Why Sponsorship Pricing Isn't "Fair"
One of the most frequently asked questions I get in my sponsorship trainings, is how to make sure sponsorship benefits are being priced correctly. You don’t want to overcharge (or worse yet, have your sponsor decide not to sponsor you at all), but you also don’t want to leave money on the table.
Often, what my students are looking for is a price list. A simple and straightforward master list of what everything should cost.
While that would make it easy, it is not something that exists. And there is a very specific reason why.
Sponsorship benefits are not all created equal.
In fact, for some companies, a particular sponsorship benefit is perceived as far more valuable than it is to another. For example, you may give one company sponsorship benefits that will increase their brand visibility, such as signage, their name on the program, a listing on your web site, etc. It’s exactly what they need because they’re new and just getting established in your community! The brand awareness-building benefits correlate directly to their specific needs and goals, so they perceive those benefits as highly valuable.
On the other hand, you could offer those exact same benefits to another company - one that has very different needs and goals - and they may perceive those benefits as being low-value.
Since we know this to be true, then why do we tend to approach potential sponsors with canned packages and tiered pricing structures based on one-size-fits-all benefits? And why are we afraid that if we price sponsorship packages differently, we’ll get in horrible trouble if these companies talk to each other and discover one paid more than another and you weren’t being fair?
How Well Do You Understand Your Event Sponsor’s Goals?
A major reason why we tend to struggle pricing our sponsorship benefits is because we don’t really know our sponsors very well.
When researching and getting to know a potential sponsor (before you ever make a pitch) you must find out what your sponsor wants to accomplish with their sponsorship dollars. Then, you can determine what benefits would be meaningful and relevant for them. What will actually help them do more business and reach their goals? And what are those benefits worth to them? How much can they afford to spend?
This early research is so important, which is why I developed worksheets specifically for understanding potential sponsors in my course material.
There is no consistent formula I can give you when it comes to pricing your sponsorship benefits. Boy, do I ever wish there was! Because, all benefits are not considered equal by all sponsors. However, I can give you guidelines that will help.
The Price is Right!
Here are some factors to consider when it comes to assigning value to your (custom) sponsorship packages:
Consider your hard costs and multiply that by 3
How much time are you going to spend servicing that sponsor? (add 10%)
To what extent does your attendee avatar match the sponsor’s target market?
To what degree will these benefits allow your sponsor to connect, engage and influence your attendees?
How unique is the opportunity? Are you offering “can’t buy” experiences?
Are you offering exclusivity? (Even if you can’t offer full exclusivity, try to offer elements of exclusivity such as a title of an event within an event)
Are you providing naming rights?
is your organization well-known and does it have an instantly recognizable property name?
Does your event have an established track record?
What is the size and scope of your reach?
Are there a limited number of sponsorship opportunities or do you have sponsor clutter?
How much lead time are you giving them to leverage their benefits?
What will the market bear? (You may need to do some research in your geographic area and ask your colleagues)
Offer to measure probable outcomes in addition to views and impressions. What could be accomplished … could perceptions, attitudes or behaviors be changed? How will you measure that?
Bundle your benefits vs. offering them a la carte. (Your whole package is greater than the sum of parts)
If you want to learn more about how to create exceptional, high-value sponsorship opportunities that you can feel proud putting a premium price tag on (and sponsor benefits that your sponsor feels lucky to get their hands on!) enroll today in Strategic Sponsorships in 60 Days.