CHAPTER 7
Proposals
We’ll now go back to our kitchen analogy. You have an inventory of all of your ingredients, the Sponsor Information Checklist has provided you with a recipe, your offer has provided a firm vision of the finished meal, so now it’s time to start cooking!
The Number One Job of a Proposal
Before you can start to structure a proposal that will sell, you need to understand and embrace the number one job it needs to do. That job is not to help you sell it to your contact—it’s for that contact to sell it internally.
Sponsorship is now so heavily integrated into different areas of a sponsor’s business that even if the brand manager is a huge fan and ready to say “yes,” he or she will still need to present the business case to colleagues for their sign-off before he or she can be assured it will be a success.
What to Include in a Proposal
In order to give the sponsor enough information to make a decision, a proposal must contain the following points.
Overview
Paint the picture, tantalize the sponsor with both what your organization is about and how you can benefit them. Be absolutely sure to include details about why your property is meaningful to your target markets—the passion your fans have for what you do, and the larger relevance to target markets that will interest the sponsor.
About [the Property]
This is really property FAQ, listing dates, times, locations, projected attendance, ticket costs, membership numbers, etc.—all the hard data. The information provided here could vary widely depending on the type of property. The idea is that you don’t want your potential sponsor getting three-quarters of the way through the proposal and not knowing when the event happens, when it’s launched, where you’re located, or other key pieces of information.
Target Markets
If a sponsor is going to consider your event, one of the first things they need to know is who you are targeting. Showcase your target market segments, using both psychographic and demographic information. Ideally, you will be able to support this section with comprehensive market research information, but even if you don’t have that (yet!), try to be as complete as you can be. You may want to consider including your “one person” target market descriptions (from Chapter 2). If they have helped you to understand your market segments, they may also help a potential sponsor.
You may want to keep the order of your segments flexible, so you can put the most important segments to your potential sponsor on top. Don’t ever use phrases such as “lovers of art,” “museum goers,” or “general audience.” These types of phrases are too general and indicate to sponsors that you know nothing about your audience.
You can address your target markets as a separate part of the proposal, or you can incorporate them in your marketing plan overview, outlined in the next section. We tend to favor keeping them separate.
Marketing Plan
This is an overview of the marketing plan you have already created. It outlines exactly how you will be marketing yourself to your target markets, the value, reach, and audience of all marketing components, which media you are using, and your publicity plan.
Creative Ideas for Leverage
This is where you get to strut your stuff and demonstrate your understanding of your potential sponsor’s needs.
Start by outlining the sponsor’s marketing objectives, as you understand them. Then, drop in the strongest ideas you and your team came up with in the offer brainstorm session, ensuring you mention how each of these ideas helps them achieve their objectives. There is nothing that will help sponsors say yes to a strong sponsorship opportunity more than that will.
There are some people who will say this is dangerous, that sponsors will steal your creative ideas and do them with someone else. Yes, that is a possibility, but it doesn’t really happen that often. Use confidentiality wording (we’ve provided later in this chapter) and include the ideas. In many cases, creative ideas for leverage will be the difference between yes and no.
Comprehensive List of Benefits
This is where you list the benefits that you will provide as part of this offer. These should be taken from your inventory and reflect a comprehensive package, but should never include everything in your inventory. Tailoring the list is absolutely essential.
Use bullet points and, depending upon how long the list is, you may want to categorize the benefits as they are categorized on your inventory.
Investment
This should reflect the total investment, including:
• Cash
• Contra or in-kind investment
• Promotional support that directly benefits your organization
You should also include payment due dates and any performance incentives in this section.
Bonuses
Your case for investment will be a lot stronger if you can provide the potential sponsor with a precedent as to exactly how this has worked for other companies like them and/or a precedent as to exactly how your other sponsors have achieved a commercial return (in other words, used their sponsorship to change the perceptions and behavior of their target markets). If you have this information, put it in a section before the “Comprehensive list of benefits.”
How Long Should It Be?
As a rough guideline, in order to get all of the information into the proposal that the sponsor will need, you are looking at a minimum of 7 to 10 pages. If you have a lot of leverage ideas, research, precedents, or a very comprehensive marketing plan, you could go up to about 12 pages or even a little more.
