By Ron Latham, Managing Director, Latham Consulting and

Daniel Rowlands, Partnership Management & Growth Executive, St George Illawarra Dragons

At a glance: Research has identified three critical areas of concern for rights holders as they fight to retain sponsor support, and their share of the A&P budget in this tough economic climate: Communication: 85% of sponsors agree with the statement that “There is a need for more open

communication between sponsors and rights holders”. Benefits not understood: 46% of sponsors agree with the statement that “The benefits of sponsorship are not

well understood in my organisation”. Evaluation: Key stakeholder feedback is seen as the most important evaluation measure (99%), but only 43%

of rights holders undertake formal sponsor feedback surveys.

Unless rights holders adopt strategies to address these concerns they risk a reduction in revenue, as scarce A&P funds are reallocated to other media that can demonstrate a better return on investment.

Proactive strategies need to be developed to maximise the “touch and tangibility” benefits of the sponsorship within sponsor organisations. Four possible engagement strategies to consider are: Work with the sponsor’s brand marketing, sponsorship and advertising and promotional teams to undertake

innovative, low cost or FOC, added-value activation initiatives that focus on expansion of the sponsorship, e.g. through more: exposure and signage, product association and endorsement, joint promotions, player appearances, client hospitality functions, social media activities etc;

Make building the relationship with sponsors a priority to drive support and buy-in for the sponsorship. Encourage the entire rights holder’s team to increase engagement and have more communication with the sponsor organisation. In particular, focus on key decision makers and influencers in the “C” suite, marketing and sponsorship teams and in the sales, business development and customer-facing areas of their organisation, where it will have most impact and influence the continuity of the sponsorship.

As part of this engagement and relationship building, ensure that all points of contact are “on-side” with the sponsorship and can appreciate the benefits and return to their organisation. Ensure they can “touch” the sponsorship and have involvement in some way, either at the venue or other promotional and support activities.

Implement a Key Sponsor feedback program with the 20% that give you 80% of your revenue and undertake one or two reviews a year, Ensure your KPIs reflect sponsors ROI and ROO objectives and use a 360° assessment tool to gather feedback from all levels of contacts within sponsor organisations. Share and discuss the results with sponsors and ensure performance improvement plans are carried through.

Sponsor retention strategies for tough times: Engagement and evaluation strategies for rights holders to maximise

the “touch, tangibility and stickiness” of their sponsorship.

Sponsor retention in tough economic times: Engagement and evaluation strategies for rights holders to maximise the “touch, tangibility and stickiness” of their sponsorship within sponsor organisations.

Background Rights holders understand that to sponsors they are simply a supplier of one of many mediums available to reach their target audience and consumers and a part of the marketing mix to sell their products or services. They are competing for a share of the sponsor’s advertising and promotional budget that is under pressure in these challenging economic times.

Research has identified three critical areas of concern for rights holders as they fight to retain sponsor support, and their share of the A&P budget in this economic climate:

Communication: 85% of sponsors agree with the statement that “There is a need for more open communication between sponsors and rights holders”.

Benefits: 46% of sponsors agree with the statement that “The benefits of sponsorship are not well understood in my organisation”.

Evaluation: Key stakeholder feedback is seen as the most important evaluation measure (99%), but only 43% of rights holders undertake sponsor feedback surveys.

Unless rights holders adopt strategies to address these concerns they risk a reduction in revenue, as scarce A&P funds are reallocated to other media that can demonstrate a better return on investment.

In this environment, proactive strategies need to be developed to maximise the “touch and tangibility” benefits of the sponsorship within sponsor organisations.

Sponsorship as a competitive advantage Sponsorship is a way to persuade consumers indirectly through an association with a rights holder / property. If used strategically, a sponsorship programme can be developed into a distinctive competence, thus creating competitive advantage.

Gaining a competitive advantage is becoming more of a challenge within a cluttered market place in which there are increased incidences of ambush marketing. This has led sponsors to explore new ways to leverage their investments and maximise sponsorship return, particularly through an integrated approach using sponsorship with other elements of the communications mix (publicity, advertising, sales promotion, personal sales). A synergistic approach will not only maximize communications effectiveness, but also contribute to building brand equity.

