HOW TO RIDE OUT A BAD SPONSORSHIP

(and Get Out Gracefully, when the Time is Right)

By Kim Skildum-Reid

Just about every rightsholder in the world can run through their sponsorship portfolio, noting the great sponsors, the improving sponsors, and the sponsors that are just taking up space – the bad sponsors. You don’t hate them, and they may be lovely people, but you know they just aren’t right for your property, and you don’t know what to do about them.

To be clear, when I reference “bad sponsors”, I’m not necessarily talking about sponsors with bad intentions, although those do exist. I’m talking about sponsors that are significantly less than ideal for your organisation. These could include…

• Sponsors that aren’t a great fit for your properties values, attributes, or target markets

• Sponsors that may have once been a good fit, but they’ve changed direction (or you have), and they’re not anymore

• Sponsors that are sponsoring at a far lower financial level than you should be getting in their category, and they have no interest in investing more

• Sponsors that don’t leverage well or at all, adding nothing positive to the fan experience

• Legacy sponsors that appear to be investing more out of habit than any belief in the value of the partnership

There are bad sponsors that I’m not covering in this blog, because they don’t have good intentions, and the faster you turf them out, the better. These include sponsors that…

• Are bullies

• Put you in financial strife

• Consistently do things that diminish the fan experience

• Demand too much exclusivity

• Breach exclusivity

Back to that middle ground – the not-great sponsors that you need to live with for now – and how to make the best of it.

Making a Silk Purse Out of a Sow’s Ear

That was one of my grandpa’s favourite sayings, It references trying to make something beautiful out of not-great materials. Sometimes it works. Sometimes it doesn’t. But if you’re stuck in a contract with a less-than-ideal sponsor, there are some ways to make the best of it.

This advice assumes that you’ve tried to change the fundamentals of the relationship – the engagement level, the sophistication level – to no avail, and what you’re doing now is trying to get something good out of the relationship, while riding it out.

Can they make referrals?

The sponsorship industry is robust and global, but the network of sponsors in a given marketplace is generally not that big. Sponsors know each other. They sponsor the same properties, they go to conferences together, they change jobs and grow their networks.

If you’ve got a not-ideal sponsor that is well-connected, you can ask for referrals to other potential sponsors. If you’ve got a specific sponsor in mind, they may be able to help you get a foot in the door. They may also have some ideas for potential sponsors, where they have a contact. Either way, the only way to know is to ask and, frankly, you should be doing this with all of your sponsors.

Can they substantially extend your marketing plan?

Does your not-great sponsor have substantial marketing channels? A big mailing list or social following? High-visibility or high-traffic locations? You could work with them on leveraging the sponsorship through those channels, extending your marketing efforts.

This does require that you’ve got at least a moderately good target market and value fit, otherwise they’re extending your marketing plan in a direction you don’t want to go. But if that works, this is one way you can extract more benefit from a sponsor.

Can they provide expertise or volunteers?

If the sponsor has tech, operational, or marketing expertise that you would otherwise have to hire in, they may be able to provide that expertise to you. It could be a short-term secondment, or simply some consulting-style advice.

Or maybe they have a workforce that would love to volunteer for your property, providing the people-power to help bring what you do to life.

Either way, it provides both you and the sponsor with more value.

Are there sensible cross-promotional opportunities?

Occasionally, there is some value in pairing up one of your better sponsors with one that is less great, so they can implement a strong leverage idea together. You could come up with the idea, and bring them together, or you could identify a potential pairing, bring them together, and brainstorm how it could work.

Does it take almost no effort to service them?

Then there are the sponsors that pay the fee year after year, do nothing with the sponsorship, aren’t interested in doing anything with the sponsorship, but demand very little from you. It’s the flipside of “take the money and run”.

This is not the kind of sponsor you want in your portfolio, it’s really not. But if they’re causing no harm, and not limiting the other sponsors you can sell, there’s no huge downside to letting them bumble along for a while.

Moving On

Again, the above advice is about riding out a contract that just isn’t working for you. The last thing you want to do is renew it. Truly, don’t renew contracts with bad sponsors. It’s not worth it.

The best demonstration of your value to sponsors is your current slate of sponsors. If current sponsors see the value, they’re happy, and they’re leveraging in creative and strategic ways, that’s a huge positive for future sponsorship sales. Dead wood in your portfolio isn’t.

Don’t put off the inevitable

If you know you don’t want to renew a sponsor, tell them straightaway, even if there are months or a year or more left on the contract. Be super-clear that you are still committed to delivering on the sponsorship, right up until the contract expires, but you won’t be seeking a renewal.

Be upfront

Tell them why you won’t be renewing. Don’t blame individual people, because the issues may be out of their hands. The sponsorship may lack internal buy-in, or it may be a CEO-choice sponsorship that never worked for the brand. Their brand direction may have changed, and what worked for them before doesn’t anymore. Their attention may be totally focused on some other, huge sponsorship. They may be going through a restructure, or it may be something else.

A good strategy is to say something like one of these…

“We’ve valued you as a sponsor for the past X years, but it appears that the sponsorship isn’t working well for either of us. It’s just not a great fit, and that’s limiting its success. We don’t want that, and I’m sure you don’t either. For that reason, we’re making the hard call not to seek a renewal at the end of the contract. We will continue to work with you until then, and wish you all the best with whatever comes next for your sponsorship program.”

Or your could swap in…

“Commercial reality is that a property like ours should have a larger, more active sponsor in your category. We realise that’s not something you can do, at the moment, but it is something that we’d be remiss not to pursue.”

Or…

“You’ve been a sponsor for many years, which we’ve valued enormously. But in the past few years, the sponsorship appears to lack buy-in and engagement from your stakeholders. It’s not atypical that a sponsorship of this kind of tenure will eventually go off the boil, so we get it. But rather than beating a dead horse, we believe it’s best that we both move on.”

All of these examples position your organisation as a professional, commercially astute peer, and that’s a good thing. In any case, as difficult as the above conversations may be, it’s better than keeping problematic sponsors around indefinitely.

The mutual goodbye

One thing that may come of a conversation like the above is a mutual decision to shorten the contract. For instance, if you have 18 months to run on a contract, you may decide to keep going through the next event, and drop the final year.

Again, this must be a mutual decision, and better for everyone involved. If it’s not, then don’t make that offer. But if you do decide to amicably part ways, it frees both parties up to pursue new and better opportunities.

The upshot

• Work with a sponsor and their stakeholders to develop a really good leverage plan.

• Hold a sponsor workshop. I do a lot of these, where I walk all of the sponsors through the process of developing their leverage and measurements plans, so they leave with a draft plan and a lot more vision about what they can accomplish with it.

But if you’ve tried one of these strategies – or something like them – and nothing has changed, you need to resign yourself to the fact that it’s unlikely to improve. It’s time to make a plan for life after that sponsor, and make the most of your remaining time with them.

Kim Skildum-Reid is one of the sponsorship industry’s most influential thought leaders. She has a blue-chip list of consulting and training clients spanning six continents, is author of global industry bestsellers, The Sponsorship Seeker’s Toolkit and The Corporate Sponsorship Toolkit, and commentates to major business media around the world. She is the brains behind industry hub, PowerSponsorship.com, and offers sponsorship consulting, training, speaking, and coaching. Kim can be reached at: Email: admin@ powersponsorship.com | Phone AU: +61 2 9559 6444 | Phone US: +1 612 326 5265 or for more information, go to: powersponsorship.com/