Why the sponsorships?

As a business owner, manager, assistant, or many other titles, you’ve probably been approached to sponsor something. I’ve heard of opportunities to sponsor cheerleading teams, mission trips, vehicles, charity events, performances, outdoor events, etc. The list is endless, but the same question always comes to mind first: why should I sponsor something?

First, we need to identify a sponsorship opportunity. When you are asked to sponsor something, you should be given something in return. Most endorsements return logo placement, name mentions, product placement, or something like that. Regardless of what you receive, you must receive something of value to be considered a sponsorship, otherwise you must not consider it at all or it is just a charitable donation, such as in sponsoring a church mission trip.

There are several reasons to participate in sponsorship opportunities. Sponsorships are part of the marketing plans for all types and sizes of companies.

Reason # 1: Exposure.

Exposure is just another word for advertising, but a sponsorship ad is not like other “ads.” A sponsorship allows you to advertise your name or company without fighting the natural tendency of consumers to exclude you. In fact, consumers are more likely to allow you to enter their consciousness through sponsorships because you have now been linked to an event, idea or place that the consumer already has an interest, so you too may be of interest to them.

Exposure in the community is also vital to the success of any business, especially smaller businesses. By taking advantage of sponsorship opportunities in your community, you gain recognition and credibility within your local market. Businesses that rely on customers close to their location will find exposure in the community almost invaluable.

Reason # 2: Contacts.

When you sponsor something, you have established a business contact. This contact can be a lead, a referral, or a vendor. Throughout a sponsorship, you generally develop or strengthen a business relationship that can and should prove useful at some point. Years ago I learned that all the people with whom I do some kind of business are good contacts. The better you develop your relationship with your contacts, the more you will do for each other.

Contacts also arise from the event, the activities surrounding the event, networking opportunities, etc. If you’re sponsoring an event, which is what I recommend you use most of your sponsorship budgets for, you usually get free admission, VIP passes, or the like that would allow you to network with potential clients. You also get in touch with other sponsors who may be potential clients. You need to be careful when sponsoring things that include direct competition, therefore other sponsors must be valuable in some way.

Reason # 3: Sales opportunities.

Once you’ve signed up for a sponsorship, use it to generate sales. By sponsoring an event, you already have one foot in the potential customers, and this leads to potential sales. Structure advertising campaigns around sponsorship if possible. Look for cooperative opportunities with the sponsored organization, person, place, or event. The first reason given for endorsements was exposure. Exposure, like any other advertising and promotion, is useless if it doesn’t generate sales. Even if it doesn’t directly generate sales, it must be beneficial to your business.

Reason # 4: Give back.

Sponsorships are often requested for events or charities. Whether it is a sponsorship opportunity or a charitable donation, this is often the result of a reward. I have committed to sponsorships that provided some exposure, some sales, and some networking, but in the end I saw it as an opportunity to give back to the community and to those who have helped me get where I am. I once read that to receive and benefit you have to give back and I think it’s true. Even the most timely sponsorships are a way to give back, especially if it’s for a charitable reason.

Reason # 5: Tax Cancellation.

Once you’ve decided that a sponsorship opportunity is right for you and make your contribution, you’ve created an expense. Just as advertising expenses are deducted, so are sponsorships. Even if the sponsorship is a charitable donation, it is a cancellation. Be sure to include this expense in the expense column.

If you are in a position that receives sponsorship requests, pay attention to them, especially if you are also in charge of advertising and promotion, and if you are not, get the person who is involved. I know you will filter a lot of requests and see a lot of “opportunities” to sponsor things, but some may pay more than thousands of dollars spent on advertising or promotions. Also, you may find this to be a great way to structure a mini-ad campaign.