Determine Sponsorship Investment

Determine Sponsorship Investment

Jim Richards

CEO & Founder of The Market Share Group

When you start building your sponsorship program, you need to determine a total budget. There is an activation budget and a sponsorship budget that make up that total number. It is important to build out your activation plan first. Then, determine how big your sponsorship needs to be in order to effectively execute your activation plan.

Be responsible with your investment, but do not be cheap! Fans know the difference between who is truly committed and who is trying to get by doing as little as possible. In addition, rights holders have a good sense of their market value. Negotiate, but do not ask them to take a significant hit on their pricing model. Too small of an investment may prevent them from delivering value at a high level. Be a good partner.

You may not be able to afford the naming rights on a stadium; focus instead on an in-arena experience. If you cannot afford a full season with a NASCAR team, identify key race markets and sponsor specific races. Work with the rights holder to determine a value equation that works for you both. You want your partner to be successful and they want you to stay around a long time.