As a business owner, manager, assistant, or many other titles, you have probably been approached to sponsor something. I have heard of opportunities to sponsor cheerleading teams, mission trips, vehicles, charitable events, performances, outdoor events, and so on. The list is endless, but the same question always comes to mind first: why should I sponsor anything?
First, we need to identify a sponsorship opportunity. When asked to sponsor something, you must be given something in return. Most sponsorships return logo placement, name mentions, product placement, or something of this nature. Regardless what you receive, you must receive something of value for it to be considered a sponsorship, otherwise you should not consider it at all or it is just a charitable donation, as in sponsoring a church’s mission trip.
There are several reasons to participate in sponsorship opportunities. Sponsorships are part of marketing plans for all types and sizes of businesses.
Reason #1: Exposure.
Exposure is just another word for advertisement, but a sponsorship advertisement is not like other “advertisements.” A sponsorship lets you advertise your name or company without fighting consumers’ natural tendency to shut you out. In fact, consumers are more likely to allow you to enter their consciousness through sponsorships because you have now been attached to an event, idea, or place that the consumer already has an interest, therefore you may also be of interest to them.
Exposure in the community is also vital to any business’ success, especially smaller businesses. When taking advantage of sponsorship opportunities in your community, you gain recognition and creditability within your local market. Businesses that rely of customers within close proximity of their location will find exposure in the community to be almost priceless.
Reason #2: Contacts.
When you sponsor something you have made a business contact. This contact may be a potential customer, reference, or supplier. Throughout a sponsorship, you usually develop or strengthen a business relationship that may and should become helpful at some point. I learned years ago that everyone that I do some type of business with is a good contact. The better relationship you develop with your contacts, the more you do for each other.
Contacts also arise from the event, activities surrounding the event, networking opportunities, and etc. If you are sponsoring an event – which is what I recommend you use most of your sponsorship budgets for – you usually get free admission, VIP passes, or the like that would allow you to network with potential customers. You also come in contact with other sponsors that can be potential customers. You should be careful when sponsoring things that include direct competition, therefore other sponsors should be valuable in some capacity.
Reason #3: Sales Opportunities.
Once you have signed on to a sponsorship, use it to generate sales. By sponsoring an event, you have a foot in with potential customers already, and this leads to possible sales. Structure advertising campaigns around the sponsorship if possible. Seek co-op opportunities with the sponsored organization, person, place, or event. The first reason given for sponsorships was exposure. Exposure, just like other advertising and promotion is useless if it doesn’t generate sales. Even if it doesn’t generate sales directly, it must be beneficial to your business.
Reason #4: Giving back.
Many times sponsorships are requested for charitable organizations or events. If it is a sponsorship opportunity or charitable donation, many times this is a result of giving back. I have committed to sponsorships that provided some exposure, some sales, and some contacts but ultimately I saw it as a chance to give back to the community and those that have helped me get where I am. I once read that in order to receive and profit you must give back and I believe this is true. Even the most opportune sponsorships are a way to give back, especially if it is for a charitable reason.
Reason #5: Tax Write-Off.
Once you have decided that a sponsorship opportunity is right for you and make your contribution, you have created an expense. Just like advertising expenses are deducted, so are sponsorships. Even if the sponsorship is a charitable donation, it is a write-off. Be sure to include this expenditure in the expense column.
If you are in a position that receives sponsorship requests, pay attention to them, especially if you are also in charge of advertising and promotion, and if you are not, get the person who is involved. I know you will filter through many requests and see many “opportunities” to sponsor things, but some can have more benefit than thousands of dollars spent on advertising or promotions. Also, you may find this to be an excellent way to structure an advertising mini-campaign.