Here’s How We Teach Brands To Measure Their Sponsorships
Sponsoring a sports team, charity, event or other organisation which our ideal customers are passionate or interested in, can often provide us with a powerful marketing channel to add to our toolbox.
For many of us who invest in sponsorship we often find ourselves under pressure by higher management or the board to show some tangible returns on that investment.
Then, when budgets get cut and the business is going through a tough patch or is needing to find cost savings, normally one of the first things to be preyed upon or looked at with a magnifying glass is the company’s sponsorship portfolio.
It’s about this time the sales reps in the organisation will lick their chops and start saying things like ‘we bring in money and all you do is spend it’ in an attempt to protect their own budgets.
It’s not surprising given the sometimes seemingly intangible nature of sponsorship.
How can we manage those conversations better and how can we back it up with some meaningful metrics to not only keep our sponsorship budget, but also potentially grow it?
Today we’re going to explore how to measure return on sponsorship investment to ensure you’re better equipped for protecting your budget and your sponsorship turf within the organisation.
1. Know your attribution metrics
In order to understand how to identify meaningful measurements of your sponsorships we highly recommend learning to understand the attribution metrics which make up certain parts of your business as a great starting point.
For example, a car company may attribute dealership visits and test drives as a key metric to selling cars. Let’s say they know people who complete these two steps are 80% more likely to purchase a car. Or perhaps for every 10 people who test drive a car at least one person will purchase it.
Or, for fast mover consumer goods such as food products, they may attribute uptake/sales of a new product to the amount of samples they can get into the hands of potential customers as a way of measuring the success.
For selling a membership/subscription, a company may know that getting people to trial the service is an attribution towards selling the service e.g., for every 10 people who sign up for a trial subscription 2 will go on to become paid customers.
Customer satisfaction may be attributed to various feedback or surveys your company conducts.
Staff satisfaction surveys may be an attribution to staff retention and motivation.
Your score on a reputation index, or recall survey may be an attribution towards brand love.
For communicating via email, you may use open rates or click through rates as an attribution towards sales.
There will be attribution metrics for pretty much every organisational objective or goal. Otherwise, how would your company know how to achieve those goals/objectives?
Once you understand the attribution triggers to certain outcomes within the business then you can start focusing on achieving or impacting those attributions through sponsorship.
You can then build comparisons against traditional marketing campaigns which seek to influence attributes within your business e.g., How many samples, test drives, opens, increase in brand index did you achieve through this sponsorship compared with a standard marketing campaign your company may be running to achieve the same thing? In many cases, sponsorship related activities of this nature will outperform the traditional campaigns.
Once you’re positively impacting the attribution metrics which align with achieving organisational objectives you then have a much more powerful business case with the numbers to back it up.
2. Make it about return on objectives
If you look at sponsorship from a purely transactional standpoint e.g. we paid $xx for this sponsorship and need that sponsorship to create $xx in direct sales, then you’ll likely struggle to draw a straight line to showing that outcome.
Also, not all objectives within a business are about hard sales, such as staff retention/motivation, uptake of technology, showcasing new features, customer satisfaction and retention to name a few.
Only looking at sponsorship through a return on investment lens versus a return on objective approach is a very narrow approach while often setting yourself up for disappointment.
But, if we go a little deeper using the methods mentioned above in section 1 of this article then we can start to show the impact we’re having on the business objectives.
When you explore sponsorship for your organisation you should always be looking for sponsorships which align with helping with the overall company goals/objectives.
Maybe you have goals to attract top talent, or to drive more sales online, or maybe it’s to engage better with a new market, or retain top clients/staff. Whatever it is, it should always relate back to these.
Almost everything within your organisation will have attributing factors, which if completed will deem that particular goal as having been achieved, or as having accomplished a successful outcome.
For example, if we use ‘driving more online sales’ as a metric, it’s fair to say that if you have the correct contact details for your current clients such as email address, age, phone and which products they’ve purchased, this will likely lead to greater online sales.
