At a glance:

This paper explores five observations about major sponsors and their relationship with their key properties:

Global and major brands have clearly defined marketing objectives and strategies designed to reach, communicate to and with, touch, involve, engage and persuade their target market. Sponsorship is now one, but important, element in the marketing mix to reach these objectives.

Sponsors expect more of properties and rights holders than in the past. In today’s World they do not want properties to simply act as just a “supplier” and sell them their stock, off-the-shelf product that they offer to all potential sponsors. They are not interested in just standard logo and signage type assets that only provide visibility, but instead seek innovative methods of touch and engagement that will enhance the experience and “stickiness” of their sponsorship.

Sponsors are looking for sustainable partnerships where properties become “strategic partners” and work with them in the same way as their other marcomms agencies and professional services partners – advertising, PR etc. - helping to contribute to the success of the brand through a deep understanding of the sponsor’s specific business needs.

Research indicates that not only is there a lack of open communication between sponsors and rights holders, but that many in their organisations do not understand the benefits of sponsorship.

Whilst there is a wealth of quantitative information to evaluate the effectiveness, impact and return on investment of sponsorships, there appear to be serious gaps:

o The qualitative research and stakeholder feedback areas are the most important, but least undertaken. o Evaluation of the relationship and partnership, with agreed KPIs and performance reviews, is rarely

undertaken o There is a need for a “whole-of-sponsorship” evaluation tool that pulls together both the quantitative and

qualitative measures for ROI and ROO, as the basis for mid-season or annual review meetings.

Relationships – the third “R” in driving sponsorship performance and value:

The journey to a sustainable “strategic partnership”, using performance management techniques and on-line tools for “Whole-of-Sponsorship”

reviews that include evaluation of ROI, ROO and the relationship.

By Ron Latham, Managing Director, Latham Consulting

Daniel Rowlands, Partner, Performware

Relationships – the third “R” in driving sponsorship performance and value: The journey to a “strategic partnership”

Gone are the days when sponsorship decisions were made for emotional attachment and friendship-based reasons, without any real assessment and thought about brand “fit”.

With the evolution of sponsorship and the addition of support promotional activities designed to leverage and maximise the sponsorship investment, effective control has moved from the boardroom and “C” suite, to the professionals in marketing and sponsorship departments. Today, with the advent of major Global and National sponsors with large and specifically targeted sponsorship portfolios, many sponsors want their properties not to just sell them standard assets and activation packages, but to become a “Strategic Partner” and “business builder, helping to optimise their revenue through an understanding of their specific business needs and delivery on their Return on Investment and Return on Objectives needs. Sponsorship in the marketing mix Global and major brands have clearly defined marketing objectives and strategies designed to reach, communicate to and with, touch, involve, and persuade their target market. Sponsorship is now one, but important, element in the marketing mix to reach these objectives. As sponsorship has moved out of the Boardroom (away from the Chairman and his wife) and into its own area within today’s professional marketing department, it has become far more than just writing a cheque to the property. Marketers and their sponsorship team now see the sponsorship as a “Product” and an extension of their brand, with the core asset being the property and what it can offer in terms of a ‘fit” with their target market, wrapped up in all the activation and promotional leverage opportunities used to maximise its exposure, reach and engagement. Sponsorship is a critical part of the marketing mix that provides a “rifle shot” to reach their target market, as against the “shotgun” effect of mass media like TV, print and radio advertising. But sponsorships also compete for a share of the sponsor’s advertising and promotional budget that is both fragmenting, with the emergence of new digital and Internet-based channels, and shrinking under pressure in these challenging economic times. (Total 2011 Ad spend was down 1.4% on 2010).

Partner relationships Properties understand that to sponsors they are simply a supplier of one of many media options available to reach their target audience and consumers. Sponsors, particularly major sponsors, expect more of properties and rights holders than in the past. In today’s World they do not want properties to simply act as just a “supplier” and sell them their stock standard, off-the shelf product that they offer to all potential sponsors. They seek sponsor innovation, with specific benefits and assets that will add value to their sponsorship and provide a real competitive advantage and a unique positioning, to help them stand out in a cluttered marketplace.

