Sponsorship is when a business provides funds, resources or services to a club, in return for some form of rights and/or associations with the club that may be used to help the business commercially. This could be in the form of a logo on a football, signs at an oval or free advertising in the newsletter.
Making the decision
Before you involve your club in sponsorships, ask these questions:
What rights or benefits can your club offer a sponsor?
There are many reasons why businesses sponsor clubs, here are just a few: improved image, increased sales, competitive advantage, increased awareness, ability to lock out a competitor or change consumer attitude.
Have you thought about inappropriate sponsors?
Identify any potential sponsors who would be unacceptable for your club.
Do you have appropriate resources?
If you promise to deliver a number of rights and benefits to a sponsor, there needs to be time and members or volunteers to help carry these out.
It is good business practice to create a sponsorship policy within the organisation before you apply for sponsorship. This will help clarify expectations regarding sponsorship deals particularly for members. Identify in the policy:
- Objectives for entering into a sponsorship
- Rules for entering into a sponsorship agreement
- A standardised approach towards sponsorship throughout the organisation
- The level of accountability and responsibility.
Like all forms of fundraising, it is easier to start locally with your members, friends and relatives. If people know your club and understand what you do, then they are more likely to listen and give the support required.
There may even be someone within the club who has a small business and is willing to sponsor the club. Check with your suppliers of sports clothing, food and equipment. Research local businesses and target those who could benefit from a partnership with your club.
You can also approach larger organisations. They may have more resources but keep in mind they may not have the interest or commitment that you want. Unless you have a contact, it may be more difficult to get to speak to them as they are generally inundated with requests for sponsorship.
Selling sponsorship can be considered an art form. Improve your chances of winning the deal by using these golden rules:
- Offer an opportunity and not a problem - offer a solution to a potential sponsor’s problems, such as providing a bottom line saving or profit
- Target companies with the right fit - does your target audience's demographics - psychographics and geographic location - fit with those of the company or brand to be promoted?
- Offer rights that the company can exploit - offer value for money - price your 'product' to ensure your organisation will benefit from the relationship and that the sponsor will make a profit. Make sure your product is priced similarly to comparable products
- Stand out from the clutter - make sure your proposal is addressed or delivered to the person who has the power to say ‘yes’. Often the contents of a courier bag are treated with more respect than an envelope received in the mail
- Be professional - make sure your representatives, including volunteers, always present themselves in a professional manner and understand what is required of a commercial relationship
- Be persistent, not a pest - following up a sponsorship request is necessary, but not to the extent that you interrupt the recipient’s ability to do their job. It will take time for a potential sponsor to come to grips with what you are offering and for a relationship to grow and develop.
A sponsorship proposal is a formal offer to do business. It needs to be well presented and contain enough information for a company to gain a thorough understanding of what it is being offered.
Sponsorship agreements can be as simple as a verbal agreement to give a donation of a hundred bread rolls from the local bakery through to complex five-year agreements for naming rights of your local competition.
It is good business practice to have a formal agreement or contract in place and is a necessity for significant funding. Lack of a written contract increases the potential for misunderstandings and the relationship turning sour. A change of personnel can mean the intent of an agreement is lost, unless the agreement is in writing. If unsure, consult with a lawyer to ensure the agreement is sound.
Never assume you will get certain rights. Clearly state the rights agreed to or commitment in the contract.
Keeping sponsors happy
Once you have entered into a commercial agreement with a company, it’s up to you and your club to honour these commitments and keep your sponsor happy.
Most businesses like to feel involved and to be kept informed about what’s happening with their sponsorship deal and the club’s activities. Depending on the type of sponsorship, here are some ways to ensure a successful sponsor relationship:
- Promote the sponsor at every opportunity
- Acknowledge the sponsor in every media story you release
- Communicate with your members to ensure they look after sponsor’s rights
- Invite the sponsor to events and to give prizes at awards nights
- Establish more than one key contact in case the main contact moves on
- Keep your sponsor informed about the club, especially any potential unpleasant publicity
- Before signing a new sponsor, give existing sponsors the opportunity to address any concerns they may have
- If you have sold naming rights, you must acknowledge them in everything you say and do. You must also ensure that the media are aware and adhere to the naming rights
- Send your sponsor an evaluation report.
The best way to make sure your sponsor understands the returns is to provide an evaluation report detailing the benefits received. It is also good business practice to show evidence of accountability. Evaluation also helps a club formally review its activities, provides a frame of reference for future projects and aids the planning process.
Decide in the negotiation process the level of reporting and evaluation you are going to provide each sponsor. Every case is different and depends on the size and type of offering. The report can be as simple or as complex as you want it to be. Follow this simple guide to help you write an evaluation report.
- What the evaluation covers and the methods of measurement used.
- What was sponsored and for how long
- A copy of the contracted rights, benefits, category of membership, level of exclusivity
- The performance of the club or event during the period of the sponsorship
- A list of other sponsors
- A description of the sponsor’s competitors in this area
- Photos of signage at the event.
- How you assessed the needs in preparation for sponsorship
- How you undertoook surveys, measured the media coverage or counted the attendance
Report on both positive and negative outcomes as a result of the sponsorship. Headings could include:
- Sales - a detailed analysis of direct sales generated for the sponsor through sponsorship
- Media coverage - report on all media featuring the sponsor during the period including number of mentions, transcriptions of radio coverage, tv coverage in minutes (supply copy if available), copies of articles from newspapers and magazines
- Sponsor’s image - surveys should be undertaken amongst spectators, club members and the public, if appropriate, to demonstrate sponsor awareness, attitude to sponsor, sales that resulted through sponsorship, likelihood of future sales due to sponsorship
- Numbers affected by the sponsorship - relevant statistics should be included here, including:
- Number of people who attended the organisation's events
- Number of people who saw the event through the media
- Demographics - age group, earning capacity, gender etc
- Whether the organisation or event is in a growth or decline cycle.
- Publicity delivered through signage:
- Publicity received
- Quality of the publicity generated through the sponsorship signage
- Number of impacts that saw posters, newspaper ads, tickets etc.
- Hospitality provided
- Facilities used
- Missed opportunities (eg empty seats where tickets were provided)
- Cost benefit analysis - an objective financial style report detailing:
- All property costs
- All benefits that accrued to the sponsor.
- Improvements that would help the sponsor maximise its benefits: