and sold those items independently. We never really packaged anything.”
When Bisbing joined the association, it was just beginning to learn of ways to capitalize on sponsorship dollars as suggested by IEG. Since then, he has put much of the new method into play.
“The new model has changed the relationship with the sponsor philosophically and internally, in many ways,” Bisbing said. “Instead of just selling them an ad in the magazine or a trade show booth they’re now an association partner.”
Bisbing explains that he will showcase and highlight sponsors based on investment in the association.
“We don’t tell them how to spend their money. They can invest to a level where they can get the best benefit.”
In addition, Bisbing uses a tiered and timed-level system to give sponsors more freedom. The association has started a new benefits plan and allows sponsors three years to reach a certain level.
The tiered program is based on the sponsor-investment level with the association. There is recognition of benefits, the difference being that Bisbing doesn’t sell the benefits as assets. Rather, all the dollars a sponsor gives are credited to them and that allows them to qualify for a certain level. If you, as a sponsor, want to get to a specific benefit, then you give that much more money.
“It’s created a situation where a company spending $70,000 now wants to spend $100,000 to get those extra benefits, and it has companies giving that much more money,” Bisbing said.
What makes it different for the GCSAA is the audience size it sells to. Just how many companies want to sell to those that handle golf course maintenance? Bisbing cites endemic relations—those that are within the golf course maintenance field.
“We don’t have any big relations with non-endemic partners,” Bisbing said. “But part of our sponsorship model is learning how to position the brand to be more attractive to non-endemic [relations]. We’ll leverage our endemic sponsorship to the maximum and we’ll increase revenue over three years from the endemic universe. But to grow your business in this marketplace you’ll need to steal market share.”
Bisbing is confident that as he grows his revenue with current industry-specific sponsors he’ll find other avenues, such as environmental or chemical companies, that may find a market in selling to GCSAA members.
Once the partnership with sponsors is formed, Rogers recommends that the organization start and stay in the driver seat.
“Be proactive, not reactive,” she said. “A well-executed contract controlled and written by you will make all the difference.” It’s also important to manage expectations going into the relationship and be clear of the role of the sponsor.
“Part of empowering our clients is teaching them when to draw the line.”
As a result of sponsorship dollars paying for more than just events, it is often the case that the marketing or corporate relations office within an organization handles the relationship. IEG recommends sponsorship be centralized in one department so one team is strategically leveraging sponsorship benefits for all meetings and organization-wide.
To increase the sponsorship dollar, some companies are putting in the time to create long-term and meaningful relationships, where both parties come out on top. TMP
ALAN L. KLEINFELD, CMP, is principal of Washington, D.C.-based MeetingsONE Travel and Event Management. He can be reached at sponsorships@meetingsone.net.
Sidebar 1
Show Value
Realizing the need to produce a sizeable jump in sponsorship revenue, Jane F. Eakins, national director, corporate relations, sponsorship for the National Federation of Independent Business (NFIB) says the company made a few key tweaks in their property sales strategy. Step one? Take the pulse of the sponsors.
1) She solicited feedback from previous corporate partners to determine overall experience and perceived value of the relationship. After this, she realized that sponsors were confused as to the levels of sponsorship and delineation.
2) She repackaged the association’s assets by adding key benefits and “proprietary inventory so that each corporate sponsor could have ownership or exclusivity.”
3) She then acquired independent valuation so that she could show sponsors that the sponsorship amounts reflected industry standards. This also showed NFIB the value of its assets and sponsorship.
4) Next, she created more sponsorship levels, which accounted for 23 percent of the sponsorship revenue for just one event.
5) Lastly, she positioned partners as an added value for members. “To help sponsors receive better recognition, NFIB proactively communicated that partner/sponsorship support had allowed it to reduce the events’ registration fees.”
Sidebar 2
Association Sponsorship Best Practices
Offer fewer, bigger, year-round and/or event-wide opportunities
Offer unique benefits to top sponsors (access, positioning, proprietary Components)
Link sponsors to audience interests
Base pricing strategy on fair market value
Create partnership culture
Centralize corporate marketing sales efforts
Proactively meet sponsor objectives and provide fulfillment reports
Provided courtesy of IEG.