Now, sponsors are looking for sustainable partnerships where properties become “business partners”. In keeping with their professional dealings with other media mix suppliers, the relationship between key sponsors and properties has developed from a “Seller-Buyer” one to that of a partnership, with agreed KPIs and performance evaluation reviews, helping to contribute to the success of the brand through a deep understanding of the sponsor’s specific business needs.

From “Supplier” to “Strategic Partner” The evolution in sponsor/property relationships from being just a “Supplier” to “Sponsorship Partner”, to that of a “Key Sponsorship Partner”, then to a “Strategic Partner” is beginning to take hold as more properties and their sponsors embrace the twin pillars of Return on Objectives (ROO) and Sponsorship Performance Management (SPM). Sponsorship evaluations and stakeholder feedback surveys, with “whole-of-sponsorship” KPIs and 360⁰ feedback, can measure and capture both quantitative and qualitative ratings and, using the two-dimensional matrix below, can map the position and journey of each sponsorship.

The partner journey from Supplier, to Sponsorship to Key Sponsorship, then a “Strategic Partner” is a Win: Win for both sponsors and properties with a focus on working together to fulfil their joint objectives. It can be tracked through four stages, dependent on how their performance is rated by their key sponsors: Early: “Red Zone”; Low performance ratings; New

sponsorship; Low involvement and activation; Logo only; Strictly transactional, occasional relationship;

Efficient: “Orange Zone”; Below average ratings; Moderate importance to sponsor; Some activation; Regular contact (one point); Proficient in product capability and relationship; Delivers results;

Effective: Average/above ratings; Proven product capability - flexible, innovative; Growing importance to sponsor; Key account rep main contact, frequent contact; Strong results, added value.

Excellence: “Green Zone”; High ratings; Proactive, understands their business; Critical to marketing mix; Strong relationship, multiple touch points; Works closely with sponsor to achieve objectives.

Is the journey really necessary? For sponsors, the answer is absolutely “Yes” - to enable them to build competitive advantage and drive value. For properties, the Pareto principle will be a deciding factor: they will need to make the journey with their major sponsors (the 20% that account for 80% of their revenue) and the lessons learned will benefit and help retain other sponsors.

“Strategic Partners” With the evolution of the sponsorship relationship and journey to that of a “Strategic Partner”, what new capabilities will sponsors demand of their properties and rights holders? How will the dynamics of account management need to change?

Rights holders will need to focus on two key areas to enhance sponsorship performance and improve their relationship with sponsors:

Customer focus: They must adopt a customer focus culture with a more agile, responsive organisation that responds to specific sponsor needs. Some may require a dramatic paradigm shift in how they select, manage and sustain their account management teams.

Many must change their culture, people, relationships and processes to elevate customer focus to the level of importance demanded by the sponsor organisation (particularly marketing and brand management) to drive and maintain mutually beneficial relationships.

Broadening skills and capabilities: Key account managers may lack the client management and analytical skills required to build and maintain the relationship and need to become more broad-based in their business capability.

To improve performance in this area, account managers and teams must better understand the sponsor’s business and shift from a focus on “selling sponsorship” to a focus on “addressing their requirements”. They will need to develop new skills which will enable them to meet shifting needs with greater agility and impact. At the same time, however, traditional relationship-building and sales skills will still be important. The key will be to develop business management skills, while maintaining strong sales ability, to benefit the rights holder in the long run.

Managing complex sponsor relationships Sponsor relationships have evolved from “one point-of-contact” between the rights holder and sponsor to “multiple points-of-contact”, often coordinated by a key sponsor account manager who orchestrates the activities of the rights holders’ team.

The sponsor account manager will often work across the organisational matrix. To help them perform this role more effectively, rights holders will need to seek ways to provide their account managers with a holistic view of all sponsorship activities, including access to information.

