CHAPTER 12

Leverage

Although we’ve already addressed the importance of leverage to a sponsor when we talked about creating an offer, your job isn’t finished. Once a sponsor is on board, it’s critical to their success (and your renewal) that they actually leverage their sponsorship.

As a quick review, leverage is what a sponsor does with the sponsorship. You are selling opportunity; it is the leverage activities they undertake around it that provide them with the results they need for their brand and their company.

You may be thinking to yourself, “What does this have to do with me? I’ve already sold the sponsorship!,” and to an extent, you’d be right. It’s not your responsibility to leverage, but understanding some of the options for leveraging a sponsorship will allow you to gently educate your sponsors and encourage them to make the most of their sponsorship. We all know that a happy sponsor is a good sponsor, so helping them to achieve their goals is always in your best interest:

• They will achieve measurable objectives (and be more inclined to renew).

• They will see you putting effort into helping them achieve those objectives (and be more inclined to renew).

• Their leverage activities will augment your marketing plan.

• Their leverage activities will add value to your audience’s event experience.

• Their leverage activities may introduce your property to new markets.

• They will advocate you to other potential sponsors.

• They will be more likely to renew easily and at a higher level.

               Although leveraging is not your responsibility, encouraging it is always in your best interests.

You are probably also wondering what to do with that 10 to 15 percent of the sponsorship fee that we have told you to hold aside for servicing the sponsor. Again, that money is not to be used for taking them to lunch or for providing benefits that you have already promised in your agreement. It is for providing additional benefits that will assist your sponsor in achieving their objectives—leveraging their sponsorship.

When to Talk Leverage

The most important time to talk leverage with a sponsor is during the sales phase, and the most powerful thing you can do during that phase is to incorporate creative ideas for leverage into your proposal. This not only provides them with some strategic ideas and shortens their planning phase, but it sets the stage for them to really use the sponsorship, and does that from an early point in the relationship.

For your existing sponsors, the best time to start talking leverage is now. Sponsorship is, by its very nature, time-limited, and every day that goes by with a sponsorship unleveraged is a day they’ll never get back. As soon as practical, schedule some time to speak with your sponsors about how they’re going to leverage the sponsorship.

               The best time to talk leverage is now.

Encouraging Leverage

There are a number of strategies you can undertake to encourage your sponsors to effectively leverage their sponsorships.

Feed Them Leverage Ideas

We’ve gone through the whole process of finding big ideas for a sponsor leverage program back in Chapter 6: “Creating the Offer.” You should definitely be using that process to feed the sponsor ideas and create a vision for what the sponsorship can accomplish both during the initial sale and during renewal. But don’t stop there. If you’ve got a sponsor in the middle of a contract and they’re just not leveraging, one of your options is to go through that process on their behalf and present the ideas to them.

A good way to approach this would be to say something like:

       “We have recently taken a new and more sophisticated approach to sponsorship. That has given us a broader vision for what can be accomplished by sponsoring our property, and in the process, we’ve come up with some creative ideas that may help you get even more out of your investment.”

Run a Leverage Brainstorm Session

Even better than feeding them your ideas is to run a leverage brainstorm session with them. Tell them that you’ve got a new approach to helping sponsors leverage their investments and would they like to get together a group of stakeholders—people from departments that could potentially benefit from the sponsorship—for a leverage planning session, which you would be happy to facilitate.

Sponsors usually love the suggestion, as you’re basically volunteering to help them with both the planning and the internal sell-in in one fell swoop.

Once they’ve said yes, you should encourage them to invite a whole range of people, such as:

• Marketing management

• Brand management (one or a variety of brands)

• Sales

• Social media

• Website management

• Loyalty marketing/customer retention

• Advertising (in-house or agency)

• PR (in-house or agency)

• Major customer management

• New product development

• Retail liaison

• Human resources

These may all be different people or teams, there could be some crossover, or your sponsor could identify other roles to participate. Just consider this a starting place.