The Partnership Both have similar and complimentary needs from the partnership. Research has shown that the competitive advantage achieved by a sponsor, through a sponsorship, is dependent on the strength of the link between the sponsor and the sponsorship property and is far more effective, if there is a logical fit, or “perceptual match”, between the brands of the sponsor and property. The objective for maintaining a sponsorship investment over time is to build an association between the sponsor and the rights holder / property in the minds of consumers.

But continuous involvement in sponsorship activation is also essential to ensure that the complex activities pivotal to sponsorship effectiveness are accumulated through experience and consistent effort.

The Economy The continued tough economic outlook for the next few years presents rights holders / properties and sponsors with both significant challenges and opportunities. For rights holders, their key challenge is to retain their major sponsors, through driving their partnership even harder to deliver on a sponsor’s objectives. Sponsors wish to retain their competitive advantage and build on the brand equity and association gained. History shows that smart brand marketers who can maintain their advertising and promotional spend during a downturn actually increase their share of voice, visibility and top-of-mind awareness, whilst those who cut A&P budgets suffer declines which make it difficult to catch up when the economy improves and budgets return to normal levels.

The challenge for sponsors, in assessing whether to continue their commitment is to demonstrate that the sponsorship achieves their Return on Investment and Return on Objectives targets and that this is well understood within their organisation.

In this environment rights holders’ engagement with sponsors is critical, along with evaluation measures to support the continuity of the sponsorship.

Threats to Sponsorship Whilst the economy and pressure on sponsor budgets, is currently the biggest threat for sponsorship retention, it is cyclic by nature and is beyond the rights holder’s control. Three other core threats that are constant, and where rights holders should remain vigilant with their relationships, are essentially based around the people, dynamics in a sponsor’s organisation, i.e.: Senior Management: In many instances when

sponsorships commenced, particularly sports related ones, they were arranged at a business owner, Board member, CEO or senior management level, often without any real ROI assessment and thought about brand “fit”. Sponsorship decisions were often emotional ones and justified as being “our way of putting back something into the community that has supported us”. The reality was the sport/event was dear to the heart of the decision maker and, put bluntly, it was a chance for them to be “famous”. With the evolution of sponsorship and the addition of support promotional activities designed to leverage and maximise the sponsorship investment, effective control has moved from the boardroom and “C” suite, to the marketing and sponsorship departments. However rights holders should continue to retain and build relationships with their senior management and board contacts, as their influence will be invaluable.

Middle Management: The days of employees staying with a Company for their working life are well gone. Gen X and Y managers are career driven, lack company loyalty (as a result of continued retrenchments of middle management), are very aware of building their CV and always have their eye on their next career move - and a successful sponsorship, particularly with associated sales or market share increases, looks great on their CV. For marketing and brand managers in multi-national companies, sponsorship, advertising and product promotions are often the only quick way for them to “make their mark” during their relatively short tenure. With Global brands requiring consistency in delivery, today’s marketing and brand managers have few opportunities for movement in the four “Ps” of marketing - Product, Price, Place (distribution) and Promotion. Product formulation, pricing and distribution options and strategies are pretty much fixed, so their only opportunity to drive awareness, trial and sales is through promotion. They have learnt that a well targeted and brand-aligned sponsorship, and its support activities, is a far easier, faster way (and often significantly cheaper) to add to their CV, than developing a great creative idea and gaining a massive advertising budget to sell it. Middle management can be rights holder’s greatest supporters in the sponsor company. But constant “churn” of key functional managers, with “ownership” of the sponsorship, is a threat that rights holders need to be aware of and have strategies to safeguard their relationship.

Corporate Strategy: “Change of direction” by a sponsor is often the biggest threat to sponsorship retention. Often a change in corporate strategy, or direction, is linked to (or because of) a management change, whether at board, senior or middle level management. Developing and implementing new, or changes in, strategies is a common way for new aspirational managers to make their mark in a Company, and add to their CV.

For a rights holder this justification for withdrawal from a sponsorship is perhaps the hardest to combat. Only two things will assist you to mount a good case for retention: The ability to demonstrate that the sponsorship meets their ROI targets and that this is well understood within their organisation and the strength and support of relationships with the people above and around the manager seeking change.

Managing complex sponsor relationships: Sponsor relationships have evolved from “one point-of-contact” between the rights holder and sponsor to “multiple points-of-contact”, often coordinated by a key sponsor/account manager who orchestrates the activities of the rights holders’ team.

The sponsor account manager will often work across the organisational matrix. To help them perform this role more effectively, rights holders will need to seek ways to provide their account managers with a holistic view of all sponsorship activities, including access to information.

With the evolution of the sponsorship relationship to that of a “Strategic Partner”, what new capabilities will sponsors demand of their rights holders? How will the dynamics of account management need to change? Rights holders will need to focus on two key areas to enhance sponsorship performance and improve their relationship with sponsors: Customer focus: They must adopt a customer focus

culture with a more agile, responsive organisation that responds to specific sponsor needs. Some rights holders may require a dramatic paradigm shift in how they select, manage and sustain their account management teams. Many must pursue changes in their culture, people, relationships and processes to elevate customer focus to the level of importance demanded by the sponsor organisation (particularly marketing and brand management) to drive and maintain mutually beneficial relationships.

Broadening skills and capabilities: Key account managers often lack the client management and analytical skills required to build and maintain the relationship and need to become more broad-based in their business capability. To improve performance in this area, account managers and teams must better understand the sponsor’s business and shift from a focus on “selling sponsorship” to a focus on “addressing their requirements”. They will need to develop new skills which will enable them to meet shifting needs with greater agility and impact. At the same time, however, traditional relationship-building and sales skills will still be important. The key will be to develop business management skills, while maintaining strong sales ability, to benefit the rights holder in the long run.

Sponsor Engagement and Communication Research indicates that not only is there a lack of open communication between sponsors and rights holders, but that many do not understand the benefits of sponsorship.

Both issues gain in importance during challenging economic times and may put the sponsorship at risk.

With 85% of sponsors and 77% of rights holders agreeing with the statement that “There is a need for more open communication between sponsors and rights holders”, rights holders should be proactive with engagement strategies for key sponsors to extend the sponsorship and build the relationship.

Sponsorship Evaluation – Importance

0% 20% 40% 60% 80% 100%

The benefits of sponsorship are not well understood in my

organisation

There is a need for more open communication between

sponsors and rightsholders

38%

77%

46%

85%

Communication: % Agree with statement

Sponsors RightsholdersSource: Repucom sponsorship outlook 2010

“For knowing afar of the evils that are brewing, they are easily cured. But when they are allowed to grow until everyone can recognise them, there is no longer any remedy to be found.” Machiavelli

Three possible engagement strategies to consider are: Work with the sponsor’s brand marketing, sponsorship

and advertising and promotional teams to undertake innovative, low cost or FOC, added-value activation initiatives that focus on expansion of the sponsorship, e.g. through more: exposure and signage, product association and endorsement, joint promotions, player appearances, client hospitality functions, social media activities etc;

Make building the relationship with sponsors a priority to drive support and buy-in for the sponsorship. Encourage the entire rights holder’s team (Directors, officials, account teams, players, support staff etc) to increase engagement and have more communication with all levels of the sponsor organisation.

In particular, focus on key decision makers and influencers in the “C” suite, marketing and sponsorship teams and in the sales, business development and customer-facing areas of their organisation, where it will have most impact and influence the continuity of the sponsorship.

As part of this engagement and relationship building, ensure that all points of contact are “on-side” with the sponsorship and can appreciate the benefits and return to their organisation. Ensure they can “touch” the sponsorship and have involvement in some way, either at the venue or other promotional and support activities undertaken.

Sponsor relationships have evolved from “one point-of-contact” through the sponsorship officer or CEO, to “multiple points-of-contact” coordinated by an account manager who orchestrates the regular communications, news and support activities. It is vital to establish personal relationships with all levels and touch points within a sponsor’s organisation, so that even if key people leave the organisation, relationships continue at other levels and can be used to leverage and build relationships with new people.

Sponsorship Evaluation – The business case Rights holders, event owners and sports organisations, are businesses and need to regard their sponsors as strategic partners and treat them as if they are key account customers. They need to build relationships and provide added value so that sponsors may build on the sponsorship with support activities that link to and extend the visibility of the association and their brands. In order to retain the strategic partner relationship and sponsors, they need to undertake evaluation of the sponsors’ satisfaction with the sponsorship and whether it meets their objectives. For rights holders there are important benefits from sponsorship evaluation, i.e. to: Better understand and work with brand sponsors Identify sponsors at risk, or where they could improve

the added value they provide and the relationship Demonstrate they deliver ROI for brands, in order to be

successful at attracting and retaining sponsors

2010 research by Repucom, in their Sponsorship Outlook Survey, shows that Key stakeholder feedback is seen as the most important performance measure, with 99% seeing it as either “Extremely, Very or Quite important. Seven of the eight other measures that rated highly in importance are quantitative measures related to the brand, i.e. awareness/attitudes, participation in promotional activity, sales figures etc, or audience reach and participation and media exposure metrics.

Sponsorship Evaluation – The gap There are many market, media and specialist sports research companies that provide a wealth of quantitative information to evaluate the effectiveness, impact and return on investment of sponsorships, including: TV & radio ratings, advertising expenditure; Media exposure (TV, Print, Radio, Internet); Consumers: consumer attitudes, interest, attendance, passion, sponsorship awareness etc, and many have become the benchmark used by rights holders and sponsors alike.

However, it is the qualitative research and sponsor feedback area that is most important and least undertaken. Latest research shows that key stakeholder feedback is seen as the most important evaluation measure (99%), but that only 43% of rights holders undertake sponsor feedback surveys.

As part of their sponsorship evaluation process, rights holders should undertake one or two formal feedback surveys annually – one at the end of the season/event and, where the activity covers a season, an early/mid-season review with key sponsors should be considered - so that any issues may be identified and discussed.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sales figures

Rightsholder health trends

Independent research

Promotional participation

Media reach (TV audience)

Attendance figures

Media exposure analysis

Brand research /tracking

Key stakeholder feedback

9%

6%

21%

15%

27%

27%

24%

33%

27%

21%

46%

36%

55%

36%

36%

46%

58%

39%

27%

21%

21%

18%

24%

27%

24%

6%

33%

Importance of Performance Measures

Extremely important Very important Quite importantSource: Repucom sponsorship outlook 2010

Key Sponsor Feedback Surveys – What makes us different Most sponsor satisfaction surveys are undertaken using traditional market research practices of: Random sampling, perhaps stratified, directed to random contacts, with anonymous responses and reporting at an overall level, perhaps with some demographic analysis, e.g. sponsor size (value range). The problem is you don’t know where the “noise” is coming from or how important the source is and risk reacting to the “squeaky wheel” syndrome, rather than responding in a targeted manner.

Our sponsor feedback programs are based on proven performance management techniques: Specifically targeted at your top sponsors – the 20%

that give you 80% of your revenue; Directed to key contacts/decision makers and

influencers by inviting all contacts at all levels (“C” suite, Senior, Middle and day-to-day contacts);

Anonymous responses, but reporting at a sponsor level, with analysis by each of the assessor groups;

Now you know where the “noise” is coming from, and have individual discussions about improvement.

360° Feedback: Is a multi-dimensional assessment tool commonly used in HR applications for leadership development. We also use this tool and concept in Procurement/supplier and B2B Customer satisfaction surveys and for Key Stakeholder surveys to assess the performance of an organisation and to get comments from various stakeholder groups, so they can understand the different perspectives at either a geographic or contact level (Key contacts & decision-makers).