It is vital to establish personal relationships with all levels and touch points within a sponsor’s organisation, so that even if key people leave the organisation, relationships continue at other levels and can be used to leverage and build relationships with new people.

Sponsor Engagement and Communication Research indicates that not only is there a lack of open communication between sponsors and rights holders, but that many do not understand the benefits of sponsorship.

85% of sponsors and 77% of rights holders agree

“There is a need for more open communication between sponsors and rights holders”

It is important that properties and rights holders be proactive with communication and engagement strategies with their key sponsors, whilst sponsors need to reciprocate and keep their partners informed of other brand activities that might impact on, or complement the sponsorship.

46% of sponsors and 38% of rights holders agree with the statement “the benefits are not well understood in my organisation”, indicating there is a need to communicate and share success by both parties.

Both issues gain in importance during challenging economic times and may put the sponsorship at risk. The Economy The continued tough economic outlook for the next few years presents properties and sponsors with both significant challenges and opportunities.

For properties, their key challenge is to retain their major sponsors, through driving their partnership even harder to deliver on a sponsor’s objectives.

The objective for maintaining a sponsorship investment over time is to build an association between the sponsor and the property in the minds of consumers.

Sponsors wish to retain their competitive advantage and build on the brand equity and association gained through the sponsorship. History shows that smart brand marketers who can maintain their advertising and promotional spend during a downturn actually increase their share of voice, visibility and top-of-mind awareness, whilst those who cut A&P budgets suffer declines which make it difficult to catch up when the economy improves and budgets return to normal levels.

The challenge for sponsors, in assessing whether to continue their commitment, is to demonstrate that the sponsorship achieves their objectives and that this is well understood within their organisation

“For knowing afar of the evils that are brewing, they are easily cured. But when they are allowed to grow until everyone can recognise them, there is no longer any

remedy to be found.” Machiavelli

Sponsorship Evaluation – The business case Rights holders, event owners and sports organisations, are businesses and need to regard their sponsors as strategic partners and treat them as if they are key account customers and they are suppliers. They need to build relationships and provide added value so that sponsors may build on the sponsorship with support activities that link and extend the visibility of the association and their brands. In order to build the strategic partner relationship and retain sponsors, they need to work with their sponsors to undertake regular evaluation of the sponsors’ satisfaction with the sponsorship and whether it meets their objectives. For rights holders there are important benefits from sponsorship evaluation, i.e. to:

Better understand the needs and expectations of sponsors in order to work with them to meet their objectives

Ensure their relationships are strong and the benefits well understood at all levels in the sponsor’s organisation

Demonstrate they deliver ROI for brands, with success stories to attract and retain sponsors

For sponsors, sponsorship evaluation is about performance management of their investment in order to measure ROI and support the business case for its continuity. In their sponsorship evaluation process, sponsors should undertake a formal evaluation at the end of the contract period and, where the activity covers a season, a mid-season review so that any issues may be identified and discussed, with improvement plans agreed and actioned

Sponsorship Evaluation – Importance 2010 research by Repucom, in the Sponsorship Outlook Survey, shows that Key stakeholder feedback is seen as the most important performance measure, with 99% seeing it as either “Extremely, Very or Quite important. Seven of the eight other measures that rated highly in importance are quantitative measures related to the brand, i.e. awareness/attitudes, participation in promotional activity, sales figures etc., or audience reach and participation and media exposure metrics.

Their research also shows that key stakeholder feedback is seen as the most important evaluation measure (99%), but that only 43% of rights holders undertake sponsor feedback surveys.

Sponsorship Evaluation – The gap There are many market, media and specialist sports research companies that provide a wealth of quantitative information to evaluate the effectiveness, impact and return on investment of sponsorships, including: TV & radio ratings, advertising expenditure; Media exposure (TV, Print, Radio, Internet); Consumers: consumer attitudes, interest, attendance, passion, sponsorship awareness etc, and many have become the benchmark used by rights holders and sponsors alike. There appear to be two gaps in sponsorship evaluation: A tool to pull together all the various evaluation KPIs to

create a “Whole-of-sponsorship” view. A process to measure the critical partnership KPIs of

the relationship, including feedback from the key sponsor stakeholders.

