Natural Foods Merchandiser

Tread warily when choosing sponsorships

Selling Smart

Spring. Sap is running in the trees, bees are buzzing in the meadows and special events are popping up everywhere. From triathlons to Earth Day parades to Bike-to-Work Week, it seems that all your local nonprofits are hosting events. And they all want your store as a sponsor. ?How about a gift basket?? they ask.

?Maybe some donated energy bars and bottled water for our participants? How about a cash donation to match the contribution by Superstore Megamart down the street?? Stop. You can easily waste more money in event sponsorships than in any other area of your operations.

This is because sponsorships are often presented as the best of both worlds—philanthropy and marketing. You get to help organizations whose values you support, and at the same time you get to be more ?visible? in the community. In reality, many events are not very good vehicles for either charitable giving or marketing.

Poor Philanthropy. Even dumb charitable events (?The World Halitosis Fund?s Celebrity Noodle-Off?) can make a lot of money if they are smart about selling sponsorships. When you make a contribution as an event sponsor, you subsidize the logistics of the event more than you actually help the organization. As many as 75 cents of every dollar you give goes to print banners and show programs, to reserve event space, and to pay professional event organizers. If you want to support a nonprofit, do it by contributing to the organization directly.

Have you ever changed your purchases because you saw the name of a business on a T-shirt?
The Myth of Visibility. I am a big college football fan. I have watched the Outback Bowl several years running, yet I have never eaten at an Outback Steakhouse. Well, the TV ads for their featured fried onion do get me salivating, but that is not the same as the sponsorship opportunity. Put differently, have you ever personally changed your purchases because you saw the name of a business on the back of a T-shirt? The answer for most people would be no. To be sure, there are ways for events to change consumer behavior (see below), but visibility on a banner or signage alone is not likely to do it.

OK. With all of that blanket criticism out of the way, we can focus on what truly constitutes a ?good? event to participate in and how to maximize the results you see from your involvement.

Selecting events
Event sponsorship decisions are generally made the same way: Someone from a worthy group comes forward with a request. You generally like the organization and the person, so you say yes at the minimum possible level.

Humans generally make better decisions if we evaluate a bunch of information all at the same time. That is the reason for budgeting—we are likely to be more cost-conscious if we look at all possible expenses and make trade-offs than if we evaluate each financial decision one at a time.

So, create an event budget and stick to it. Take a look at last year?s participation, as well as all the events that never approached you. Choose a small number of events to really get behind and maybe leave a small slush fund for decisions on the fly. Then, depending on the priorities of your ownership, take some of the dollars that have been going out the door in sponsorships or gifts-in-kind and give them out as direct contributions. Put the rest of the cash savings back in your pocket. When would-be promoters come to you, you can honestly tell them there is no room in the budget this year, but that you would be happy to consider them in your annual budgeting process next year.

But how do you choose which events to put on the short list? First, think like a philanthropist, by deciding which events are most likely to advance the values that your organization cares about. Second, think like a marketer, by determining which events will let you most effectively meet your promotional objectives.

Seven-point plan for successful events

  1. Find your potential customers. What news do you have to tell that your prospects haven?t heard? Are most mothers in your town or city unaware of your organic baby food? Are most working people unaware of the killer baked goods you sell fresh in the morning? Find those events that will draw in your highest-potential customers.
  2. Reward your actual customers. A loyal customer spending $100 per week in your store is worth more than $5,000 a year in revenue to you. Show your appreciation by obtaining free passes to the Celebrity Noodle-Off and giving or raffling them away.
  3. Up the ante. Take ownership of the event or some part of it. What you really want is unabridged dialogue with your prospects who show up at an event. Instead of just dropping off some water for the ?fun run,? organize the recovery table and give people water along with fresh organic oranges while you talk to them about your other healthy training supplies.
  4. Give event participants an active experience of your store. What do you have that no one else has and that is really, really good? If you are going to give something away, give that thing away. Make the experience even more active by having the Earth Day parade start or end in your store parking lot.
  5. Give event participants a reason to come into the store later. If you pass out energy bar samples in event ?goodie bags,? make sure you attach a coupon for more discounted/free energy bars to be redeemed in your store. Include a map to your store and store hours.
  6. Get your suppliers to help share the burden and the opportunity. Of course they are inundated with requests, too. The best thing you can do is write up on one sheet of paper what the event is, why it matters and what you are looking for. Decision-making in large organizations can be complex. A document of your request can be passed around more easily than a phone request.
  7. If you pass out a coupon for a free cookie, find out how many cookies you give away.
    Track the results. If you pass out a coupon for a free cookie, find out how many cookies you give away. Now, it will not be a perfect reflection of the number of people you have influenced. There will be people who think, ?Hmm. They make cookies there. I?ll have to give that store a try,? but who don?t get around to redeeming their coupon. On the other hand, tracking does give you a means of evaluating different events relative to each other.

Ultimately, there may be a whole host of reasons why you would get involved in an event that have nothing to do with rational business planning. Your sister may be an organizer, or maybe you just think something sounds fun. Just remember: Events are neither good philanthropy nor good marketing unless you make them good.

Woody Smith ([email protected]) is vice president of The Intelligence Agency, a marketing and business consultancy in Traverse City, Mich.

Natural Foods Merchandiser volume XXVI/number 4/p. 26, 28

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