Executing Sponsorships in China: Lessons I've Learned
Yesterday we heard about an interesting new sponsorship opportunity/idea. The Bird's Nest, the main stadium of last year's Olympics, is set to auction the rights to name its 80,000 seat backs for the Italian Super Cup game which will be held on August 8, the first anniversary of the Olympics opening ceremony. In the spirit of this, Kevin Hanft offers up some tips on what it takes to execute sponsorships in the PRC.
I’ve had the opportunity to work two major sponsorship events in China. In doing so, I accumulated an appreciation for a very different way of doing business. It requires great patience, a broad perspective and time - things which most Western brand marketers are chronically short of.
The 2008 Beijing Olympic Games were expected to ‘open’ up China as a market for a range of sports and other commercial ventures, only to be blunted by the global economic decline. The great success of the country as a host and event planner will no doubt lead to future activities. For those who will take the plunge, I offer up a few thoughts and guidelines.
1. Understand the Sources of Power & Relationship: All things lead to the Government
• Obtain the maximum government support possible
– It can make things easy or hard, and is mandatory in executing anything significant• Be skeptical of anyone promising government connections
– “Guan Xi”: everyone in China has “relationships”– Before investing time and effort, identify the key players and true power • Try to Understand where real power lies
– Many and often confusing government layers
– Decision-making sources are not always intuitive• Don’t look for direct government intervention in commercial
2. The Law & Contracts: Chinese Solutions Abound
• The government is the law in China
– It is not unusual to learn that laws have ‘changed’ or that the Chinese were ‘unaware’ of existing law in conflict with agreed to contracts3. Negotiating in China: “Hidden Signals & Time”
• Be attuned for hidden messages
– Not always a straight line from Point A to point B• Negotiation is Never Over
– Signing contract is often prelude to negotiating terms• Face to Face Negotiation is Expected
– 90% of negotiation is done in person
– Don’t rely electronic communication until you close the deal
– Written correspondence should be formal in nature• Time and deadlines are often used as a negotiating
4. Chinese Business Customs: “Protocol is Paramount”
• Be sensitive to the importance of protocol and ceremonies
– Be sure to have a hierarchical negotiating team
– Titles are critical; only send an “equal” to deal with government officials
– Anticipate and follow the formal Chinese protocol on seating, writing and gifting
– Understand the Chinese sense of national pride
5. The Importance of Legacy
• So they can develop skills and expertise, Chinese want to be as involved as possible in an event
This list is far from exhaustive, so also strongly suggest that a local business partner is needed. The cultural issues, unspoken rules and business style are so very different from any other country they cannot be mastered quickly.
Of the above, the importance of time and perspective. Things just do not happen quickly (unless the Chinese government is running it) and you have to plan for something totally unexpected to happen. Also, don’t be surprised by a previous agreement to suddenly be reversed, with no warning or explanation.
My experiences in China have provided many long lasting memories. It is a wonderful country of striking contrasts and awesome scale. It affords many opportunities and potential for wonderful things. Good luck and best wishes!
Kevin Hanft is principal at Marketing Leverage LLC and has 20+ years experience practicing strategic marketing and communications for brands such as AT&T, Avaya, Johnson & Johnson, Lucent and Mayo Clinic. Most recently, Hanft was VP Global Account Director at IMG developing and executing global marketing programs for the 2008 Beijing Olympic Games. Hanft's insights can also be regularly found at http://kevinhanft.blogspot.com.
Photo cred: Lim CK via Flickr