On one hand, I’m pleased that MLSE was able to cement a deal for $800,000,000 with Scotiabank for the 20-year naming rights to the formerly named Air Canada Centre (ACC). The deal speaks volumes about the importance of connecting with existing or potential customers on their turf and legitimizes sponsorship as a vehicle to get this done. It also shows the importance that companies place on branding and how competitive it is in getting in the hearts and minds of Canadians.
Anyone who attends my workshops knows my thinking on this – the gold, silver, bronze sponsorship package “metal levels” are dead. The days when a company buys into a prepackaged sponsor benefits plan are becoming a thing of the past, yet I’m amazed at the number of organizations that continue to offer these packages as the greatest thing since sliced bread.
I recently completed an assessment of an organization’s sponsorship program and the most innovative thing they had done in the last 5 years was to add a new “titanium” level to their gold, silver, bronze, sponsorship program. Overall, they had approximately 12 levels of sponsorship with each level separated by about $500!
Prepackaged Sponsorship Implies “Cookie-Cutter”
One of the biggest problems with prepackaged sponsor benefits programs is that they imply that every company is the same, with similar objectives and want the same solutions to their challenges. And one of the biggest mistakes that organizations make is thinking that all companies want to focus on branding (i.e. logo visibility). In my experience, the range of corporate objectives is very diverse, depending on the type of firm and industry. As an example, a well-known company that is interested in increasing in-store traffic through coupon distribution will not be as interested in generating awareness as in getting coupons in the hands of patrons in a timely fashion. Conversely, a company that is new to the community may want to focus on branding and awareness because they want to increase their visibility in the marketplace.
The second problem is because many of the benefits offered in prepackaged benefit programs may be of little or no interest to a particular company, the opportunity will be viewed as less valuable, which means that the odds of you getting the financial support you want are slim. Whereas, a benefits package customized to help companies reach specific objectives is going to receive top consideration and dollar.
There are Exceptions
Prepackaged benefits programs can serve as a useful starting point for the baseline value of a sponsorship, but should always include a statement that suggests you’ll customize to meet their needs. This would imply that there is a minimum investment to participate at certain levels such as a Presenting, Major Sponsor or Supporter level, but you’ll further tailor meet their specific requirements.
You should also position these packages according to the types of benefits offered. For example, “the ultimate branding package” or “booth traffic building package” or “leadership positioning package” can be tailored to specific corporate objectives. A word of caution is that the benefits being offered need to fit the objective. The advantage of effective positioning is that for companies looking to achieve a specific objective, these sponsorships offer a bundled solution that makes it easy for them to buy-in. This approach can be very useful at industry conferences for B2B companies who know the market and have focused goals such as establishing a leadership position above their competitors. Even in this situation, you should always be ready for some customization to address their specific needs.
Ditch the Gold, Silver, Bronze Sponsorship Thing!
If your sector warrants multi-tiered levels of sponsorship, I recommend no more than 3 to 4 levels; one for the company that wants to “own” the event, one for the company that wants to be viewed as a serious supplier and one for the entry-level supporter. Unless you are a sporting competition or in the building sector, consider naming your levels that support your brand like the Canada Army Run’s Presenting, Brigade, Reg
So, instead of worrying about packaging into neat little boxes, try listening to companies and developing investment packages that they view as well thought-out and responsive to their needs. Besides having a greater success rate with prospects, you’ll also save a lot of time by putting proposals in front of people that are meaningful to them.
Join me where I’ll be discussing these and other concepts at the upcoming PACWEST Partnership Conference, October 11 and 12 in Vancouver and the Sponsorship Boot Camp, part of Sponsorship Week, October 24 in Toronto.
To support our ever-growing body of expertise in this area, our firm conducted a national survey in February this year to get an overall snapshot of Naming Rights activities and practices among Canadian Municipalities. This and other information collected through the survey will be discussed in greater detail at the 3rd Annual Municipal Forum on Sponsorship on November 7, 2013 at the Grand Hotel and Suites in Toronto. Here are some key findings from the survey:
Survey Respondents Overview
A total of 41 Surveys were completed. Responding municipalities included those from Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Prince Edward Island and Saskatchewan. Ontario had the highest representation at 21 responses, with 65% from larger municipalities (over 100,000) and 35% from smaller jurisdictions. The responses were roughly split between larger and smaller municipalities.
- 63.4% are currently actively involved in seeking Naming Rights sponsors
- 66.7% of respondents that are not currently actively seeking Naming Rights sponsors are considering it in the future. 26.7% were “not sure”.
Types of Facilities
Naming Rights are applied to a wide range of facilities including: Arenas, Banquet Halls, Bocce Courts, Ball Diamonds, Childcare Facilities, Community Rooms, Convention Centres, Dressing Rooms, Fitness Centres, Libraries, Meeting Rooms, Pools, Recreation Complexes, Soccer Fields, Skateboard Parks, Skating Rinks, Sports Field and Theatres.
Naming Rights Terms
- The most common term for Naming Rights agreements is “In Perpetuity” (37.7%), with the next highest term at 10 years (24.4%) and the third highest at 5 years (15.5%).
- 66.7% of respondents feel that the ideal term for Naming Rights agreements is 10 years; with 14.3% indicating 5 years and 20 years.
Naming Rights Policies
- 71.4% currently have a Naming Rights Policy.
Use of Internal Staff / External Contractors
- 66.7% of municipalities use Internal Staff to market and sell their Naming Rights opportunities.
Of the 33.3% that use External Contractors:
- 60% use a combination of Retainer and Commission to compensate contractors
- 40% use straight Commission
- the most common Commission Rates are 10% and 20% (both at 40% of respondents)
- 88.2% report that Council Members are involved in the Naming Rights process; either by referring potential Naming Rights prospects, attending meetings with prospects and/or approving Naming Rights agreements.
The money received through Naming Rights is allocated in a number of ways:
- 17.6 allocate the money to a General Revenue Account
- 41.2% use the money to Improve/Enhance the facility
- 41.2% use a combination of Revenue Account and Facility Enhancements
This survey confirmed our ongoing research that sponsorship revenue development is gradually being integrated into municipal operations as municipalities grapple with the challenges of “doing more for less”. The Municipal Forum on Sponsorship will address many of the issues faced by municipalities as they consider their approach and options and will give attendees a chance to speak to other municipalities from across Canada who are facing the same challenges.