By Tony Lachowetz, Dr. William A. Sutton, and Dr. Mark A. McDonald
Tony Lachowetz is a PhD student and William A. Sutton, EdD, and Mark A. McDonald, PhD, are professors in the Sport Management Program at the University of Massachusetts-Amherst.
Athletic Management, 12.6, Oct/Nov 2000, http://www.momentummedia.com/articles/am/am1206/ovoselling.htm
If you want to develop sponsorship revenue streams for your university, you need to treat your sponsors as partners.”
Those sage words from University of Washington Director of Marketing Leslie Wurzberger should not be taken lightly. And there’s more: “With all the events and teams competing for sponsorship dollars, you need to build long-term, win-win relationships with your sponsors that can demonstrate measurable results for both parties.”
You’ve probably heard the term corporate “partner” before, and you know that listening to the needs of a prospective sponsor is critical to landing a deal. But, there’s actually a lot more you can do to entice, capture, and retain corporate sponsors in today’s marketplace. It’s called “eduselling,” and it’s allowing sports organizations to better attain those elusive win-win results with corporate sponsors.
Eduselling is a process of continually and systematically providing information and assistance to the prospective sponsor. It is a customer-oriented form of selling that comprises needs assessment, relationship building, customer education, and post-sale assistance. It begins at the prospect-targeting stage and progresses to an ongoing partnership agreement. In this column, we will discuss the concept of eduselling and give tips on how to apply it to corporate sponsorships for effective results.
Pursuing Long Term Profits
Before we begin to discuss the sales procedure, let’s discuss the issue of profitability—and how it’s reliant on the development of long-lasting relationships. Short-sighted marketers frequently, and mistakenly, measure success by counting the number of new customers they bring in. However, it is more profitable in the long term to focus on turning existing customers into repeat customers. The idea is that, if you cultivate a relationship with a customer correctly, it can produce on-going sales. Marketing strategists often quantify this in terms of “customer lifetime value,” or LTV.
By using simple math, it’s possible to estimate the LTV of each customer. A savvy car dealer, for example, knows that each patron who enters the showroom for the first time represents a potential LTV of over $300,000. This figure is calculated by estimating the value of cars purchased by people over their lifetime including service charges.
In the spectator sport industry, then, we should look at a season-ticket holder not as a $4,000-per-year purchaser, but as someone who, depending on current age, may spend upwards of $100,000 for tickets, concessions, and parking.
LTV & Corporate Partners
So exactly how should collegiate marketers go about capturing this incredible windfall we call customer lifetime value with regards to corporate sponsors? It all begins with a little homework. Marketers must familiarize themselves with local and regional companies that seem to be a good match for the athletic department’s desired image. Once these prospects have been identified, the marketer needs to determine if these companies have previously been involved with sport sponsorship—and if they viewed it as a success. This will help to focus your time on the prime targets.
After narrowing down your list of potential sponsors, you can begin thinking about how to develop long-term relationships with the prospects. This is where eduselling—educating the potential sponsor—begins.
A great way to start the process is to develop what we refer to as “how to” kits. While some prospective sponsors will have knowledge of how to effectively utilize a sport sponsorship, a large group of sponsoring companies may be confused about the benefits and possibilities a sport sponsorship affords.
The purpose of the “how to” kit is two-fold. First, it is used to describe the different sponsorship options available to the company; e.g., TV commercial spots, access to coaches, product sampling, category exclusivity. Second, the kit should provide examples of what other sponsors have done with their benefits to use sports as a promotional tool.
The next phase in eduselling entails allowing your customers to “test the product” you want them to sponsor. In other words, take your potential customers to a game. By getting the sponsor to experience the athletic program, this person will gain first-hand knowledge about the program’s relationship with the public, the game experience, the fans, and the potential sponsorship opportunities that will benefit his or her company.
A Package Deal
Now that you have educated the potential sponsor about the athletic program and they have educated you about their company, it’s time to put it all together and present a package. The different aspects of the sponsorship package should be explained, but leave room for the sponsor to contribute ideas as well. Sometimes a sponsor’s new knowledge of the program or university will inspire them to become more involved than you originally conceived—not only fulfilling their company goals and objectives but also benefiting the school or athletic program.
For example, when Louisiana communications company EATEL negotiated an exclusive communications sponsorship package with Louisiana State University athletics, EATEL also proposed setting up an internship program between itself and the LSU business school. This provides LSU students with valuable experience on cutting-edge technology and the company with a trained future work force.
It is of extreme importance that each element of the sponsorship package is explained in terms of how it will help achieve the sponsoring organization’s overall goals and objectives. If you are offering a large block of tickets with the package, develop a program detailing how the sponsor can use the tickets for further promotional gain. For example, if you know the company is trying to boost morale among workers, suggest that the tickets be used as part of an employee rewards system or a special company night out. It is this extra eduselling effort that adds value to the overall deal.
Now it’s time to close the deal. This is the easy part! If you’ve done a good job up to this point, asking for a decision will simply be a reaffirmation of the partnership rather than a hard sales pitch.
Once you’ve made them a partner, remember that you must continue to treat them as one. This requires you to regularly involve the sponsor in every aspect of the package’s execution, and to work closely with the sponsor through the post-sale period to identify any problems.
Finally, at the end of the contract period, you need to conduct an audit of the entire sponsorship package to identify to what extent it met the sponsor’s goals and objectives. If the sponsorship has been conducted effectively, this final meeting to present the audit is a perfect time to look ahead—and receive a tacit agreement for future involvement from the sponsor.
For more details on the LSU agreement with EATEL, please visit our Web site at www.athleticsearch.com and type “LSU” in the search field.