More important than size, however, is that it is easy and fast to read. This will be more a testament to your ability to format the proposal nicely and use concise wording than the actual amount of information included.
Deck Versus Document?
While there is a temptation to use the in-built features of PowerPoint to create a pretty presentation, a deck of slides just doesn’t have the scope to convey the amount of information a sponsor will need to sell the opportunity internally and make a decision. You are only going to be able to give them that in a well-formatted full proposal, most likely formatted in a word processing program. So, if you’re going to be sending the proposal, send them a full proposal, not a deck.
If you are going to do a stand-up presentation, create a great sponsorship proposal first—one that you will leave behind that is complete enough to make the whole business case without you being there. Then, using the full proposal as a guide, create a concise deck hitting the main points and talk to those points. Don’t try to wedge all of your proposal content into a deck for presentation. If your preparation is strong, you’ll be able to present with minimal wording on your presentation.
Once you’re done with the presentation, hand your contact three copies of the full proposal and either include a USB drive with an electronic copy or e-mail one later. That makes it easy to distribute to key colleagues.
To Tease or Not to Tease?
This is a really good question and a matter of style.
One school of thought is that you should have a two-page teaser—a summary of the property, target markets, key marketing strategies, and ways you’ve identified you “fit” with the sponsor. This, of course, assumes that they will be interested and you’ll get an opportunity to put your best foot forward with a full, and fully customized, proposal later.
Unfortunately, this isn’t always the case, and in recent years, sponsors have become even pickier. We have shifted away from that approach, in most cases, to one that favors an orientation toward sponsor needs and full customization from the start. Do your homework, ask the right questions, and make the first sponsorship document you commit to writing your very best effort. Don’t tease, wow.
Using the Sponsorship Proposal Template
We have included a Sponsorship Proposal Template later in this chapter for you to use as a guideline. Clearly, you will need to adapt this to your own property and style, but this should give you a good place to start. For best results, you may want to consider the following suggestions:
• You must include all of the information in the template in order for a sponsor to be able to make a decision.
• We prefer a proposal that starts each proposal section on its own page, keeping it easy and straightforward to read.
• Do not use an executive summary—your contact will tend to read that and not get to the meat of the proposal. Instead, use your cover letter to tell the contact very briefly what it is about and how it relates to them (see the Proposal Cover Letter in Chapter 8).
• If you already have other sponsors committed, highlight this in your cover letter. If at all possible, include existing audience research.
• A major selling point for sponsors is that research will be done during the course of the sponsorship and provided to the sponsor, including at least a couple of questions provided by the sponsor. The perceived value of this to the sponsor is much higher than it may cost you.
• Create a proposal with an eye for detail and presentation. The more professional it looks, the more credible you are. Use the magic that technology offers to its fullest potential—insert photos, maps, artwork, or whatever is appropriate into your proposal document and print it in color. Keep it professional and don’t go overboard, but do use technology to help you build the atmosphere and personality of your event within the proposal document.
• You can provide such items as brochures and calendars of events for review by the sponsor, but do not make the sponsor search for pertinent information in these documents. You also need to keep in mind that anything extra won’t tend to travel around to other sponsor stakeholders with the proposal. If it is important (such as key dates or locations), it must be included in the proposal itself, ideally in the event details section.
• In this day and age, many proposals are submitted in PDF form via email or an online submission mechanism. There is no reason you can’t include supporting artwork or other documents—either as an attachment or to dress up the proposal itself (they can click on small artwork to see it bigger). If you are submitting it in hard copy, either comb bind your proposal or neatly staple it and enclose it in a presentation folder.
• Do not send a video or other multimedia with your proposal. It wastes money, and sponsors almost never look at them. If you are invited to make a presentation, you may have a video loaded into your laptop to show only if requested. If they don’t request that, you could offer to email a link to it if they want it for further review. Our insider tip: most won’t.
Confidentiality
Unfortunately, we have all heard of cases where a sponsee went to a company with a great idea for an event but was turned down, only to see their idea implemented directly by the company a few months or a year later. In truth this is uncommon, but is more common if you are asked to submit the proposal through an agency. In any case, it does make sense to protect your ideas.
