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Successful sponsorship in a time of recession

If you were wondering whether the sponsorship industry is in some kind of death throes as a result of shortage of the readies for sponsored events think again, says brand marketing and sponsorship guru Ardi Kolah, who recently chaired the Think!Sponsorship conference in London.

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The industry, of course, needs to raise its game, but I firmly believe this is exactly what it is doing.

Despite the headlines engulfing sponsors within the banking and financial services sectors, the British economy is more robust than you think. The fact remains that the world will keep spinning on its axis whatever happens in the financial markets.

And the same is true for the vast majority of companies that need to deliver shareholder value and profits to their investors. They don't stop trading -- or give up -- because it's tough out there.

Successful brand owners focus their efforts on creating value and ensuring their messages reach their market and customer segments with maximum impact.

There is evidence that having a durable brand is the best weapon in the face of increased competition, where the battle for share of wallet is getting harder as a result of less disposable income sloshing around the high street.

Add to this media fragmentation and the fact that communication is now 30 times faster than it was 10 years ago -- and it's a daunting task for any marketer to get customers to slow down long enough so they can be heard.

Research I have conducted over the past decade leads me to three important conclusions:

  • Successful sponsorship can shift products and services
  • Successful sponsorship is about achieving a return on objectives
  • Successful sponsorship is about achieving a return on investment.

I've just returned from Riga, where I had the opportunity to speak to some of the biggest brand owners or sponsors and rights holders in Croatia. Every delegate at the workshop was focused on one thing -- sales.

Yet selling gets a bad press back here in the UK. Isn't it better to tell your parents you're a marketing strategist than a salesperson?

Well, not anymore! A senior executive at EMI told me recently that the ratio of strategising to sales is 1:9. And in these dark economic times, it is sales that will keep the lights on.

So when it comes to selling sponsorship, where do most rights holders get it wrong?

  • Don't get to understand the brand owner and its competitive situation first.
  • Poor timing of the "pitch" in terms of the sponsor's financial year end.
  • The perspective is "inside out" rather than "outside in".
  • Focus on price rather than value from the perspective of the sponsor.
  • No research analysis used to provide the level of confidence required.
  • No focus on how the sponsorship will achieve a return on objectives and a return on investment.

I could go on, but these are some of the key causes of not getting the sponsorship sales result we want.

Timing is important. Get in early before budgets are committed so that you can be on the brand owner's radar. Alternatively, there may be budget that needs to be used up before the end of the financial year end.

Make a point of diarising this in your Outlook calendar and make the call.

On the point of brand owners -- the most badly affected in the current economic turmoil are likely to cut costs in a hurry and across the board. And when the axe falls they may not know whether a critical success factor or area of overhead has been taken out.

Not continuing with a sponsorship programme may cause consumers as well as shareholders to suffer a lack of confidence for the future and that will be detrimental for the brand in the long term.

The brand owners that are currently worst affected are banks and financial institutions, the automotive industry and airlines.

Traditionally, these have been some of the biggest sectors that have invested heavily in sponsorship, but that trend may change over the course of the next two years.

So getting a sponsorship sale within any of these sectors will take more than luck, in my view. What the property will actually deliver in terms of helping to generate incremental sales will be key.

But there are other brand owners out there -- and some of them may be on your doorstep. What about successful local companies that employ large workforces and need to keep them motivated and focused?

Can you help? Do you have a property that provides a cost-effective, creative and powerful solution? Is there a compelling case study that demonstrates how this property helped another brand owner to meet its challenges and delivered tangible and intangible value?

Some sectors are, of course, doing better than others and are able to weather the storm of an uncertain economy. These include fuel, utilities, telecoms, technology, pharmaceutical and consumer goods companies.

What separates these companies from those that are struggling is that they take a more balanced approach.

They will be interested in economies within their business, but also in improving the performance of their sponsorship investments. In some cases, this may translate into investing in sponsorship if this secures some competitive advantage or higher ROI.

They may remain alert to opportunities to re-position themselves to be better equipped to capitalise on a resurgence of economic activity. Sponsorship could be a powerful platform in this context.

Ardi Kolah is author of the best-selling 'Sponsorship Works' and founder of Guru in a Bottle -- a new sales and marketing training and mentoring service aimed at B2B and B2C small- to medium-sized companies. He can be contacted at ardi@kolah.com

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