When they’re all in the same room with you and a big whiteboard or some butcher paper, take them through the same brainstorm process we taught you in Chapter 6. Remember, however, that you are facilitating a brainstorm, and that’s all about the possibilities. They have to keep an open mind, and so do you. They could come up with a fantastic idea that is good for them, you, and the fans, but requires swapping around some benefits. As long as they are willing to give up some less appropriate benefits, you should be willing to be flexible for a great idea.

               Be willing to be flexible for a great idea.

Educate Them

Another option that’s becoming popular with sponsorship seekers is to host a sponsor education session. You could run the workshop yourself, but it is often a stronger statement about your commitment to the sponsors and their results if you hire a good, well-credentialed sponsorship educator to lead the day. You can make it a straightforward workshop about theory, case studies, and maybe some group exercises, which would be typical.

Another option that we’ve increasingly seen (and done) is to hold a session where the facilitator introduces the theory of best-practice sponsorship and then takes the participants through the development of their leverage programs right there in the workshop. If you go with this option, encourage your sponsors to bring as many of their team as they can, as the process is based on a series of creative brainstorms and it’s faster and more effective if they work as a team. The bonus for the sponsors is that you’re basically increasing the overall skill level of their staff, and they’ll love you for it!

Encourage Sponsor Case Studies

Sponsors love to hear how other sponsors are doing, and if you’ve got some really creative, win-win-win sponsors, you should ask if you can share their case study with the other sponsors. You can do this in an email, a sponsor newsletter, or you can hold a sponsor function and ask a couple of sponsors to stand up and do 10-minute case studies.

What you will find is that you’ll have at least a couple of stalwart, old-school sponsors who will realize that all of that best-practice stuff you’ve been advocating isn’t just hoo-ha—it actually works! This can be one of your most effective options to get those sponsors turned around and using the sponsorship well.

Share Case Studies and Good Resources

If you’re taking our advice, you’ll be regularly reading blogs and publications, as well as searching ABI/Inform Full-Text Online. You’ll no doubt come across some case studies of sponsors doing great things with properties like yours. Share those case studies with relevant sponsors. You could say, “I was doing some research and came across a case study where an insurance company in Hong Kong took a really creative approach to their festival sponsorship. I thought you’d be interested, and if you’d like to talk about doing something similar, just let me know.”

You should also share good sponsorship resources when you find them. There might be a fantastic blog or online tutorial or white paper that will help your sponsors, and they will appreciate that you’re thinking about them all of the time.

Help the Sponsor to Integrate

This type of integration leverages the sponsor’s program by marrying the power of sponsorship to the myriad marketing vehicles that they already have in place. Although there are still costs associated with integration, the cost is generally lower than creating separate supporting programs from scratch.

The basic idea is that sponsorship is no longer supported by big, incremental leverage budgets. There was a “rule” that was routinely espoused—the one-to-one rule—that said for every dollar a sponsor spends on the sponsorship fee, they should spend another dollar leveraging. As sponsorship became more cluttered, that became the two-to-one rule, but common sense has prevailed.

Great sponsors have identified that sponsorship is a great way to make marketing money they’re already spending work harder. They use sponsorship as a catalyst to add relevance and meaning and passion to their existing marketing, making it more powerful and substantially reducing the amount they need to spend to leverage it. The best sponsors in the world only spend 10 to 25 percent of the sponsorship fee, incrementally, to leverage most of their sponsorships, and the starting place for that is integration.

The good news for you as the sponsee is that every time the sponsor promotes the sponsorship through their various marketing channels, they are also promoting your property. Encouraging this type of integration can greatly extend your marketing reach and has real commercial value to your organization.

               Integration has real commercial value to your organization.