If the proposal includes any of your creative ideas, it should include a legal statement that all concepts included are your property. A sample can be found below. This should be placed before the body of your proposal, such as at the bottom of your title page.
© Copyright [organization name] 2015. This publication is copyrighted and remains the intellectual property of [organization]. No part of it may be reproduced by any means without the prior written permission of [organization].
Depending upon the confidentiality of it, you may also want to include this wording:
The information contained in this proposal is confidential, and no part of it may be copied and/or disclosed to any person without the express permission of [organization].
Pricing
While developing your sponsorship proposal, you also need to address pricing. This is no doubt the most vexing area of creating a proposal, and, unfortunately, we cannot offer any hard-and-fast rules. We can, however, offer a few strategies that should help.
First and foremost, the total fee must be less expensive than if the sponsor were to run the event on their own. The overall package must represent value for money.
No matter what, never tell the potential sponsor how you are going to spend the money! This undermines your value and indicates your need rather than your worth. It also undermines the perception that you are a professional, viable organization whether they participate or not. It is not unusual for a sponsor to request a breakdown of marketing and promotional expenditure.
It used to be that you could use equivalent advertising costs as a benchmark, but the sophistication of most sponsors has grown to such a point that they identify that sponsorship is a unique marketing medium, offering a degree of relevance and connection with people that precludes any direct comparison of costs. Unfortunately, that just makes pricing more difficult. There are no hard-and-fast rules, but we do have some guidelines that should help you get there.
Calculating Your Baseline Fee
When calculating your price, you must firstly understand that a significant chunk of the sponsorship fee will go toward providing the promised benefits, as well as paying for the sale, servicing, and administration of the sponsorship. The difference between those costs and the fee is your profit—the amount that you will actually be able to put toward increasing your revenue base.
Once you have calculated the total cost of providing the sponsorship, you need to add in your profit. Your profit is the money you get to use as income to underwrite an event or program, or simply to add to your bottom line. As a rough guideline, your baseline fee will be two to three times your total cost, for a profit of 100 to 200 percent against your costs.
Total cost to deliver the program × 3 = Baseline fee
Total cost to deliver the program × 2 = Red line fee
Once you know your baseline fee, you need to stack it up against market indicators. These indicators could show that you are in the right ballpark or, more likely, they could show that you are significantly under- or overpriced. If your baseline fee is overpriced against the market, you will have to readdress the benefits package and/or how it is delivered to ensure that it provides adequate income for your event. There is no use going to all the trouble to sell and service a sponsorship if it’s not providing you with any benefit, or worse, if it costs you more to provide the sponsorship than you charge for the package.
Determining Market Price
Once you have determined your baseline fee, you need to adjust it to reflect the marketplace in which you operate. Ask yourself the following questions.
• What is the cost of similar sponsorship products on the market? Corporate sponsorship managers talk to each other and know the price of similar sponsorship packages. You need to have that same understanding.
• How does your product stand up? If similar events are offering the standard “tickets and logo exposure” package and you are offering a creative and multifaceted marketing opportunity, then you can promote your offer as having a much higher value.
• How does your sponsorship servicing measure up? If you are constantly willing to go the extra mile to make a sponsorship work, then you will be consistently adding value to the package and your current sponsors are likely to vouch for you.
• Are there any other variables that might affect your price? What if your team wins the national championships? What if you lose your star player?
• How much is your potential sponsor likely to invest? Precedent is not always a reliable indicator, but if you know a sponsor has never invested more than $20,000 in your organization and you are suddenly approaching them with a package valued at more than $100,000, you need to understand that you will probably encounter some resistance. You will need to build a strong case for that level of investment, as well as possibly being prepared to negotiate for a lower level of benefits.
• No sponsorship proposal should be valued solely on what you need to make the project work.
These questions should get you pretty close to the market value of your event. In order to double-check yourself, you should do the following:
• Pay attention to the marketplace—read sponsorship publications, join a sponsorship or marketing association, extend your network.
