Aug 28, 2009 at 01:05 PM
written by Bob Burris

Pricing Your Sponsorship Opportunity

At some point you have to put a price to the proposal. Pricing is so subjective and relative to the specific market. Furthermore, many organizations struggle with sponsorship pricing because many traditional pricing methods simply don’t apply in the non-profit, collegiate and/or high school athletic world. Bluntly speaking, pricing is more art than science.

Accordingly, my experience tells me that most non-profit and athletic corporate sponsorship proposals are underpriced. There are a number of reasons for this, but the most common culprit is that most organizations set their sponsorship prices based on the amount needed to cover their costs and NOT on how much they need to make or net.

Here are a couple tips to effectively price your sponsorship:

  • Look to your neighbor-People generally want to help other people, and I have found that even though local charities, associations and sports organizations are competing against each other, most will share their information with you. Their pricing is NOT as critical as the value they provide.

  • Ask and you shall receive-If everything is equal with respect to value, your organization and audience might reach twice as many people. If so, then an industry rule-of-thumb is that you should be able to charge 65 percent more than your competitor. Even though your audience might be double that of your competitor, the value mix is usually split 35 percent to 65 percent with the former number relating to the value elements that enable the sponsor to position their products and to build relationships with your association, while the latter number refers to the aforementioned audience value.

  • Testimonial-Sponsor feedback is another method to receive pricing input. If a sponsor’s representative discloses that his company increased sales by 20 percent or that costs were reduced by 10 percent as result of the sponsorship, you can fairly easily calculate the value of those improvements and use that information to help in your pricing decisions.

    But a Word of Caution: “Don’t Give Away the Farm”

    One of the most common mistakes we see made every day is an entity so eager to make a deal that they throw everything into the sponsorship package, including the proverbial ‘farm’ and ‘kitchen sink’. Make no mistake; there is value to allowing a corporation the rights to use your organization’s logo as well as there is absolute value when you give a corporation. Sadly, too many organizations fail to charge their sponsor for these components and just “throw them into the package.” The goal must be to formulate the valuation of the assets available with your event, and then calculate a percentage reduction to add them to a full package. You need to learn when to give and when to charge. Pricing the sponsorship is subjective and relative to your specific market but you must consider its overall promotional value to the corporate sponsor.

    Bob Burris, a former sports executive now non-profit consultant and author, offers advice to organizations on how to maximize sports sponsorship with companies. His company, The Burris Group LLC, has negotiated and sold more than $100 million in sponsorship packages to a wide variety of Fortune 500 companies. "How To Sell Sponsorships, Tickets and Popcorn: A Guide to Creating, Selling and Maximizing Sponsorships for Non-Profit or For-Profit Partnerships and Athletic Programs" is a step-by-step workbook that provides sponsorship sellers with strategies and tools to finding, selling and retaining corporate sponsors. See all of Bob's archived posts here.