How much should you pay?

How Much Should You Pay For a Sponsorship?

Too often in the world of sponsorship marketing, value and asking price seem to have little in common.

As an enlightened marketer, you must take control of this relationship and determine first whether the sponsorship is worth pursuing, and second, at what price.

Here’s my rule in determining how much to pay for a sponsorship:  You should never pay more than the value that the sponsorship delivers to your Marketing By Objectives plan.

This puts the onus back on you, because the party marketing the sponsorship generally will have little insight into your specific goals and objectives.

(That insight, by the way, may develop over the course of a long-term relationship and is one of the power tools of sponsorship marketing, when done right.)

Starting with your weighted goals and objectives, identify the value elements that the sponsorship in question could bring to the table. Then apply value based on:

• -       Reach to your desired demographics or target customers (quantity).
• -       Level of engagement with these target groups (quality).
• -       Cost and difficulty of reaching these target groups at the same level of engagement in other ways (alternatives).

Bear in mind that the fees you pay are only the beginning, and must be supported by activation, as discussed in previous blogs.

This approach puts you in the driver’s seat at the negotiating table, allowing you to craft a sponsorship package that meets your needs and your budget.

You may find that the sponsorship cost is quite reasonable, given its unique ability to deliver value to your MBO plan.

Conversely, you may find that the sponsorship is not worth pursuing at any price. In that case, both sides can move on to greener pastures.