• Use your network—we know people who won’t send out a proposal without running it past three trusted colleagues first.
Multiyear Agreements
It is almost always better to go for a multiyear agreement than for a single year. It gives you some steady income and peace of mind, and it gives the sponsor time to really maximize their leverage and results.
When structuring a multiyear agreement, keep in mind the following things:
• If your event is new and will likely grow bigger and more valuable as time goes on, you should structure your fees to reflect larger payments in later years.
• If your event has a long track record of delivering the goods, you may elect a flat payment structure.
• If your event is new and you have one key sponsor who is the “perceived owner” of the event, you may be able to get a larger fee in the first year to assist in underwriting the infrastructure, but this will come at a dramatic cost in future years.
What If the Adjusted Fee Is Too Low?
If you’ve done all of your calculations and used your network and research to determine the fair market value, and the realistic fee is nearing your red-zone number (200 percent of costs), you have a number of options for structuring the fee to make it work for you.
Multiyear Discounts
You could offer them a multiyear deal. With costs of $10,000, a sponsorship fee of $22,000 may not look very appealing for one year, but if you can make it $22,000 a year for a three-year contract, or $22,000, $24,000, $26,000 across a three-year contract, it may seem like a much better option.
Proactively Offer Incentive-Based Fees
We are strongly in favor of fee structures that incorporate a component that is performance based. This creates an incentive for the sponsee to deliver as promised—to go that extra mile—and sponsors see this as a refreshing departure from sponsees that take the money and run.
It also means that you could make more money on the sponsorship because you are lowering the risk to the sponsor (and let’s face it, some sponsors still think sponsorship is a risk!). The key is to tie the performance-based component to specific, quantifiable, and desirable outcomes.
Instead of charging $10,000 cash for a sponsorship from a carmaker, you could do this:
• $8,000 up-front payment
• $2,000 if more than 60 attendees test drive their car
• $2,000 if they get more than 200 qualified prospects onto their database
This gives you a total of $12,000, reduces the perceived risk to the sponsor, and shows that you are absolutely confident that you will produce results. Of course, if you are not confident of producing results, do not do it. In fact, if you are not confident of producing results, get out of sponsorship!
One thing to note: When incentive-based fees are mentioned to sponsors, they will often immediately want to negotiate an incentive based upon sales. Whatever you do, don’t agree to a sales-based incentive.
You can provide a lot of the ingredients to making a sale, including:
• Promoting the product
• Enhancing the product’s image
• Providing opportunities for sales (e.g., on-site sales or sales to your members)
• Product demonstrations
• Relationship-building opportunities
What you can’t deliver are actual sales, as these will be largely based upon the quality and value inherent in the product. For instance, a soft-drink manufacturer may be the exclusive vendor at your summer event, but if a malfunction occurs and the drinks are warm and flat, or if they price it above market value, they won’t hit their sales projections no matter how many people you get through your gate. You should not be held accountable for that.
It is far better to negotiate an incentive based upon how many people come to your event and leave delivering the right product at the right price to your sponsor.
Contra Sponsorship
Contra sponsorship occurs when a sponsor pays for their sponsorship with products or services instead of cash. Also known as barter, trade, or in-kind sponsorship, contra sponsorship makes up at least a portion of a large number of sponsorships.
When negotiating for contra sponsorship, keep three things in mind.
1. Contra sponsorship is only of value to you if:
a. You have budgeted for the specific item already. In that case, it is only worth as much as it is saving you in cash expenditure. For example, if a company offers to loan you $10,000 in new computer equipment when your planned expenditure was only $2,000 in lease payments, the offer is only worth $2,000 to you.
b. It adds value to your other sponsorship packages. For instance, if you secure a radio sponsor, you could include airtime in your other sponsorship packages, making them more attractive for other potential sponsors.
2. If the contra sponsor is saving you cash, they are as valuable to you as a fully cash sponsor and they need to be serviced as a cash sponsor (see Part 3).
3. You still need money to run your event or property, so endeavor to negotiate sponsorships where contra sponsorship is only a component of the investment.
When you look at the contra option, don’t unnecessarily limit yourself. Most people think only of a sponsored product such as an airline providing free travel, a high-technology company providing computers, etc.
