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Sponsorship Pricing: More Art Than Science

By Paula Beadle

Determining the value of a sponsorship program continues to be one of the greatest challenges of sponsorship marketing. I am taking another look at this complicated topic and sharing new thoughts and observations. At this year’s Sponsorship Mastery Summit, we are going to “Bobby Wagner” this topic.

Through conversations with prospective clients and industry leaders, I’ve discovered many people believe the key to selling sponsorships is understanding the value of their assets and proposals. There’s a prevailing thought that if we know how to price it, we can sell it. In reality, the key is having a sales process, a supportive culture, a smart plan, the right talent and property, and an audience that companies want to align with. A price tag is meaningless.

Many smart people have addressed sponsorship pricing by developing models to help create a framework for it. These models are reminiscent of Willy Wonka’s Everlasting Gobstopper machine—toss in all the ingredients and a colorful price spits out on the other end. Over years of selling and buying sponsorships, I’ve learned that there is no mathematical equation to determine the fair market value of a sponsorship. And like a gobstopper, once you toss out a number, it never goes away. There is no magic formula. 

The value of the sponsorship resides in the benefits of the partnership, the skills and experience of the seller and the buyer, the market conditions and comparable properties, the audience alignment and strength of the brand, and the current investment levels. All of these things drive the price. You determine your value. 

I am an advocate for developing a framework so you can clearly explain how you arrived at the proposed price. Regardless of your pricing methodology, what’s important is that you have one. But what’s more important is that you have price integrity. Pricing sponsorships is more art than science.

A few points for you to consider when creating your framework:

Art vs. Science - Sponsorship Pricing Strategies

Establishing value for your sponsorship program begins with the first interaction that you have with a potential sponsor. How you approach the process will establish your worth and the value of the property you represent. Your ability to ask smart questions to understand the sponsor’s objectives and create a program that will support those efforts is the most critical component.

Here are a few best practices when establishing value:

  1. Ideas and experiences drive value, not logo placement and signage.
  2. Customize every proposal to connect with sponsors brand and goals.
  3. Be prepared to explain how you arrived at the price.
  4. If you reduce the price, reduce the benefits; if you increase the benefits, increase the price.
  5. Preparation goes a long way—it may take some time, but a good pricing strategy will improve your performance.

If you need help navigating the process, contact us. I’ll dig deeper into this topic during my “Identify, Price and Package Your Assets” session at Sponsorship Mastery Summit.

Registration Closes This Friday

Sponsorship Mastery Summit takes place September 25-26 at the Hyatt Regency Lake Washington and features industry experts facilitating intensive and interactive sessions for mastering the art and science of sponsorship. Participants collaborate with thought leaders, hear from big brands, explore new ideas, and leave with a simple sales plan, an improved story, sponsor leads, a sales process, best practices and new connections. The learning and exchange continue online for three months with webinars and information on the most relevant and important topics key to sponsorship success. Learn more and register here.

About the author: Paula Beadle is the president of Caravel Marketing. She is a results-driven trailblazer with a proven record of creating order out of chaos. Paula has helped numerous organizations discover and achieve their goals by developing and managing innovative sponsorship initiatives, generating incremental revenue, and successfully coaching thriving teams, executives and boards.