When seeking sponsors for meetings, conferences, and more, associations need to be ready for the loaded question, “What is the ROI for this sponsorship?
Answering isn’t always so simple, yet the response you provide can be crucial to closing the deal. Are you ready to respond?
Have you considered: What are they really asking when they ask about the return on investment of the sponsorship? Rather than having a “canned response” about the value of sponsorship, asking several follow-up questions can help you drill down to your potential sponsor’s specific needs and concerns.
After all, each sponsor has different goals and ways they assess the value of an opportunity. Motivations may include thought leadership opportunities, seeking recognition and visibility, obtaining sales leads, or aiming to reach a new customer segment. And, each company may assess sponsorship opportunities using a totally different type of calculation!
In this post and accompanying video, we walk through an approach to confront the ROI question head-on and use it as an opportunity to enhance your sales conversation and convert sponsors.
1. Acknowledge and understand the sponsor’s priorities.
If the sponsor’s focus is on brand recognition for a newly launched product, the specifics driving that ROI analysis differ from one focused on thought leadership. Similarly, the sponsor motivated by thought leadership wants very different ROI insights than one looking for sales leads. The sponsorship packages your association offers likely speak to each of these, so make sure you understand the priority motivation of your sponsor. These insights can help steer and direct the ROI conversation in a way that best serves the sponsor and your association.
2. Clarify the rationale behind the ROI question.
When a potential or current sponsor is asking about the ROI, explore if there is a hidden or underlying reason that prompted the inquiry. Prior to responding, you want to understand their rationale. For example, their question could be the result of:
· A new executive assessing their current sponsorship portfolio. Perhaps they are re-evaluating their sponsorship relationships and would like to gain a sense of which ones are the most valuable.
· A past sponsorship that didn’t go as planned. The company might have had a bad experience as a sponsor at another event – or as a sponsor at your association. Perhaps the sponsorship did not meet their expectations or achieve the desired results, resulting in their scrutinizing other sponsorship opportunities.
· A competing sponsorship opportunity that they are comparing yours against.
Under these scenarios, when you understand where your sponsor is coming from and hone-in on the type of information they want will help you move the conversation forward.
3. Ask how they calculate ROI.
Once you understand why they are asking about ROI, ask that they explain how they themselves calculate the return. Do they have a specific formula? Most companies struggle themselves to assess the ROI. It is usually based on a combination of the number of leads generated, sales closed, and anecdotal information.
Are they interested in some of the “intangible” (and harder to specifically measure) benefits of sponsorship, such as thought leadership, visibility, or the value of aligning their brand with your association? Or are they asking for specific figures that they plan to plug into their own internal calculations?
If they can articulate what they are seeking in their own assessments, you can focus in on those areas. If they are not able to explain how they calculate the return, it is important to address their priorities and the specifics of their ROI interest.
4. Customize your response.
Depending on the responses from your sponsor, follow-up falls into one of these categories.
· Justify the return. Share “success stories” from past and current sponsors regarding how sponsorship has helped their business, provide survey data that shows that other sponsors found it valuable, or offer another way to justify the value and return – specific to the priorities of the potential sponsor.
· Counter sponsorship decisions based on ROI formulas. In our last blog in this series, Elizabeth Engel raised issues when responding to the ROI question from a membership perspective. Her advice there holds true here: Avoid creating an ROI calculator or attaching dollar values to specific benefits. Be wary if your potential sponsor is tied to a specific ROI calculator. Sponsorship is so much more than a transaction. It is a multi-faceted engagement. Sponsors build relationships and grow business through the doors that have opened for them because your association created that space and that sponsorship opportunity.
So, if and when a sponsor states that they expect x number of sales or y number of quality leads to reach their ROI, provide the metrics with a side of the intangibles accompanying sponsorship that also serve their need. The reality is sponsorship is a long game. They may have unreasonable expectations for quick returns that can be reframed strategically through long-term benefits.
· Admit and acknowledge ROI concerns. In situations where multiple sponsors have raised the same issue or you know that the complaint has merit, acknowledge and admit the problem. Next, tell them what steps you will take to rectify the problem. Consider offering some type of ‘make good’ for a future event or activity. This shows good faith and helps to maintain the relationship. This will gain the respect of the sponsor contact as they know that you plan to address their concerns.
The ROI question is a conversation opener and should not be rushed through. The question presents an opportunity to address the specific needs and priorities of your sponsors, and then to share information that speaks directly to the issues raised. Be sure to capture and confirm what they articulated, and in your follow-up, to address those needs and priorities specifically.
Remember that you don’t have to answer on the spot. Better to have a focused, directed response to the ROI question that addresses the sponsor’s needs in a future conversation, than one that leaves them wanting more.
What will happen when you are more intentional with your response to the ROI question? You’ll know your sponsors better, your sponsor contacts will increase their respect for you, and your sponsorship income will increase.
Watch as we delve into the ROI response steps. Please share your experiences below in dealing with ROI questions.
In the next post, Elizabeth will address how to gain buy-in from your board and senior leadership for changing your membership model.
Flax Associates helps associations and nonprofits establish mutually beneficial partnerships that enhance the value offered and result in additional funding. We help develop the strategy, structure, and ability to STEP Up from sponsorship to partnership. If you’d like to discuss your current sponsorship strategy and plans to boost your revenue, please reach out by email (email@example.com) or phone (202.266.2655).