As a business owner, manager, assistant, or many other titles, you’ve probably been approached about sponsoring something. I have heard of opportunities to sponsor cheer teams, mission trips, vehicles, charity events, performances, outdoor events, etc. The list is endless, but the same question always comes first: why should I sponsor something?
First, we need to identify a sponsorship opportunity. When you are asked to sponsor something, you should receive something in return. Most sponsorships return logo placement, name mentions, product placement, or something of this nature. Regardless of what you receive, you must receive something of value to be considered a sponsorship, otherwise you should not consider it at all or it is just a charitable donation, such as in sponsoring a church mission trip.
There are several reasons to participate in sponsorship opportunities. Sponsorships are part of the marketing plans for companies of all types and sizes.
Reason #1: Exposure.
Exposure is just another word for advertisement, but a sponsorship advertisement is not like other “ads”. A sponsorship allows you to advertise your name or company without fighting the natural tendency of consumers to exclude you. In fact, consumers are more likely to let you into their consciousness through sponsorships because you’ve now linked to an event, idea, or place that the consumer already has an interest in, therefore it may be of interest to them as well. .
Community exposure is also vital to the success of any business, especially smaller businesses. By taking advantage of sponsorship opportunities in your community, you gain recognition and credibility within your local market. Businesses that rely on customers who are in close proximity to their location will find the exposure in the community almost invaluable.
Reason #2: Contacts.
When you sponsor something, you have made a business contact. This contact can be a lead, referral, or supplier. Throughout a sponsorship, you generally develop or strengthen a business relationship that can and should come in handy at some point. I learned years ago that everyone I do any kind of business with is a good contact. The better the relationship you develop with your contacts, the more they will do for each other.
Contacts from the event, activities around the event, networking opportunities, etc. also arise. If you’re sponsoring an event, which is what I recommend using most of your sponsorship budgets for, you usually get free admission, VIP passes, or the like that will allow you to network with potential clients. You also get in touch with other sponsors who may be potential customers. You have to be careful when sponsoring things that include direct competition, therefore other sponsors should be valuable in some way.
Reason #3: Sales Opportunities.
Once you’ve signed a sponsorship, use it to generate sales. By sponsoring an event, you already have one foot in potential customers, and this leads to potential sales. If possible, structure ad campaigns around sponsorship. Look for opportunities to cooperate with the sponsored organization, person, place or event. The first reason given for sponsorships was exposure. Exposure, like any other type of advertising and promotion, is useless if it doesn’t generate sales. Even if it doesn’t directly generate sales, it must be beneficial to your business.
Reason #4: Give back.
Sponsorships are often requested for charitable organizations or events. Whether it’s a sponsorship opportunity or a charitable donation, it’s often the result of giving back. I committed to sponsorships that provided some exposure, some sales, and some networking, but ultimately I saw it as an opportunity to give back to the community and to those who helped me get to where I am today. I once read that in order to receive and profit you must give back and I believe this is true. Even the most timely sponsorships are a way to give back, especially if it’s for a charitable reason.
Reason #5: Tax deduction.
Once you’ve decided that a sponsorship opportunity is right for you and make your contribution, you’ve created an expense. Just as advertising expenses are deducted, sponsorships are also deducted. Even if the sponsorship is a charitable donation, it is a cancellation. Be sure to include this expense in the expense column.
If you find yourself in a role that receives sponsorship requests, pay attention to them, especially if you’re also in charge of advertising and promotion, and if you’re not, get the person involved. I know you’ll filter through a lot of applications and see a lot of “opportunities” to sponsor things, but some may have more benefits than thousands of dollars spent on advertising or promotions. Also, you may find this to be a great way to structure a mini ad campaign.