The fact is that sponsors have access to dozens of opportunities and services that can save you a lot of money. What follows is a generic sponsor contra list. This is a great tool to use when negotiating with a sponsor, particularly one that is baulking at making the full investment in cash.
• Media promotion
• Promotion of sponsee through retailers
• Promotion of property on pack
• Promotion in internal employee communication
• Promotion to customers (social media, mailings, magazine, newsletter, website, database, etc.)
• Property signage on sponsor building
Media
• Access to heavily discounted media rates through sponsor’s media buyer
• Tags on existing advertising
• New advertisements profiling property
• Providing a limited media schedule (probably shared with sponsor)
Creativity
• Creative work for the property done by sponsor’s advertising agency or in-house graphic department
People
• Provision of sponsor-contracted celebrity for property endorsement or appearances
• Donation of employee for fixed-term assignment (full- or part-time for set number of weeks/months)
• Employee volunteers to augment on-site staff
• Access to in-house experts and subcontractors (social media, public relations, printing, media planning, database development, web development, SEO, etc.)
Travel
• Access to discounted airline or hotel deals
• Contra travel or hotel (if sponsor is in the travel business)
Infrastructure
• Office space
• Office equipment or services
• Event equipment or services
Other Contra Products or Services
• For use as prizes, incentives, or giveaways
• To add value to other sponsorship packages
Equivalent Opportunity Cost
When calculating your price you also need to understand what you are competing against in terms of media—the “equivalent opportunity cost,” as media buyers put it. This is particularly the case if you are approaching a brand manager, as they will likely have to reallocate money from some other media to your sponsorship if they commit.
If you are seeking money for a sponsorship, you need to understand how a sponsor could spend this money. You need to understand that you are not only competing with other sponsorship seekers but you are also competing with the main media, endorsements, and sales promotions.
Questions you need to ask to determine how else a sponsor could be spending their money include
• How many television commercials could they buy in peak viewing with that investment?
• How many black and white pages in metropolitan daily newspapers?
• How many color pages in mainstream or targeted magazines?
• How many weeks of 30-second spots, at a rate of 30 per week, on metropolitan radio?
• How many billboards?
You should be able to get these costs from your advertising agency or media placement company. If you don’t have either of these, you will need to secure price lists (which can often be found online) from key media throughout your marketplace and make an educated estimate.
If your event or program is national in scope, get national figures. If it is limited to one city or region, then get figures specific to that region. And remember to use figures that are representative of the discounts given to large advertisers, not casual rates, which will be much higher.
In addition to giving you an understanding of your competitive position, knowing what a sponsor could get for their investment can really help you during the sales process, particularly if your event or program offers strong benefits over time.
Imagine being able to make a case for your highly targeted, strongly matched two-month event, offering a whole range of benefits to meet the sponsor’s objectives versus them placing five advertisements during 60 Minutes. Used judiciously, this can be a very powerful argument, but you must be absolutely confident in the value of your offer.
Proposal Issues
There are a number of issues that come up over and over again around the creation and presentation of sponsorship proposals. We have addressed some of the most common ones here.
Should We Offer Different Sponsorship Levels?
A lot of sponsorship seekers offer levels to their potential sponsors—gold, silver, and bronze levels are very popular (and overused to the point of being a cliché). The main problem with this approach is that, without realizing it, most sponsees formulate the packages so that all of the levels get access to the best benefits, with the main difference being that the lower levels get fewer of the same things.
Clearly, this is not an approach that is conducive to creating strong, high-level sponsorships. It undermines the true value of the relationship, creating instead a bargain hunter’s paradise.
At the same time, some sponsors like options. So, if a sponsor specifically asks for options, the trick is working out how to offer sponsors a choice without undermining your value and potential revenue. We have identified two good ways around this: “The apple and orange approach” and “The up-selling approach.”
The Apple and Orange Approach
This approach revolves around the strategy of offering two packages that are completely different from each other, each emphasizing a differing set of sponsor objectives. You don’t want the potential sponsor to be able to compare them on a benefit-for-benefit basis, so you create an apple and an orange. Ideally, the packages should be priced similarly, but even if they aren’t, this strategy can work very well.