Two-way reviews: Many organisations also ask their right holders to provide feedback on their performance as a sponsor, particularly in relationship KPIs, separately from the 360° sponsor feedback review.

This technique is used for high-touch, high-value strategic partner relationships where the rights holder is particularly dependent on the timely performance of the sponsor, without which their performance will be impacted. In many instances, these assessments are also combined with a separate 360° feedback survey to gain the perspective of all parties and stakeholders. Our approach: Key sponsor feedback programs should not be just surveys, but part of a process of continuous improvement of formal and informal feedback, review of results and agreed improvement plans.

Four criteria underpin our approach: Performance improvement is a “Journey” to improve

sponsor satisfaction and engagement, with the end game being sponsorship retention.

The process must ensure high sponsor participation through prior engagement, communication of results and evident change.

Our measurement criteria are based on Global best practice, using hard business drivers as well as traditional sponsorship and relationship KPIs.

We are content agnostic in our assessment tools - we don’t insist on standard questions, just to preserve benchmarking. Our on-line software is simply a platform for clients to use their own design, content, KPIs, rating scales and descriptors.

Sponsor Feedback Surveys – the process The critical steps in a successful sponsor feedback program process are: Define specific KPIs and metrics; Survey sponsors:

o Key stakeholders rate your performance. o Rights holders can rate their own performance.

Reports o Individual reports on results, by stakeholder group; o Overall reports showing sponsor comparisons;

Review - Meet with sponsors to identify strengths and prepare action plans to address any areas of perceived underperformance.

KPIs need to be sponsor specific, with realistic and appropriate rating scales and descriptors that align with achievable expectations and agreed to by sponsors. KPIs generally focus on two key areas: Product and Capability: ROI and ROO (Return on

Objectives) KPIs around the brand and activation/ support activities and the partner relationship.

Business Contribution: KPIs that measure how the sponsorship engages key stakeholders in their business and how it adds value to the business.

“If you want to have early warnings about possible problems in a relationship and a way to surface issues and address them

collaboratively, you have to have a mechanism to take the temperature of the relationship, compare its effectiveness up against agreed metrics,

and then talk about the results.” (Source: Vantage Partners)

On-line Appraisal and Feedback Tool The Performware™ Key Sponsor Monitor encourages a collaborative approach to continuous performance improvement in what can be complex business partner relationships, often with multiple touch-points in both organisations. It facilitates a more strategic way to manage sponsor relationships, through metric-based ratings that provide a weighted assessment. Results are presented in a dashboard format along with matrices, trend charts and verbatim comments, all on-line. It will assist rights holders to better engage with their key sponsors and tell them: How your key sponsors rate your performance; What differences in opinion, if any, exist between

your senior, middle and junior level contacts; Other feedback, both positive and negative; Overall comments –the strengths they see in you

and the areas you need to develop. How your key sponsors’ ratings compare

The Performware™ 360° Feedback platform is a leading edge, web-based system that is non-prescriptive, fully configurable, scalable and flexible to suit individual requirements. Key benefits are: It will accommodate your own assessment

philosophy and measures, including KPIs and questions, your own rating scale and definitions;

A unique, optional, algorithm based weighting process can be applied to ensure a focus on priorities. Alternately, you can ask sponsors to weight the importance, to them, of each KPI.

Appraisal - Being web based, with full security and confidentiality, it enables continuous access to appraisals and for them to be undertaken at any frequency and time, anywhere.

The user-friendly features engender confidence in the survey and encourage engagement.

Reviews: o The online tool functionality, includes automated

email notification, and allows us to track survey completion and send reminder emails.

o The assessment process enables participants to assess performance individually, with their results aggregated into assessor groups by function/role or level, e.g. “C” suite, Senior Executives, Managers, functional/operations people etc.

o Free-text comments boxes can be provided for each KPI and there is provision for up to six general comments question in the last section of the assessment tool.

The optional “self-assessment” dimension will provide a comparison of their perception of the relationship with that of the sponsor.

