Are you taking your sponsors for granted?

Stocksy_txp8cdf386beqd100_Medium_799881It is a fact that many professional industry associations have become dependent upon sponsorship support to run a sustainable service for their membership. Most could not function without sponsors’ financial investment and/or in-kind support. Therefore, is the appropriate level of care and attention being given to this area? Sponsors regularly review their spending with associations and reallocate it where they are receiving the best return. In an increasingly competitive market, associations cannot afford to take their sponsors for granted.

There are 5 critical questions a leader of a professional association must ask to ensure they are not becoming complacent about this lifeline for their members and their industry:

1. Is your sponsorship budget realistic? You have most likely determined your objectives and created an ideal model of sponsorship to match this. Your objectives may include 10 annual major sponsors with a budgeted financial investment. This is an important first step, however, this model must be continually reviewed to ensure that the budget is not over inflated or undervalued. If your sponsorship objectives are not being realised, then consider if you are evaluating this correctly. What price are you placing on the benefits and inclusions in your partnership prospectus? Are they above or below market value? Concurrently, your association must be able to deliver on your agreed promises to sponsors and match the financial investment and intent.

2. What is the real cost of servicing sponsorship? Without understanding the real cost for your association, you may be eroding the very benefits sponsorship can bring.
There are two parts to this question:
a/ Under servicing – For example, if you have an ad hoc, casual approach to managing this area in your association you will potentially put the reinvestment of sponsors at risk and be viewed as unprofessional. Therefore, not taking their investment seriously. This approach will also cause your association to miss out on the important relationship aspects and rich opportunities that such a sponsorship can provide to your members. Without a dedicated expert in this area, who is capable of managing sponsorships with consistency and care, you are taking their investment for granted. It is prudent to calculate the number of hours multiple staff members are spending on sponsorship. These staff members would otherwise be focusing on their own key role/s, managing Board issues, membership services, advocacy and general office duties. Do you have more staff working “in” the association than “on” the association? It is essential to get the balance right.
b/ Over servicing – For example, are you giving far more value than you are receiving? Have you put an actual price on the sponsorship activations and opportunities your organisation is providing? Activations such as live events, conferences and exhibitions, endorsement and promotion, general marketing, executive meetings and hospitality. What are the added overheads for your association to manage the administration of sponsor communications and the time fraction of staff who interface with sponsors?

Once you have reviewed both questions fully, you will determine an appropriate level of investment that your association must provide to have a worthwhile and sustainable sponsorship program. This may be a dedicated part time or full-time role within your association or via the support of a consultant who reports on a weekly basis with program updates and activities. Either way, you should have a person with significant expertise overseeing this important financial and branding asset of your association.

Armed with informed analyses of servicing costs and a professional activation methodology, the cost of servicing a sponsorship program is generally negligible compared to the enormous benefit and opportunity it brings.

3. Do you have a sponsorship selection criteria? It is important to be aware that there is an inherent risk of reputation damage by partnering with the wrong sponsor. We are all aware of many such examples in the sporting and business worlds. Similarly, decisions made to partner with an organisation based purely on financial gains will generally not result in a quality, long term partnership. An ideal sponsor partner should align with the values and objectives of your association and be considered of professional merit to your broader membership and your industry. Ensure you have robust selection criteria in place to determine the best sponsor partners for your organisation.

4. How happy are your sponsors? It is naïve to assume that sponsors are content with their sponsorship simply because the financial support is forthcoming. As for any major budgeted item in business, sponsors will review and question the value of their contribution regularly. Not only will they review the formal obligations of the partnership, but they will also place a value on the quality of the relationship and the inherent benefits of the collaboration. Do you really know if they are happy and when did you last ask your sponsors in a purposeful manner and not just in a casual conversation if they were satisfied? Will they reinvest with you, speak highly of your association and all of your team members and have you provided them a return on their investment?

5. Is there opportunity to grow your sponsorship base? To answer this, you really need to understand the value proposition your association offers. What is your reach, ability to advocate, influence and engage your members? What status does your association have in the sector and what are you doing to continually innovate and develop your association? New sponsors will be attracted to an association that can clearly state and prove its value to their business. They will also need to be assured that your association has the internal resources and ability to develop and maintain this value – not be operative at surface level only.

Traditionally, associations are stretched for time and resources making it difficult for them to manage this area well and remain a valued partner for astute sponsors. To achieve this requires a skilled specialist which is why an increasing number of associations are outsourcing some or all of this business function. Associations which simply could not survive without sponsors must address this seriously and give it the professional esteem it requires.

Sponsorship Matters offers specialist expertise for associations and corporate businesses to create, secure and safeguard mutually beneficial sponsor partnerships. To discuss support for your sponsorship program or to inquire about how to commence one, contact kristen@sponsorshipmatters.com.au // www.sponsorshipmatters.com.au

 

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