Expert who ‘speaks sponsorship’ vital to brands new to the game
Most of us move to a new city at some point in life. It’s an event we normally don’t take on alone. Instead, we seek advice from experts such as real estate agents, moving companies, friends, and friends of friends. Corporations even hire relocation companies.
We need people who can help us learn about the uniqueness of the new area, understand home and rental pricing, know the neighborhoods that will best fit our desired lifestyle, or simply help us protect and store our furniture in the move.
It’s knowledge and guidance that saves us time and money and keeps us from making a costly error. In some situations, it protects us from ourselves.
In the absence of this type of assistance, there is generally more risk — so it’s logical to get help, and it’s not unreasonable to pay for it. In the long run, it almost always pays for itself.
But for some reason, this same logic often doesn’t transfer to brands that decide to “move” into sponsorships. Over my career, I’ve seen too many brands, most with little or no experience in sponsorships, decide to negotiate their own deal(s).
Given the majority of big brands in today’s sponsorship industry depend on an agency or highly experienced employee to negotiate sponsorship deals, it’s puzzling why brands that are new to sponsorships choose not to invest in this expert assistance. The end result is predictable for those who don’t leverage this specialized knowledge. It usually runs something like, “We’re not renewing the sponsorship because we just didn’t see a benefit or return.”
There are five key reasons brands moving into sponsorships should engage a consultant or agency to negotiate a new deal and avoid the above end result:
1. It’s advantageous to have someone who “speaks sponsorship”: The industry has a unique nomenclature, with terms such as exclusivity, rights fees and rights to marks. Although they have fairly straightforward definitions, the dynamics of how these elements interact can significantly affect price. Having an expert who understands these terms and their effects is critical to saving money and achieving sponsorship success.
2. Sponsorship deals are complex: Media, events, Web, social media, mobile, branded content, CRM, hospitality, etc. … Sponsorships are years beyond providing primarily brand impressions. It’s now about fan engagement and experience. Expert guidance is critical to understanding which negotiable assets are most valuable in creating an integrated approach that enhances the fan’s experience.
3. It’s critical to know the right question(s) to ask: Less-than-fully informed buyers rarely negotiate the best deal possible. Just ask anyone in sales. No amount of research or reading can compensate for simply knowing the right question to ask at the right time in a sponsorship negotiation. Knowing where there is flexibility in negotiating assets is an ability that comes with sponsorship experience and usually translates to cost savings or added value.
4. It’s about maximizing value and cost: This is a challenging issue to prove, but I’m confident that many sponsorship industry vets, including myself, would tell you that not using expert advice to negotiate a sponsorship deal can cost you as much as 10 percent to 15 percent in price and value, possibly more. That’s not to suggest that properties take advantage of brands new to sponsorship. It’s simply an estimate as to the value that sponsorship knowledge can represent in a negotiation.
5. It’s about achieving a positive return: Successful sponsorships depend on an optimal mix of negotiated sponsorship assets, which fuel positive results against brand objectives. The key word is “optimal.” Sponsorships are not a “one size fits all” tool. Expert advice helps you determine critical versus expendable assets in creating a customized, optimal deal that’s specific to your brand and leads to a positive return.
So, if you’re moving into sponsorships, I highly recommend teaming up with a sponsorship expert. It’s a smart way to protect yourself from unknown risk(s).
Come to think of it, it’s the same reason I use bubble wrap when I move.
Bill Glenn (BillGlenn@TheBreakoutGroup.com) is president of The Breakout Group, a marketing and sales consulting firm. Follow him on Twitter @Sponczar.