The Necessity of Pre-Deal Due Diligence

The trajectory for a sponsorship’s success is set before it goes live. It is where you have the greatest ability to align and aim your resources to hit your objectives. Sponsors that devote the proper thought and consideration before a deal goes live will experience more effortless success. Sponsors that fail to mitigate their risk will likely face on-going adjustments to their asset package and activation strategy while grappling with inefficient exposure.

Here is some important homework you should be doing before accepting any proposal from a prospective partner to make sure you’re getting a proper match.

So often you may find yourself reacting to sponsorship proposals that have been sent your way, rather than carefully selecting which investment would be best. Many times, the opportunities are unexpected, they can feel as flattering as they are intriguing, and they come with a degree of urgency (e.g. a competitor may have been presented with the same opportunity). Nevertheless, you need to gain control of the situation by pausing and thinking about the following before committing to a partner.

Pre-Set Sponsorship Goals

Sponsors that understand what they want to achieve with sponsorship prior to reviewing proposals make the most prudent decisions. Establishing how sponsorship intends to complement the greater marketing mix will add clarity to the selection process and minimize the potential for inefficiency and bias. It requires establishing priority marketing goals and then evaluating each opportunity’s viability to deliver against them. Common goals for sponsorship primarily include heightening mid-to-upper purchase funnel metrics from driving brand awareness to raising familiarity and favorability to ultimately increasing purchase consideration.

You should set the expectation that property proposals should be specifically built with your goals in mind. This does not necessarily mean properties should develop all bespoke assets for their partners. However, packages should be formulated in a way that feels unique to the brand and what it wishes to accomplish. More simply put, each offered asset and right should be seen as purposeful by contributing to fulfilling your goals.

The best way to ensure this is for you to provide intel regarding your goals, preferences, and concerns. It can even go to the extent of providing the KPI metrics success will be graded against. Sharing this level of detail will increase a property’s chances of securing a deal and your partnership will be better primed for success.

Ultimately, the most promising partners will emerge from the masses and your final investments can be objectively based on their merits of delivering relevant success. Leading with strategy also builds a defensible case for the investments to internal stakeholders and continuously justifying their spending into the future.

Confirm Audience Alignment

Properties must deliver potential customers to their sponsors. A property may have the most engaging and integrated sponsorship package, but if its messaging and influence is missing the mark, it can result in a wasteful investment. At the end of the day, sponsorship is tasked with driving incremental business. That only happens if it’s reaching part of a sponsor’s addressable market. You should make sure to have a well-defined target customer profile you can overlay with a property’s fan base. This way, you can determine the number of potential customers they can reach, as well as how likely they are to reach them. If you find you they can more efficiently reach a desired customer base through a sponsorship than other marketing channels and at a meaningful scale, it should initially qualify as a prospective partner.

Association Check

The greatest differentiating benefit of sponsorship over traditional advertising is its Halo Effect. By associating a property with your brand, the affinity and identity of the property’s IP in fans’ minds can be transferred to your brand’s equity. This can positively impact the entire purchase funnel. This is why we place so much emphasis on amplifying this connection through activation, which traditionally includes using the property’s likeness in supporting marketing executions’ creative. However, this is not automatic and the premium value for this benefit can only be fully leveraged if it’s done in an authentic way. Fans must believe the corporate partners are true supportive fans of the property. Depending on a brand’s category or established personality/ethos, it can be easier for some more than others. The greater the distance between the two entities, the more creative storytelling resources that are necessary to bridge the gap. For example, it’s traditionally been easier for sports drinks and sports apparel partners to feel as if they belong as opposed to property insurance or automotive manufacturers. Therefore, it is worth checking that your creative team feels there is enough creative territory to produce storytelling content that links the two entities before investing.

Conducting initial due diligence is critical to finding the right sponsorship fit. Proceeding based on feel, rather than confirming alignment can result in sub-optimal performance and wasted investment. Make sure prospective partners can satisfy these key areas before making a commitment.