Holding a leverage planning session, as outlined earlier, is an ideal way to facilitate integration. But, if you can’t convince the sponsor of the value of getting together for a leverage planning session, you can still help your sponsor get buy-in from their various business units. Work with your key contact to engender their participation through any or all of the following methods:

• Meet with business unit decision makers to determine their sponsorship needs and discuss how your organization can help them achieve those objectives.

• Provide decision makers with a written overview of the sponsorship benefits, target markets reached, and some ideas as to how they could leverage the sponsorship.

• Provide a couple of case studies of how other sponsors of your property (or even similar properties in other markets) have achieved tangible results in each of their areas of operation.

• Invite decision makers to your event so they get a feel for it and so you can start building a relationship.

• As business units do start using the sponsorship, keep other decision makers informed about how it’s going.

This can be done in a subtle or straightforward manner. You will need to work with your key contact to determine which method will get the best response within their company (Figure 12.1).

 

 

Leverage Options and Issues

We’ve provided a good road map to create leverage ideas, but there are a few leverage options that you and the sponsor may not think of, and some that need to be handled with particular care.

• Media promotion

• Sponsor cross-promotion

• Non-sponsor cross-promotion

• Retail promotion

• Internal promotion

The different types of promotions are defined below.

Media Promotion

Media promotion is when a sponsor develops a cross-promotion with one or more media organizations. This is very common and can be extremely powerful—the more creative the execution the better.

Sponsor Cross-Promotion

This is when two or more sponsors work together to create a promotion that achieves objectives for each of them.

As sponsors of the same property, they already have something in common. They are also probably interested in the same marketplace (or at least segments of the same marketplace). It makes perfect sense that sponsors can get together to create cross-promotions that support both sponsorships—saving both parties money while doubling the communication base.

Some sponsees go to great lengths to keep their sponsors apart, afraid that they will compare notes on benefits and costs. We do not recommend this strategy and, instead, recommend that you facilitate sponsor cooperation. After all, if your sponsorships work better, you are more likely to have happy, productive sponsors that you will retain year after year. Plus, if they wanted to talk, they don’t need your permission to do it.

               You should be proactive in getting your sponsors together.

Non-Sponsor Cross-Promotions

Cross-promoting with non-sponsors can provide a lot of freedom in selecting cross-promotional partners and, hence, excellent results can be gained. You must, however, be aware of some potential areas for conflict.

Cross-promotions can be used by non-sponsors as a means for ambushing their competition; for example, if the event sponsor, Gatorade, created a promotion with non-sponsor Reebok, when Nike is among the other event sponsors. The deal may be great and their intentions may be honorable, but you could be caught up in controversy. If you want to be seen as protecting your sponsors from ambush, you must ensure that no promotional partners are seen as competing, directly or indirectly, with your current sponsors.

 

 

Even if there isn’t a potential conflict involved, sponsees need to be careful about cross-promotions with non-sponsors. If you are not careful about limiting the benefits provided (through the sponsor) to their partner, you may end up with a situation where the non-sponsor is getting the benefits of sponsorship without paying a fee. Do two things: ensure your contract employs ample controls for passing on benefits to a partner; and be sure that the benefits delivered to your own organization through the cross-promotion are greater than the perceived loss. Media can also be a problem. If an event has an official media partner and one of your sponsors does a media promotion with a competitor, there are likely to be some noses out of joint, although that rarely stops it from happening.

               Warning: Non-sponsor cross-promotions can be very problematic.

Retail Cross-Promotion

Retail cross-promotion involves the sponsor’s retailers and/or distribution system and is often a key element in fully leveraged sponsorship programs. Retail cross-promotion can add weight to other sales promotional activities and can serve to communicate the marketing message powerfully at the point of purchase.

Although the above example deals with a very targeted customer group, retail sponsorship can work just as well with a wide variety of retail outlets, such as grocery stores, specialty retailers, or petrol stations.

On the side of the retailer, a powerful cross-promotion can serve to increase store traffic and sales, as well as to create a point of difference from the competition. In order to achieve this for the retailer, the sponsor must be willing to share perceived ownership of all or part of their sponsorship of your organization.