This is very different from the “levels” strategy of offering three different-sized apples. If all the potential sponsor wants is an apple, they will almost certainly take the smallest, cheapest one.
The following is a very generalized example of two packages that a basketball team could offer to a potential confectionery sponsor—same sponsee, same sponsor, but very different outcomes.
Offer 1: Emphasis on VIP Hospitality
• Use of private box (seating 12) for eight featured games
• Autographed team merchandise for all sponsor guests
• Postgame player meet-and-greets in the box for each game (one or two players, as available), as well as team mascot
• VIP clinic with the team for kids and grandkids of the sponsor’s key customers
• Inclusion of VIPs’ children in halftime activities (as appropriate)
• Thirty pairs of premium tickets to other games
• VIP tickets and travel for six to an all-star game
Offer 2: Emphasis on New Product Launch
• Naming rights to a feature game
• Media launch for new product at the game
• Exit sampling of new product for all attendees of launch game
• Content for sponsor to create an app around the new product
• Exclusive content for use in the new product’s social media activities
• Endorsement of new product
• Naming rights to team mascot
• Attendance at launch by coach and mascot
• Halftime on-court product launch stunt and interactive audience contest
• Use of hospitality room for VIP guests at featured game (seating 50)
The Up-Selling Approach
Another strategy that we favor is offering one highly tailored package, with an optional upgrade available at extra cost. Our experience is that, in a high percentage of cases, once the potential sponsor is sold on the concept of a partnership with a sponsee, they look at the upgrade as an opportunity to maximize the sponsorship and take it up.
Do remember to go through the pricing exercise for both the offer and the upgrade to ensure that you are covering all of your costs.
Following is an example of the offer and upgrade prepared by the same basketball team to the same confectionery company potential sponsor.
Sponsorship Offer
• Naming rights to a feature game
• Media launch for new product at the game
• Content for sponsor to create an app around the new product
• Exclusive content for use in the new product’s social media activities
• Endorsement of new product
• Naming rights to team mascot
• Attendance at launch by coach and mascot
• Halftime on-court product launch stunt and audience contest
• Exit sampling of new product for all attendees of launch game
• Use of hospitality room for VIP guests at featured game (seating 50)
• Postgame player meet-and-greet in the hospitality room (one or two players, as available), as well as team mascot
• Consumer raffle boxes located around venue
• Twenty-four pairs of reserved seat tickets to future games for use in consumer raffles
Optional VIP Hospitality Upgrade
• Use of private box (seating 12) for six additional featured games
• Inclusion of VIPs’ children in halftime activities (as appropriate)
• VIP clinic with the team for kids and grandkids of the sponsor’s key customers
• VIP tickets and travel for six to an all-star game
How Do We Define Category Exclusivity?
The only rule of exclusivity is: the more exclusivity is granted, the more valuable it is.
There are three types of exclusivity:
• Sponsorship
• Signage (in cases where the venue may have existing, conflicting signage)
• Sales
Most exclusivity is granted on the basis of categories, which is often referred to in proposals and contracts as “category exclusivity.” This usually refers to the category of business that a company is in, for example, airline, carbonated soft drink, ice cream, beer. You can make this exclusivity more valuable and attractive to your sponsor by extending across competitive categories.
An example of this would be to grant Pepsi sponsorship and sales exclusivity across categories such as carbonated soft drinks (their true category), noncarbonated soft drinks, sports drinks, fruit juices, fruit and iced-tea based drinks, flavored milk, and water.
When preparing an offer, you need to balance the degree of exclusivity you offer the sponsor with the financial impact on your organization. If you granted Pepsi the exclusivity outlined above, you will surely get more money from them for the sponsorship, but it also cuts out a lot of other potential sponsors and the revenue they could bring in.
On the other hand, if you are having a hard time selling a category, you could consider breaking it into smaller, more affordable chunks. For instance, you could divide the IT category into hardware, software, ISP, and peripheral categories. Way back in 1996, the Atlanta Olympics famously broke up the automotive category after being unsuccessful in selling it to one manufacturer, and sold separate sponsorships in categories including “official pickup truck” and “official luxury car.” This can be effective, but it can also be confusing, so you will need to work closely with sponsors in similar categories to ensure that they either work together (as IT sponsors often do) or stay well out of each other’s way.