Reports Feedback to sponsors on how they rated your performance is critical and forms the basis of review meetings and action plans. The software provides on-line generated reports for both the individual sponsor and to the account managers for comparison across their portfolio of sponsors. Detailed, automated, on-line reports mean that analysis and feedback can be timely, with a menu of reports in dashboard and graphics formats covering: Sponsor portfolio reports for account managers – By

category, by KPI, rankings, ratings, trends; Individual sponsor reports – Ratings and comments,

with analysis by contact level.

Example Sponsor Reports: Overall score: Shows overall performance summary at KPI group level and ratings broken down by stakeholder groups. The “Traffic light” dashboard style report allows easy identification of areas of high performance (green), with the yellow shading being average and the red zones areas where the detailed analysis reports will identify which specific questions require attention.

Ratings distribution: This report shows stakeholder group “sentiment”, i.e. the percentage that score positive, neutral or negative. Reports are provided for overall performance at KPI group level, and individual question, and can be converted to and compared with a NPS (Net Promoter Score).

A well designed Key Sponsor Feedback program, based on regular performance reviews and constructive feedback will assist rights holders and their sponsors to objectively assess performance and drive improvement. Thus ensuring the continuity of the association, for mutual benefit.

Trend: Shows stakeholder group “sentiment” over time for each KPI and question.

Portfolio report: Overall performance summary at KPI group level, ranked by sponsor, compares sponsor ratings and highlights areas of good performance and concern.

How we work with you When we work directly with you, we provide: Website (your branding), KPIs, survey set-up Survey administration, progress reports Full reports (Sponsor and Rights holders) and

personal presentation of results. Should you wish to use your sponsorship consultancy, with us as an invisible support service, then we provide: Website (your branding), KPIs, survey set-up Survey administration, progress reports Administrator training for your report production

Your consultant works direct with you on presentation of results and individual sponsor improvement strategies.

Summary Today, sponsors want their rights holders to become a “Strategic Partner” and “business builder”, helping to optimise their revenue through an understanding of their specific business needs and delivery on their ROI and ROO objectives.

The journey to a strategic partner is not easy, but is worth the effort. It requires paradigm shifts by both parties, particularly in attitudes, requiring openness, trust and information sharing. Sponsors expect their rights holders to engage with them at all levels and to be proactive in suggesting ways to further leverage and support the sponsorship. Regular informal and formal feedback from both parties is critical in the “Strategic Partner” journey. A Key Sponsor feedback program is a vital tool to help rights holders to improve their performance and reach their full potential and cement their sponsorship and relationship position.

Proactive strategies need to be developed to maximise the “touch and tangibility” benefits of the sponsorship within sponsor organisations.

Four possible engagement strategies to consider are: Work with the sponsor’s brand marketing, sponsorship

and advertising and promotional teams to undertake innovative, low cost or FOC, added-value activation initiatives that focus on expansion of the sponsorship.

Make building the relationship with sponsors a priority to drive support and buy-in for the sponsorship. Encourage the entire rights holder’s team to increase engagement and have more communication with the sponsor organisation. In particular, focus on key decision makers and influencers in the “C” suite, marketing and sponsorship teams and in the sales, business development and customer-facing areas of their organisation, where it will have most impact and influence the continuity of the sponsorship.

As part of this engagement and relationship building, ensure that all points of contact are “on-side” with the sponsorship and can appreciate the benefits and return to their organisation. Ensure they can “touch” the sponsorship and have involvement in some way, either at the venue or other promotional and support activities.

Implement a Key Sponsor feedback program with the 20% that give you 80% of your revenue and undertake one or two reviews a year, Ensure your KPIs reflect sponsors ROI and ROO objectives and use a 360° assessment tool to gather feedback from all levels of contacts within sponsor organisations. Share and discuss the results with sponsors and ensure performance improvement plans are carried through.

To get access to an example assessment, or to have your Sponsor Feedback review converted to the Performware on-line assessment tool, contact Ron Latham: phone +61 2 9959 3815 Ron.Latham@performware.com.au