Sponsorship and Event Profitability

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Sponsorship and Event Profitability

• Dr Stephen Dann
• Sparten RD

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To make an event profitable

• Earn more than it costs to run the event
• Two income streams
• Sponsors
• Increase perceived value of being involved so
  they are willing to pay higher rates
• Participants
• Increasing volume of participation not cost of
  attendance

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Costing less than you earn

• Key Business Considerations
• Calculate break even
• Can the Event be cancelled?
• When do you have to make break even to ensure the
  event will go ahead?
• If the event cant be cancelled, what alternative
  revenue stream has been set aside to cover the
  shortfall?

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Financial Factors

• Costs
• Knowing fixed costs (event costs)
• Knowing fixed income (sponsorship)
• Assess previous events variable costs
• Assess previous events variable income
• Calculate case scenarios
• Worst case scenario
• Realistic revenue
• Better than Usual Case

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Sponsorship revenue should cover

• Cost of servicing the sponsorship
• Insurance
• Sound system
• Venue hire
• Printing
• Overheads
• Advertising
• Any fixed event costs

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Sponsorship Breakeven

• (Sponsorship Revenue) - (Fixed Event Cost)
  (Buffer to handle variable costs)
• If the sponsorship handles the fixed costs, then
  the event is less vulnerable to the variables of
  the event days

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Lock in

• Non-refundable pricing
• Pre Sell Non Refundable Tickets
• If they dont show up, its not your
  responsibility
• Offer Early Bird registrations

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Different Needs

• Sponsors
• Financial gain
• Access to markets
• Goodwill
• Sales
• Etc

• Participants
• Good day out

Both want value for money
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Managing the Event for Sponsors
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Managing the Whole of the Event

• Manage the sponsors
• Business relationship
• Non attendee sponsorship
• Pre-event
• Manage the pre-event expectations
• Explain the event
• Show the event from previous year

• Manage the Event Day
• Managing the people on the day
• Controlling the event day
• Event Day Hospitality
• Have a place for the sponsors to be treated as
  VIP
• Sponsor Host to look after the sponsors

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Case

• Local bakery offers 500 in cash and 200 of buns
  and bread rolls
• Local bakery wont be attending due to work
  commitments
• How do you show at least 700 of value from the
  event day to the baker?

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Options

1. Photographs as Proof
2. The product in context
3. The signage
4. People using the product
5. People eating the product
6. Discount Coupon Sponsorships
7. Trade 50 of event day buns for 50 of Buy one,
   get one free coupons
8. Give the coupons to the people who eat the event
   day buns
9. Measures how many people went to the baker after
   sampling the product, brings in more business.
   May not actual cost 50

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Mandatory Options

• Standard Pre Event Day
• Sponsor logos on website, flyers, brochures
• Standard Event Day
• programs, maps, any printed material
• Be sponsored by a printing company
• Double side photocopy
• main information and key sponsor on the front
• Every other sponsor on the back, including
  coupons and vouchers

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Mandatory Options II

• Say Thank You
• Before the event
• During the event
• After the event
• Send them a Christmas Card

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Options

• Post Event
• Follow up quickly
• Thank the sponsor in writing for their support
• Provide the physical evidence of photographs as
  close to the event date.
• Thank the sponsor again in person / on the phone
• Ensure event staff and club delegates use the
  coupons as far as possible

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Practical Issues
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Practical Keys to Success

• Trust and Transparency
• The Business Relationship
• What does it cost to deliver the sponsorship?
• Pre-emptive Crisis Management Strategy

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Trust and Transparency

• If transparency is the word of the day for both
  government and corporations, then trust is the
  word that defines the relationship between a
  corporation and an event. Its a partnership in
  every sense of the word.

The essence of profitable corporate sponsorship
http//www.prcanada.ca/WHATIF/ESSENCET.HTM
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Transparency in Event Sponsorship

• Promise what you can deliver
• Separate business investments from charitable
  donations
• Have clear record keeping

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Promise what you can deliver

• Prove your offering
• Ensure the offer is
• Specific, Measurable and Realistic
• It makes it easier for you to know youve met the
  sponsors arrangement

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Organisational Commitment
Sponsorship Duration
Renewal Option? Yes / No / Not Specified Yes / No / Not Specified Yes / No / Not Specified
Base Financial Commitment Specified Amount Yes / No
Base Financial Commitment Negotiable Range Yes / No
Base Financial Commitment Price on Application Yes / No n/a
Sponsorship Property Characteristics Sponsorship Property Characteristics Sponsorship Property Characteristics Sponsorship Property Characteristics
Type of Property
Exclusivity Yes / No Yes / No Yes / No
Benefit Types Fully Negotiable Fully Negotiable Yes / No
Benefit Types Partnership with Organisation Partnership with Organisation Yes / No
Benefit Types Preset Specified Benefits Preset Specified Benefits Yes / No
Specified Benefits (if any)
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Television Television Yes / No
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Print Print Yes / No
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Radio Radio Yes / No
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Match Day / Venue Match Day / Venue Yes / No
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Corporate Website Corporate Website Yes / No
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Annual Report Annual Report Yes / No
Anticipated Exposure This is an estimation of the likely types of exposure each property may receive over the life of the sponsorship, and is not a guarantee. Other Club Exposure Other Club Exposure Yes / No
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The Business relationship

• The key is to work with the corporation to
  satisfy the key sponsorship objectives
• To enhance image
• To sell products or services directly
• To reach specifically targeted market segments
• To be involved in corporate community development
  and community service
• To obtain positive media exposure
• To enhance customer and VIP relations
• To contribute to community economic development

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Business or Charity?

• Business
• Sponsorship is an investment
• Outcomes
• Return on investment
• Extension of corporate communication
• Measurable gain

• Charity
• Sponsorship is done for altruistic purposes
• Outcomes
• Feeling good
• Giving back to the sport/event/community
• Event success

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Business of Sponsorship

• Your event is a business
• Sponsorship is a business transaction
• Your role
• Give value to the sponsor
• Work with the sponsor to deliver an outcome
• Manage the sponsors expectation

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Have clear record keeping

• Know how much was brought in on sponsorship in
  cash and in kind
• Know how much was spent servicing the sponsorship
• Ensure you know where the sponsors in kind goods
  are, and where they will be used on the event day.

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What does it cost to deliver the sponsorship?

• Make it clear who pays the costs involved in the
  sponsorship
• Event Signage
• Do you pay for it to be painted, or does the
  sponsor?
• Or do you get a signage company as sponsor?

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Pre-emptive Crisis Management Strategy

• What if something goes wrong?
• More importantly, how will you manage when
  something goes wrong?
• Defending sponsorships from criticism
• Dealing with sponsors who dont want to be
  associated with you any more

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Best Pre-emptive Strategy

• Have a good working relationship with the
  sponsor, and have clear benefits for their
  ongoing involvement in your event and organisation

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In it for the long haul
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Extending the Relations

• Transactions
• One time, short term, single event
• Relationships
• More than one time
• Ongoing series of transactions that intentionally
  build up over time

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• Transactions
• Discount hire of sound system in exchange for
  signage on the speakers
• Relationships
• Multiple year sponsorships
• Collaborative ventures and promotions which
  extend outside of the event time
• Longer the relationship, the cheaper each
  transaction becomes

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Deliverable Properties

• Ongoing Joint benefits
• Offering an opportunity cost (eg riding lessons)
  in exchange for sponsorship of the event
• Prizes that involve participation in the
  organisations non-event day activity
• Event and organisation information at the
  sponsors business outside of the lead up to an
  event

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Questions?