During the 2021 Superbowl, big-name companies like Budweiser and Pepsi paid more than $5 million to sponsor a 30-second commercial slot! For small businesses, we understand that this number is way outside of your budget; however, this doesn't mean that you should completely disregard the idea of sponsorships. While you don't have to sponsor national sporting events, many smaller sponsorship opportunities can help you achieve your goals.
Small businesses should sponsor organizations and events to associate their brand values with other companies. This affiliation introduces businesses to more customers and provides brand visibility.
Nevertheless, we have seen many companies make mistakes by sponsoring the wrong organization or overlook sponsorship opportunities that could have helped them achieve their marketing goals. Therefore, before considering a specific sponsorship opportunity, we recommend that you ask yourself these key questions to assist in your decision-making.
How will this sponsorship help you achieve your overall business objectives?
The first step to finding a beneficial sponsorship opportunity is to consider the best possible outcome. For example, are you looking to showcase your brand values, grow your brand's audience, display products? On the other hand, maybe you're looking to entertain clients or engage with the local community. Either way, consider how a specific sponsorship will advance your business goals.
How does this sponsorship align with your target audience?
Some companies believe that sponsoring every event will help them reach the right audience; however, this is a waste of time and money. When looking to sponsor an organization or event, look at the participants, size of reach, and your ideal customer profile. Those seeking sponsorships most likely have collected data on their audience from past events (or from their membership, donors, volunteers, etc.), which you can request to help inform your decision. Sponsorships aren't necessarily about how many people you can reach, but it is about reaching the right people.
How does the sponsorship align with your brand values?
By committing to sponsorship, you are using another organization's platform to share your promotional message. Often, businesses do not research before committing to a sponsorship; potentially, damaging their brand and misusing their budget. In addition, companies can accidentally send mixed messages when sponsoring the wrong event or organization. For example, you would expect to see a vegan restaurant sponsoring a Beer and BBQ festival because it contradicts their brand values.
It would be best to look at the organization's social media accounts and online reviews to ensure they are respected. If they have negative comments, then stay away from working with them. You wouldn't want your brand attached to the following charity investigated for fraud.
How much are you willing to spend?
Most small businesses don't even view sponsorships as a potential marketing tactic because of the perceived high cost. For this reason, many small businesses do not even set aside a budget for sponsorships. Instead, they consider sponsorships as they come.
Many local events and organizations like schools, clubs and parades welcome sponsorships for an affordable price. In addition, these opportunities are often in local markets, making them ideal for small businesses wishing to reach potential customers. Since these events likely occur on a repeating calendar, a business owner can plan and set aside an appropriate budget.
What does this sponsorship package entail?
A formal sponsorship package should consist of a proposal letter, multiple sponsorship levels with detailed descriptions of benefits, a contract, and ideally, a valuation. While larger organizations and events will likely have a formal sponsorship package, many smaller organizations will not. Try to find sponsorship opportunities with a formalized package, or else you'll need to make a more significant effort to ensure a return on your investment. Regardless, it is your responsibility to hold organizations accountable for their obligations to their sponsors.
When used correctly, sponsorships are an effective way to reach a target audience and create brand awareness. Every business is unique in size, audience, budget, and location, so consider these steps when selecting the appropriate sponsorship for your business.
If you need help evaluating different sponsorship opportunities, please contact the Absolute Marketing Solutions team to speak to one of our experts.