Tips On Negotiation Sponsorship By William Boucher Just about everyone who works in marketing has either been pitched a corporate sponsorship or has sought one to support a marketing plan, market entry or product launch. But long gone are the days when marketing budgets were so flush with cash that the sole objective of a sponsorship was to see your company’s name on a banner or brochure. Today, we expect sponsorships to deliver accountability and revenue. I have the enviable position of assessing and managing several sponsorships, which range in value from a few thousand dollars to the high-six figures, including some major league sports sponsorships. My approach to sponsorship management is to segment activities into discrete stages: 1. Justification and Alignment 2. RFPs, Searches and Assessment 3. Negotiation 4. Activation Plan and Integration 5. Metrics/KPIs 6. Extensions and Exiting In my experience, it’s the “negotiation” stage that is often overlooked. Negotiating a Sponsorship Before you begin to negotiate a
mon mistake is to allow the sponsor to shoulder all of the activation and accountabilities. When reviewing a list of benefits, I focus on revenue-generating opportunities over brand awareness—although both can be situationally important. I negotiate to keep only those benefits that closely align to my marketing objectives and deliver tangible value, and I ask for more when I see a void. A good sponsorship entity will want to design the sponsorship to meet your unique needs. One tip: be mindful of the number of moving parts in a sponsorship; the more benefits, the more time is necessary to manage the sponsorship. If the price is too high relative to the value of the benefits, ask for a reduction as well as a better mix of benefits. If you’re not comfortable with an annual fee escalation in a multi-year deal, ask for it to be waived. A stable multi-year deal is more valuable to a sponsorship entity than an annual escalation clause. Every sponsor venue I’ve worked with eventually met both my budget and benefit requirements. It’s also possible to change benefits mid-stream if you find that a benefit fails to deliver. A good sponsorship entity will want to make the sponsorship successful and, therefore, be flexible. Just discuss and document this possibility before you sign the contract. Finally, if the sponsorship includes media assets (and most do), this should receive a critical eye. If you have a media buyer or advertising agency, allow
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If the sponsorship includes media... this should receive a critical eye sponsorship, you should have identified your objectives carefully during the Justification stage. If a sponsorship doesn’t align with them, stop the process! Sponsorships should be treated as a pragmatic business decision, rather than as a way to maintain a relationship with a vendor or someone else with whom you do business. Each sponsorship document typically has two sections: the legalese defining roles, fees and accountabilities; and the list of benefits to your organization. The latter will drive your fee. If you have a procurement or compliance officer, make sure to bring him or her in on the contract portion, especially if the sponsorship is complex. If you work in a regulated industry, it’s particularly important to have another set of eyes review the contract language. If you’re sole, slowly wade through the contract language to ensure the right accountabilities are assigned to both parties. Success is a function of having both the sponsor and sponsorship entity having skin in the game. A com-
them to review the media component to ensure it’s not over-valued. For instance, if television spots run at 3am, this won’t drive value to your brand. And if your logo is on a website with several other corporate logos, the impact is highly diluted. Importantly, there is currently no way to value social media mentions, so any sponsorship that puts a price tage on them is doing so without the benefit of underlying science. Sponsorships can be a mutually beneficial way to raise your brand’s profile. They can position your company as an engaged corporate citizen while driving sales and revenue. But, before you part with your money, make sure that you’ve negotiated sufficiently to ensure a strategic win for your bottom line. • William Boucher is the senior vice president of marketing for KeyBank Northwest. He can be reached at william_ boucher@keybank.com. send share save