When you have this information and it’s correct, you can send timely email marketing campaigns, you can call them when you know their plan is due to expire, you can send sms messages or push notifications and so forth. All of which will drive more online sales amongst current clients.
Therefore, we could deduct that getting current customers to update their contact details with you is an attributing factor to ‘driving more online sales’.
In this example you’ll also be able to take a sample of customers to compare how much on average you earn from customers with correct details vs customers with incorrect details.
Using sponsorship to incentivise or facilitate the updating of customer’s contact details online is a fantastic promotional technique (e.g. free tickets in exchange for updating details).
Here’s a hypothetical example on how this could be measured while tying it into objectives: We ran a sponsorship promotion where 1,000 customers updated their contact details. We know a customer with correct details is worth $50 more on average per year, therefore we increased online sales by $50,000.
The best part is, everything we’ve mentioned so far is measurable e.g. open rates, uptake of products, share of wallet and so fourth.
You’ll notice we didn’t talk about how the sports team we sponsored sold products on our behalf, or how we magically increased sales because of improved brand perception.
We focused on an organisational objective (drive online sales growth), how we contributed to that objective using sponsorship (free tickets for updating contact details), and we worked out how much that was worth to the business (customer with correct details vs customer with incorrect details worth more to the business).
There are more creative ways of using sponsorship to impact objectives, but the key is to focus on objectives vs solely sales. Once you understand the attributing factors to the success of those objectives and how you’ll use sponsorship to impact them, then you can measure and demonstrate some pretty cool returns.
3. You’re probably already measuring some useful metrics – Use them
Chances are, your company is already measuring a number of marketing outcomes via your normal marketing channels.
From experience and studies we’ve read, sponsorship related content and initiatives tend to outperform standard brand/product or business as usual related initiatives. This is why we love sponsorship!
As a general rule of thumb, we recommend comparing results from sponsorship related activities vs non-sponsored activities. Here are a few non-exhaustive suggestions:
– Sponsorship related emails vs standard brand emails for open rates, engagement rates and replies.
– Branded social media posts vs sponsorship related posts for engagement and response.
– Share of wallet from customers who are interested in a particular sponsorship you invest in vs customers who aren’t interested in those sponsored activities.
– Sales on sponsorship related product sales vs standard sales of the product e.g. All Blacks branded beer vs your normal branded beer.
– Retention rates and satisfaction rates of customers or staff who have participated or benefited from your sponsorships vs those who haven’t.
There are probably plenty more things within your company you can measure. Get creative, and also feel free to create new measurements.
Haven’t got anything like this already? Create them.
4. Conduct experiments
If you’re reading this thinking ‘this all sounds well and good if we actually did any of the stuff you’re talking about there bucko’, then you’re not alone.
It pays to remember that all of the techniques we’ve mentioned above once didn’t exist either. This means, at some point in time someone within the company decided to create them, or start doing them (hint hint).
If you need to figure out what to start measuring first, or you’re business isn’t over the moon about going full steam down this path, then run some experiments.
Not sure what a good benchmark is? Set one and reflect on the outcome to improve it for the future. Was it too easy? Set a higher target. Was it too ambitious? Set a lower target.
If you’ve never measured a sponsorship related email vs a branded email – trial it. You could even run an experiment with a smaller sample size of your customers just to get proof of concept.
Never measured satisfaction rates of customers or staff? Try it.
Never ran a sponsorship branded product before? Give it a go.
The point here is to get creative.
You’re always going to have internal battles or conversations around budget and sales etc.
The best thing you can do is equip yourself with tangible numbers and results which help paint a beautiful picture in your favour.
Drawing it back to objectives and being able to back it up with measured results is always going to be tough to argue with.
Completing the steps in the article will mean the next time you’re having tough budget discussions and Dennis or Cathy from sales smugly pipe up to tell the CEO they make the company money and you don’t, you can politely paint a picture about all the ways you’re contributing to the success of the company while finishing with a big ‘In your smug face Dennis and Cathy’ look in your eye.
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