May 24, 2011 at 02:52 PM
written by Kris Mathis

Defining 'Sponsorship Sales'

IEG has a new service methodology that allows it to, on behalf of property clients, sit down with their potential sponsors, tailor sponsorship assets to business objectives and determine how the potential sponsor can accurately quantify the return, if it agrees to a deal. Like a smart property, and like many other savvy motorsports properties with much smaller budgets, Roush is making every effort to help its partners measure major sponsorship investments. It's good business and it's been much talked about thanks to a piece Forbes wrote last week...

"The proprietary system calls for reps from Roush Fenway and IEG to sit down with potential sponsors and walk through a process of setting a specific objective and then tailoring the sponsor activity to meet it."

I'm not going to debate how innovative this new methodology is, as others have done in recent days, but what makes the piece interesting to me is the fact that a third party wants to start justifying ROI to potential sponsors, not just renewals, which as you probably know the WPP agency has been doing for years. That's where the idea of what selling is gets blurry, in my opinion, and serves up the perfect intro for a discussion about the definition of sponsorship sales, itself. I don't know where the line between selling is and isn't - or where you set it - but it's something worth thinking about and talking about.

What I do know, and what the ensuing discourse from that piece makes clear, is that the modern idea of "selling sponsorship" looks a lot different these days. It looks a lot different than it did prior to the recession a few years ago. And it looks a lot different than it did when IEG got started in 1981. This is a good thing- the industry has evolved, but it also means the lines of what is and isn't selling are becoming blurry. Like IEG, several agencies on the buy-side will not sell because it creates a conflict of interest. Some seem to bristle at the inference that they are. But for that statement to hold any value doesn't there need to be an understanding of what constitutes selling in the first place?

Thousands of members of this site are reviewing potential sponsors business objectives against their sponsorship opportunities every day and helping their sponsors define how they'll be able to measure and justify the investment to stakeholders. It might not be in their formal job description, but to them, that's just a part of selling sponsorship - not a separate bucket called consulting to potential sponsors. Sure, it may carry more weight if it comes from a third party, but does the introduction of a third party mean it's not selling? Maybe.

The fairest determinant, in my opinion, is to follow the money. Ask the question: how is the agency getting compensated? If the agency is getting a flat fee from clients irrespective of any outcome with regard to signing or renewing sponsors, then they're getting paid for their time and expertise, and are probably providing strategy consulting. If they're getting compensated, in part or in whole, based on how "prospective sponsors" react to their client's offer (i.e. they're getting a commission on earned or renewed sponsors) then their incentives are aligned with the seller, not the buyer. They're selling. (note: I don't know which type of compensation model IEG has set-up with Roush, but that's not the point of the blog post).

In my opinion, selling sponsorship is not confined to a narrow window of simply researching, contacting and negotiating with prospects. That may have been how it was done years ago when bronze, silver and gold packages were in vogue, but in 2011 it's a lot more than that. Any sales agency worth its fees is actively pairing its assets to researched business objectives and doing everything in its power to ensure that current and potential sponsors are using the right measurement tactics, aligned to reveal an accurate picture of the returns on those assets. It's in your interest as a salesperson that the buyer accurately quantify return and in my opinion, having that discussion in advance is part of a good sales pitch. Before signing an initial agreement, ask how will this be measured and what kind of return does it need to show in order for it to be renewed, that way you can start creating an objective framework for a renewal before a deal is ever signed. You don't need a third party for that discussion. In fact, it seems for many salespeople that is already a core part of the modern idea of sponsorship sales along with researching, contacting prospects, negotiating the deal and a host of other things including post event reporting, because even the the person you're selling has to, themselves, sell (or re-sell) the sponsorship to other constituencies, in many cases.

And just to be clear, a property being pro-active enough to bundle in objective measurement with a sponsorship package seems like a great idea. I just question, how this co-exists with the sales process, when the third party is introduced, compensated by the property and takes an active role in crafting the relationship on its behalf, prior to a deal being done.

As long as the sponsor's happy with the outcome I suppose everybody wins, but it does raise and lead back to an interesting question. What is your definition of "selling sponsorship?" Where does it begin, where does it end, and how has it evolved?


The opinions expressed herein do not necessarily represent those of the publisher, SponsorPitch, LLC.