Do We Need a Glossy Sales Brochure or Video?
Unfortunately, when it comes to selling sponsorship, a lot of sponsees rely on flash over substance. They produce glossy sales brochures outlining the sponsorship packages (often laid out in levels). While these brochures are often beautifully prepared, they lack what sponsors want most—customization.
Rather than going to the effort and expense of creating slick sales materials, put that effort into researching your potential sponsors and creating highly customized proposals. Every one of the sponsors we have polled has supported this contention. Your proposal should be neat and professional—do put it on letterhead and bind it or present it as a tidy PDF. That is all the sponsor expects from the presentation.
What is useful to sponsors is providing examples of some of your event promotional materials from previous years, if you have them. If not, you could include one or two mock-ups of the planned materials for the current event. This will showcase the style and degree of professionalism that your organization has, as well as add color to the presentation.
Do you need a video? In a word, no. Sponsors never watch them, and if you bring one along with you to your meeting, you are burning your short window with the sponsor showing them something that is inherently uncustomized, and they know full well it has been edited to show you in the most flattering possible light. A well-planned and enthusiastic verbal presentation will give you a lot more mileage.
Photographs and diagrams are a different story. If your event is extremely visual, such as an art exhibition, photographs are a must. If your event is an expo of some type, a map or other diagram will give the sponsor an opportunity to understand your vision and their place in it. Include these things right in your proposal document.
Should We Go to One Company at a Time, or Can We Go to Several?
In a perfect world, you would only go to one company in any given product category at a time. But, as you have already gathered from reading this book, creating relationships takes time. You are highly unlikely to have enough lead time before your event to research, approach, and negotiate your sponsorships using this approach.
In reality, it is perfectly all right to have several offers out at one time. If you have done your background research, this should not exceed 10 or 12 companies, and the offers will most likely be very different from each other, reflecting the different needs of the various companies.
How Much Lead Time Does a Potential Sponsor Need?
Most sponsors set their larger sponsorship expenditures as part of their marketing budget, 12 to 18 months before the events. They will often have an additional amount of money set aside for opportunistic spending if something else comes up. This amount is usually, but not always, fairly limited and will not accommodate major sponsorships. Only if something really extraordinary comes along will they breach this plan.
In addition, companies need time to maximize sponsorships. Usually, the more product lines, customer types, distribution channels, and so on they have, the longer it will take them to make the most of their sponsorships. This should be as important to you as it is to them because a happy sponsor is a good sponsor.
It is imperative that you ask the question about lead times when doing your background research on potential sponsors. Only then will you know for sure what their policy is. As a very rough guideline, we have found the following time frames to be common across a lot of companies.
12–24 months
• Major sponsorships of mega events
• Multinational sponsorships requiring buy-in from across an organization
• Multiyear events
• Most sponsorships come under this time frame.
6–9 months
• If you go below 9 months, you should still have some success at creating major sponsorship relationships, but you need to ensure that the leverage ideas included in your offer can be implemented between their yes and your launch.
4–6 months
• In this territory, you may have some success mainly with medium to smaller sponsors. You will probably start having to undercut the value of the sponsorship because the sponsor won’t have time to maximize the program fully. You will also start running into budget problems and may have to get creative with pricing and payments.
• If you are looking for a smaller investment (under $100,000 or so), you can often have success without undercutting your value right down to four months.
• If you have missed the budgeting time frame, you will probably be accessing a limited pool of opportunistic funds. This is another reason going to the brand manager—who holds that type of budget and authority—is much better than approaching a sponsorship manager.
Under 4 months
• These investments are reserved for surprise or unanticipated events.
• Unanticipated events are events such as a major sporting team winning the championship. Around that one unanticipated event, a wide range of other sponsorable events could crop up. These are the only type of events that we recommend sponsors should consider with less than four months’ lead time.
