Transactional Sports Sponsorships are Shortsighted
Many sports teams’ new business and sponsorship groups create packages, show up to a first meeting with a brand and basically say, “Buy this stadium sign, media and logo rights.” This purely transactional approach is an archaic way of doing business in the sports industry. Teams sell these assets to recognize revenue, but that is not what the business of sports sponsorship is about. The assets should be part of an overall program created to help brands drive customers to their products or services.
It is impossible to accomplish that desired result when meeting with a brand just once. The team has to invest time learning about a brand, their goals, and their philosophy of how they operate and want to be perceived by consumers. That involves building a relationship between the executives of the team and the brand, which requires an informational give and take. Probing questions and discussions must occur to gain a full and clear picture of what is necessary to achieve the desired result – driving consumers to the brand.
Once that occurs, and an appropriate program is created, it is imperative that the activation of the program is executed to the fullest and that the brand allocates the proper resources to the program (money, people, and time). When it comes to a financial commitment for activation of a sponsorship, the brand should dedicate three times the investment of the sponsorship itself. This level of financial commitment is necessary to effectively bring a sponsorship to life.
It is not only a brand’s responsibility, but also the team’s obligation to ensure the activation budget is sufficient to support the program purchased by the brand. Even if the team does all the right things during the creation and closing process of the program, they still fall short and revert to a transactional deal if, once it is closed, they do not participate in making sure the program is executed to the fullest. Teams that approach sponsorship in a relationship-oriented manner will secure long-term deals and renewals, leading to much more revenue than with a transactional approach.
Lou Imbriano serves as President and CEO of TrinityOne, a sports and entertainment marketing company specializing in maximizing revenue generation and brand awareness for sports teams, athletes and companies. Before TrinityOne, he served as Vice President and Chief Marketing Officer of the New England Patriots and Gillette Stadium for nine seasons and Chief Operating Officer for the New England Revolution for three seasons. Lou offers running commentary on the TrinityOne blog and allows us to publish it here when the subject fits.