Selling
Three Successful Revenue-building Strategies For Properties
Sellers should explore partnering with other rightsholders and media, as well as creative fee structures.
11/2/09: Today’s challenging sales environment requires properties to adopt new strategies and tactics when selling sponsorship.
Below, three sellers that are seeing success and the new approaches they are employing.
Team with other properties. Seeking to enhance their sponsorship offers and attract new partners, the NHL Nashville Predators have teamed with Baker Curb Racing–owner of a NASCAR Nationwide Series team–to offer packages that include inventory from both organizations.
By bundling benefits, the two organizations can offer tailored marketing packages that provide both regional and national exposure on a year-round basis.
While NASCAR teams Roush Fenway Racing and Richard Petty Motorsports also offer sponsorship packages that include assets from pro sports teams owned by their corporate backers, the Predators/BCR relationship is different in that the companies do not share the same ownership.
The partnership is paying off: Since launching the program earlier this year, the properties have snagged several new partners, including Louisiana-Pacific Corp.’s LP Building Products unit.
BCR is focusing on national companies based in middle Tennessee, said president Matt Crews. The team is looking to raise its local presence after relocating to Music City USA two years ago.
“We are based here, and we race twice a year here, but we don’t have many local assets,” he said. “We started to look around and the Predators seemed a natural fit.”
The fit is natural because of the similarities between motorsports and hockey, said Chris Parker, executive vice president and chief sales officer for the Predators, pointing to the “controlled mayhem” in both sports.
The properties believe the relative novelty of the partnership spurs corporate interest in learning more about a potential sponsorship. That is especially important for BCR, which is scouting a replacement for Kimberly-Clark Corp.’s Kleenex brand, which is ending its longtime primary sponsorship after this year to move up to the Sprint Cup Series as a sponsor of a JTG Daugherty Racing entry.
Packages offered by the Predators and BCR include on-site exposure, sales rights and tickets to events at the hockey club’s Sommet Center home venue, as well as on-vehicle exposure, hospitality at races and ride-along programs.
For example, LP’s sponsorship package centers around hospitality at races, hockey games and BCR’s motorsports shop.
The two organizations have determined a method for splitting sponsor revenue, but declined to elaborate on details.
BCR and the Predators kicked off the new effort in June with a golf tournament for clients and prospects. The event featured race car drivers, coaches, front-office staff and other key personnel.
Partner with radio stations. The T-Mobile San Jose Mariachi and Mexican Heritage Festival presented by Target credits a nine percent increase in sponsorship revenue in part to a new partnership with a local radio station cluster owned by Clear Channel Communications, Inc.
While the September festival has worked with Clear Channel in the past, the two organizations this year struck a formal joint sales partnership.
Clear Channel and the festival worked together to identify open categories, prospects and inventory that could be used to develop tailored marketing solutions.
The partnership helped both organizations: The festival gained access to a sales force with local contacts, while the station gained event-related inventory, experiential marketing platforms and other added value to offer in conjunction with media buys.
The partnership secured two new festival partners: Anheuser-Busch, Inc.’s Bud Light and the six-store Chavez Supermarket chain.
“We received support for our music education program, while Clear Channel met its sales goals. It was definitely a situation where we created synergy,” said Marcela Davison Aviles, president and CEO of San Jose’s Mexican Heritage Corp. and executive producer of the festival.
Offer alternative payment structures. With companies facing tighter marketing budgets, some nonprofit properties are swapping up-front rights fees in favor of donations generated through cause marketing programs.
Sponsorship sales agency Wakeham & Associates Marketing employed the strategy for a deal it brokered between client Tree Canada and Canadian Tire Corp.
The retailer conducted an April-through-May promotion around which it donated $2 to the nonprofit with each purchase of one of its eco-friendly Blue Planet line of products, up to a maximum of $250,000, which it reached.
“Companies find this type of model easier to commit to, and it gets around the issue of tight sponsorship dollars in the down market,” said WAM president Hugh Wakeham. “It was great for Canadian Tire because there was no risk on their part. They had no financial commitment.”
The fundraising model also can tap other budgets for support. “We’re accessing sales promotion budgets to support these programs as opposed to sponsorship budgets,” Wakeham noted. “Companies still have promotional budgets because everyone is working harder to generate sales.”
Wakeham has struck similar deals on behalf of Tree Canada and other nonprofits. Xerox Canada Inc. ran a recent program in which it purchased trees in exchange for every company that agreed to a green business machine audit.
Other types of alternative payment structures include:
• Promotional commitments. Sponsor pays for a sponsorship fee through ad buys and other marketing programs that promote the property.
• Revised payment schedules. The total fee for a multiyear deal can be allocated so the sponsor pays a lower amount in the first year of a multiyear contract and higher fees in subsequent years.
• Escrow accounts. Sponsor places fee in an escrow account to ensure the property provides all deliverables. Funds are released once the property has met its contractual obligations. Similarly, a sponsor could require a property to post a performance bond that would reimburse the sponsor if established conditions were not met.
Sources
Baker Curb Racing, Tel: 615/262-3277
Nashville Predators, Tel: 615/770-2355
San Jose Mariachi and Mexican National Heritage Festival, Tel: 408/928-5551
Wakeham & Associates Marketing, Tel: 416/593-0040