• If you are trying to sell sponsorship for a planned event with less than four months’ lead time, you are extremely unlikely to be successful. Not only do you hit obstacles such as the sponsor not having enough time to maximize the sponsorship or the budget already being set, but it also smacks of desperation and could undermine your credibility as a strong and highly sponsorable organization for years.
When Is the Best Time to Approach Sponsors?
The answer to this is tied to the amount of sponsorship you’re seeking. If you are looking for a moderate amount of sponsorship—a maximum of $100,000 to $250,000, depending on the size of their overall marketing budget—you can seek sponsorship anytime, as they probably have enough “play” in their budget to accommodate a great idea like yours.
If you’re looking for more money, the best time to approach a potential sponsor is before they have set the marketing budget for the year in which your event or organization is seeking sponsorship. It is as simple as that. Again, you need to ask the question of the potential sponsor when you are doing your preliminary research—well before providing them with a proposal.
There is one timing long shot that you can try, however. If you have a smaller sponsorship on offer, you may want to approach a potential sponsor within six to eight weeks of the end of the financial year. If they have any unspent funds in their sponsorship budget for that year, you may be able to access them. Extra funds are usually a result of the above-mentioned opportunistic budget not being fully utilized over the course of the year.
Sponsorship Proposal Template
Use your own judgment when doing the title page, but do show the sponsor name and your name together using the word “and.” If you are selling the naming rights or presenting sponsorship (e.g., The Toronto International Fishing Expo presented by Great North Airways), show the name of the event as it would be if they took up the sponsorship.
Always date your proposal, and always put it on a professional letterhead.
Use this page to set the stage. You can use a relevant quote—funny, inspirational, or something that just says it all. Your challenge is to really get to the core of what your property is about—the beauty of flowers, the spirit of competition, the dignity of the underprivileged. There are lots of good quote sites on the Internet.
Another option is one arresting statistic. Or if your event is very visual, an image of something relatively simple—one flower, a pair of dancers—can be very powerful on its own or with a quote or statistic.
Give a good overview of what your property is about and how being involved will benefit the sponsor. At this point in the proposal, your appeal is basically emotional. You want your target to be able to visualize the event and how its involvement will look and feel. Use emotional wording—a lot of strong adjectives (use a thesaurus).
Also very important is to describe what your property means to your target markets—why they care, the depth of their passion. Sponsors know that it is more powerful to connect with fewer passionate fans than to be in front of millions of disinterested onlookers.
As a general rule, two-thirds of this page should be devoted to visualizing the event, and the remainder to visualizing the sponsorship.
This is where you list the hard information about your property. Be straightforward and completely unemotional. This will not only answer a lot of questions your target sponsor may have, but is also your opportunity to show how organized you are.
If the sponsor’s primary target market is your secondary or tertiary target market, be sure to emphasize the marketplace(s) that are most relevant to them.
This is where you list the hard information about the event. Be straightforward and completely unemotional. This will not only answer a lot of questions your target sponsor may have, but is also your opportunity to show how organized you are.
Overview your marketing plan, emphasizing the most important elements. Be sure to note what is and is not confirmed. Do not mislead your sponsors.
If hospitality is a major factor in the package, outline all hospitality opportunities here. If it is a minor factor, move this back toward the benefits section.
If on-site sales, preferred vending status, or product demonstration is a big factor, you will also want to include a section on sales, vending, and display in this area of your proposal.
We have only provided a sampling of the benefits that might go along with this package—ideally, this list should be at least a couple of pages long. Use your inventory and create a comprehensive list of real benefits. Depending upon how long the list is, you may want to categorize the benefits (like the inventory).
A hint to all of you—logo exposure is only a small fraction of a good benefits package.
This package must, must, must be customized to your sponsor’s needs.
Outline how much this is going to cost in cash and contra. Be sure to include a proposed payment schedule. We also like to include a minimum promotional commitment, ensuring that they embark upon at least some activities to maximize the sponsorship and that they are activities that will benefit you, the sponsorship seeker, as well.
One note on pricing; if your country has a goods and services tax or VAT, you need to indicate if that is included in the price or needs to be added on. Generally, sponsorship fees are quoted without GST or VAT.