Scenario Planning Meets Sponsorships

We all know that events and sponsorships have positive effects on communities and move the needle for sponsoring brands. However, especially in these whitewater economic times, is your entertainment or sport property able to communicate this principle to its existing and prospective sponsors? Has your organization contemplated this question multiple times already, but run out of fresh strategic approaches for generating ideas to make it happen?

One approach that might help is scenario planning.

The beauty of this approach lies within its simplicity; the technique is highly flexible, has a short learning curve, and won’t waste a bunch of time either in the practicing or doing. Instead, it simply builds on the usefulness of the anticipation and imagination that scenario-planning exercises can generate.

Here are a few articles and thinking points to get you started.

When A Feasibility Study Isn’t Feasible: The Value of Scenario Planning

A complete analysis of an initiative’s economic impact often burns resources that an organization in today’s turbulent climate may not be able to identify, afford, or acquire. SWOT analyses are certainly important in given environs, but they often require outside consultants with relevant experience; bring added layers of time, involvement, and expense; and may reveal a wild goose chase in the end.

In some instances, planning from scratch doesn’t need to occur. It’s already been done; all that’s needed is process improvement, which shouldn’t necessitate the reinvention of the existing wheel.

In other instances, even if all other resources are available, the luxury of time allotments for detailed analyses may not exist.

Nevertheless, planning simply can’t be dismissed; even on the fly, entertainment or sport properties obviously must assess ideas that surface, and they need rubrics to guide evaluative thinking.

The remainder of this article gives you some back-of-the-envelope techniques to employ and quickly assess the impact that newly hatched ideas could have for sponsors by shifting the focus directly to them, and without elaborate computer models and economic theory.

Step 1: A Quick Read on Scenario Planning To Swing Your Thinking

First, examine the article “Pendulum is Swinging Back on Scenario Planning” from The Wall Street Journal. It discusses how scenario planning creates flexible long-term action plans based on multiple variables for correct, adaptable action (instead of reactive, corrective action). Using scenario planning can provide a competitive advantage and intelligence that can be utilized on the fly.

Another boost this article will provide is to clarify the need to let strategies be driven by goals and objectives instead of mere financial allotments.

Dr. Benjamin D. Goss, an associate professor of sport management at Missouri State University and sport consultant, calls this a paradigm shift away from a “planning to a budget” approach toward a “budgeting to a plan” approach. In other words, instead of accepting an existing pie of a certain size and deciding how to divide it while hoping that everyone will be happy with his/her allotted portion, the new paradigm would instead call for planning on how big the pie should be before its creation so that everyone had exactly as much as s/he wanted. Very sound wisdom to know the difference, especially in the area of sponsorships, since existing budgets may not allow for the execution of effective future initiatives, such as those involving social media and technology.

Step 2: Getting Everyone On The Same Page

Too often, the left-brained, analytic thinking patterns of CFO-types conflict (to put it mildly) with the right-brained, intuitive thinking of CMO-types. In addition to letting the plan dictate the budget, what else can be done to unify strategic thinking among an organization’s members (outside deeply detailed expensive analyses described earlier)?

Services like SponsorPitch provide a valuable resource to help CFOs and CMOs collaborate in managing costs and revenue streams. For too long, the primary organizational survival theme has been controlling costs, which can drive a wedge between the finance and marketing sides of the organization, resulting in disengagement of these two stakeholder camps.

To produce results in the sponsorship game, these areas must be fully engaged with the business strategy and the 4 P’s of strategic execution/thinkers: perceptions, performance, purpose, and process. When evaluating strategies along those four lines, the obvious essential value of collaboration between the two camps emerges quickly. Accordingly, the organizational house cannot be divided, because both sides quickly see their codependence and can plan to work together much earlier in the process than through other traditional strategic formulation process (i.e., the SWOT analysis).

Step 3: Mimic Previously Successful Scenario-Planning Cases

Let’s briefly examine two sponsorship scenarios in which scenario planning saved the day. In each instance, notice the distinct lack of available time for a detailed analysis.

Case1: Amid new arena construction, its new cutting-edge telecommunications program ran over budget. What to do? Sponsorships rescued the telecom initiative, thanks to the use of an old marquee that was turned into a yearly six-figure generator via a sponsorship negotiated with a telecom company. This sponsorship provided both cash and value-in-kind for the telecom project, but it would never have occurred without a pitch to the sponsor that clearly showed them value gained by entry into venue and sports teams business processes.

Did this happen by accident? Not by a long shot; scenario planning that included ROI models for a potential sponsor were created in advance when team members were encouraged to engage in scenario planning long before the first spade of dirt was ever turned on the project. Suddenly, a dire need existed, but scenario planning turned a cost center turned into a profit center, bringing smiles to both the CFO and CMO, not to mention the CEO!

Case 2: Sometimes in the event and sponsorship business, time crunches become even more acute, thereby ratcheting up the importance of scenario planning. Fifteen hours prior to kickoff time of an NFL Monday Night Football broadcast, the entire Oakland Coliseum complex suffered a power outage. This unplanned event utterly disrupted the usual optimal-case event preparations, but thanks to scenario planning, this contingency factor had already been addressed, and correct action was at the ready.

Quickly switching to the prepared contingency plan, a generator was soon rolled into place, and working frantically with PG&E, the Coliseum team brought power online in time to allow fans to enter the stadium and to meet the scheduled television kickoff time. Imagine the possible penalties or give-backs in sponsorship contracts had the event not proceeded as scheduled! And would anyone want to deal with 40,000+ disgruntled members of Raider Nation at the gates?

Unresolved case: How can scenario planning resolve a current dilemma? Facing an unprecedented financial crisis, the State of California has openly proposed the idea of corporate sponsorship to generate funding for its state parks. While few would probably consider this a desirable option, the state may literally have no other choice but to pursue this course of action if it wants to keep its parks open.

Per se, the idea certainly seems workable and attractive. Nevertheless, though a potentially workable solution exists that can generate needed revenue for the properties and provide valuable platforms for sponsors, successful scenario planning must be generated. Time is of the essence; a large-scale SWOT analysis won’t be feasible. How can the State of California make the notion of sponsorships of its state parks work?