For Sponsors, 3 Steps Towards Transparency

Earlier this year, politicians, the media, and just about everyone with an opinion, it seemed, publicly flogged Northern Trust Bank for proceeding with the second year of its five-year commitment to PGA Golf because it received TARP funds. According to the bank's CEO, no public dollars funded the sponsorship, and fiscally sound, doing quite well, the bank went forth with a sponsorship program its leadership clearly values. Furthermore, they participated in TARP at the government's request, not because they needed the money. (You can read more about it and the effect this event had on sponsorship in my guidebook How to Jump-start Your Sponsorship Strategy in Tough Times.) I respect Northern Trust for honoring its commitment and for stating clearly its position in doing so. Corporate sponsorship is a marketing vehicle that gets results. Period. If executed properly, corporations of all sizes benefit from incorporating sponsorship and event marketing into their overall business or marketing strategies.

After that incident other banks actually refused TARP dollars to avoid government and public scrutiny of their business decisions. And, of course, we all know that by June, ten banks, including Northern Trust, exited TARP, repaying the public funding plus dividends and other fees.

Some banks and financial firms have not been so bold. The New York Times reported on various corporations' "'stealth spending,'" as one source phrased it, on event marketing. These companies are paying five- and six-figures to entertain clients, sans branding and identification of any kind. And also without a speck of luxury.

I have no problem with the luxury piece of it (though the article does describe an extreme example which, though almost absurd, should serve as a cautionary note to event planners and other sponsorship sellers). After all there's a way to entertain clients and there's a way to entertain clients. I know many corporations that have had great success entertaining clients, employees, vendors, and other VIPs, without A-level musical talent at their receptions.

I do have a problem with the lack of transparency, with the sneakiness about the whole thing. Entertaining others works. It's a legitimate way to build relationships with clients, employees, vendors, and their guests.

If you don't believe me, take a look at this example. Have you ever heard of Terry's El Mariachi Supermarkets? If you live in or near Dallas, probably you have. Terry's Supermarket is a chain of 13 stores that embraces the multi-cultural city it and its owner's family call home. It sells products from other countries, especially Mexico, and serves the Latino community.

Terry Yu, the owner, invested $175,000 in a suite at the Dallas Cowboys' fancy new stadium to reward employees and vendors, with whose support and loyalty his business has grown. He told the Dallas Morning News about what a "great investment" the luxury suite has been for him to provide a perk to staff and suppliers. (One of the first NFL franchises to broadcast in Spanish, the Cowboys have a large fan base in Texas and the Southwest's Latino population, primarily from Mexico. So, imagine what a great perk this is.)

If entertaining employees and vendors works for Terry Yu, imagine how well it works for large companies that entertain clients and customers.

So, as a corporate sponsor, there are only three ways to go in these times:

1. Discontinue sponsorship and be clear with stakeholders about that decision.

2. Acknowledge that particular sponsorship investments work, meets your goals, provide value towards meeting your business objectives, and be clear with the public, the media, and politicians about that decision. Follow Mr. Yu's example. Help educate the broader world about why you entertain clients or participate in other forms of sponsorship. But don't sneak around pretending to not be entertaining clients.

3. Be bold. Acknowledge that sponsorship works and figure out new ways to do it that are not only acceptable for the times but that push the bar higher. Take a stand in support of a cause with strong brand alignment and entertain your clients in a day of service. Or in a cause marketing campaign to support your charity. (A February study on consumer perceptions on American corporations, which noted a 69 percent drop, revealed that corporations that invest in a nonprofit organization or cause will win the favor of those consumers by 41 percent.)

Then shout it from the roof tops. And build your business at the same time.

If you're working with corporations in the sponsorship of your opportunity, be sure your communications, internally and externally, are supportive of corporate partners. If you uncover anti-corporate sentimentality, bring it to the surface and allow people to talk about it. Educate them without being dismissive, blundering, or breezy. Create parameters and policies that the staff, board, and other stakeholders will feel comfortable upholding. .

Gail Bower is President of Bower & Co. Consulting LLC, a firm that assists nonprofit organizations and event/festival producers with dramatically raising their visibility, revenue, and impact. Gail Bower is a professional consultant, writer, and speaker, with nearly 25 years of experience managing some of the country’s most important events, festivals, and sponsorships and implementing marketing programs for clients. Her blog is http://www.SponsorshipStrategist.com and you can see all of Gail's past posts here.

photo credit via flickr: Brooks Elliott