Aug 24, 2009 at 03:01 PM
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Sponsorship: Product or Service?

Someone asked me back in grad school whether sponsorship was a product or a service. At first glance, the obvious answer was a service. The benefits are often intangible, the value depended a lot on the servicing of a contract, and developing an appropriate solution for client needs requires a lot of custom research. But then I started to realize that many of the proposals I had received on behalf of our clients sure felt a lot more like a product. We wanted intangible ideas, but there was really only a problem when the tangible goods were missing (logos, media spots, etc). Many times, there was very little originality or customization to the sales proposals we received. The pricing was structured to a fault (i.e. gold, silver, bronze levels), not based on anything variable like expended effort or performance. Ultimately, like almost all other transactions today, we netted out at sponsorship being a service with a heavy product delivery component (keep in mind, this was business school so our discussion was of course somewhat rooted in BS theory). In case you're interested, here's five quick differences Morningstar Multimedia lays out.

  • Services are intangible.
  • Service marketing involves building relationships and working together with clients.
  • Service providers must be more selective when choosing prospects.
  • Objections can be warnings rather than something to be overcome.
  • Pricing differs with projects.

    So anyway, this weekend I was flipping through books and came across Marketing Professional Services by management guru, Philip Kotler. The book got me back to thinking about the product vs. service question. Kotler is professor of international marketing at the Kellogg Graduate School of Management and an acclaimed author of many leading service marketing titles. In Marketing Professional Services, Kotler focuses his analysis on professional services (lawyers, doctors, CPAs), but there are many useful applications to the art (or science?) of sponsorship sales. Here's his list:

    10 Distinctive Problems Faced by Marketers of Services

    1. Third-party accountability

    2. Client uncertainty

    3. Demonstrating experience

    4. Limited differentiability

    5. Maintaining quality control

    6. Making the "do-ers" the sellers

    7. Allocating time to marketing

    8. Pressure to react rather than be proactive

    9. Conflicting views about advertising

    10. A limited marketing knowledge base

    You'll have to read the book for more detail, but some of these sound pretty familiar don't they? Success as a sponsorship seller, perhaps more than any other factor, depends on answering one question: how do we ensure our clients come to expect the quality control and fulfillment of a product with the customization and attention to detail of a service? Intangible ideas, tangible fulfillment.

    Can you answer this question for your organization? Be honest.