 

 

As the sponsee, a major retail promotion driven by one of your sponsors can be an extraordinarily effective way to communicate your marketing message. So if it is not conflicting with other paying sponsors, we wholeheartedly recommend that you are proactive on this point.

               We strongly recommend retail cross-promotions.

Staff Programs

As powerful as sponsorship can be for communicating with a sponsor’s customers, it can be just as powerful for communicating with their employees and shareholders. It can help them to increase their knowledge base, boost morale, increase productivity, or simply give something back to the people who make their company what it is.

Within a larger sponsorship portfolio, it is not above the realm of possibility that a sponsor could select a sponsorship specifically to achieve employee-based objectives.

When looking at promoting sponsorships internally, be sure to think about what is important to the sponsor’s employees. There are no hard-and-fast rules, but here are some suggestions:

• Merchandising, usually done to employees or shareholders at cost

• Employee perks (merchandise, tickets, celebrity appearances, etc.)

• Product knowledge programs

• Incentive programs

• Volunteer programs, creating fun ways for the sponsor’s employees to become materially involved in the sponsorship

• Contests for an employee to travel to a major event to be the company “representative’

• “Family day at . . .” where employees and their families go for free.

 

 

VIP Hospitality

Many sponsors have realized that standard VIP hospitality programs—skyboxes, tickets to the opera, etc.—are no longer cutting it. Their customers were receiving too many invitations from too many companies, and they were all virtually identical. Many sponsees have responded by developing much more creative hospitality opportunities that allow their sponsors to stand apart from the crowd and appeal to their customers in a far more personal way.

Work with your sponsors to determine who their key customers are and what will appeal to them. If they are family oriented, create something that lets them spend quality time with their kids. If they are young and sporty, create something that appeals to their sense of competition or adventure. If they are status oriented, create something that stands out as an exclusive, must-attend event. Whatever you do, try to encourage the sponsor to think outside the square and do something that has real meaning to their key customers.

Ambush Protection

No other aspect of sponsorship has received as much attention in recent years as ambush marketing. Ambush marketing is, very simply, when a non-sponsor undertakes activities that do one or both of the following:

• Create confusion in the marketplace as to who the rightful sponsor is. This is often accomplished through the creation of promotions that have the look and feel of the event, or use similar or leading words, without actually saying they are a sponsor. The result is that the non-sponsor receives much of the benefit of being a sponsor without paying the fee.

• Undermine a rightful sponsor. Even if a company does not engage in the more obvious type of ambush outlined above, they can still cause problems for a rightful sponsor. A classic example is the major football event that was sponsored by a brewer. A rival brewer paid a stripper a few hundred dollars to streak across the field at an appropriate moment. The result was that virtually every newspaper in the country ran a photo of the streaker instead of the game on the front page of the sports section.

 

 

There are two ways for a sponsor to be protected against ambush, and even then it can happen.

 

 

Legal

The main problem with preventing ambush marketing is that most of the time it is perfectly legal. The only time that it is not legal is if the ambushing company falsely represents that it is a sponsor, claims endorsement by the sponsee, or blatantly misleads the public into believing these things to be true.

The best way to protect your sponsors through legal channels is to ensure that ambush protection is written into the contract. This will demonstrate that you will not under any circumstances sell sponsorship, vending rights, or signage to any of the sponsor’s competitors and will compel you to protect their rights within the scope of any media or subcontractor deals. But this is still only a partial measure because most ambushes have nothing directly to do with the sponsee.

Strategic

The best ambush protection a sponsor can possibly have is to leverage their sponsorship fully. If they have created a strong program of support for their investment, any activities mounted by their competition will look weak and stupid by comparison.

If you want to assist the sponsor in checking their vulnerability, work closely with them to assess potential risk areas and assist in any way you can to minimize those risks.