Sponsorship Evaluation – Summary Research has identified three critical areas of concern for sponsors as they seek to evaluate the value of a sponsorship and to justify its retention in this uncertain economic climate:

Communication: 85% of sponsors agree with the statement that “There is a need for more open communication between sponsors and rights holders”.

Benefits: 46% of sponsors agree with the statement that “The benefits of sponsorship are not well understood in my organisation”.

Evaluation: Key stakeholder feedback is the most important evaluation measure (99%), but only 43% of rights holders undertake sponsor feedback surveys.

There is a need for a “whole-of-sponsorship” review process to bring together all the sponsorship evaluation surveys and research.

Unless sponsors and properties adopt strategies to address these concerns they risk a reduction in revenue, as scarce A&P funds are reallocated to other media that can demonstrate a better return on investment.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Sales figures

Rightsholder health trends

Independent research

Promotional participation

Media reach (TV audience)

Attendance figures

Media exposure analysis

Brand research /tracking

Key stakeholder feedback

9%

6%

21%

15%

27%

27%

24%

33%

27%

21%

46%

36%

55%

36%

36%

46%

58%

39%

27%

21%

21%

18%

24%

27%

24%

6%

33%

Importance of Performance Measures

Extremely important Very important Quite importantSource: Repucom sponsorship outlook 2010

“When you measure and communicate supplier performance regularly, suppliers improve their cost, quality

and responsiveness. Done in an automated, systematic way, performance improves dramatically, in some cases by

over 50%.” (Source: Aberdeen Group)

Sponsorship Performance Management For sponsors, their sponsorship property partners should be regarded as key suppliers of a product that helps to differentiate their brand and supports their marketing strategies and investment.

Viewed in this light, like any other key supplier, sponsors need to consider adopting the same rigorous Performance Management tools, techniques and processes used elsewhere in their organisations to drive performance and relationship improvements, e.g. Procurement: Supplier performance management, HR: People performance management Marketing: Agency performance and relationship

management

Many organisations have either already adopted, or plan to implement Supplier Performance Management (SPM) programs to encourage their supplier partners to strive for excellence in delivery of supply, quality and price, partner relationships and service and support.

The methodology used for SPM varies. All use KPIs and scorecards and also involve other functional managers, but some are still using paper-based methods or spread sheets to rate suppliers and collate results.

But all this is starting to change. In today’s tough market and competitive environment more organisations are realising that SPM programs also need to be about communication of performance expectations and regular formal reviews, often two-way, to provide feedback on how suppliers are performing against those expectations.

Similarly, the advent of on-line scorecards and multi-perspective assessment tools, coupled with traditional HR performance management techniques are making the assessment, reporting and action planning to address weaknesses an easy task to manage and drive supplier performance improvement.

SPM – The business case Research by the authoritative Boston-based research company, the Aberdeen Group, confirms the intuitively obvious conclusion that using SPM programs and managing supplier performance will produce higher value supplies and drive continuous improvement in supply value. They found that companies with SPM programs achieved performance improvement in every category that was studied - an average supplier performance improvement of more than 20% across four main KPIs - compared with those that had no SPM program.

Managing supplier relationships today has gone from identifying and buying goods and services based on negotiated pricing to the strategic ability of recognising "win-win" opportunities for both buyer and supplier through enhanced supplier management activities.

Considering supplier management challenges faced by organizations in the modern global economy, it is no wonder that almost half the respondents from their Perspectives on Supplier Management in 2011 survey placed a high value on supplier management.

While supplier management has always been a critical aspect in doing business, the tools used by organisations to monitor and manage supplier relationships have evolved tremendously over the past decade. Fuelled by outside factors such as the need for transparency of suppliers for both direct and indirect supply chains, and increased demands for measuring suppliers against specific KPIs, supplier management functions have moved from the "back-office" to the "boardroom."

To illustrate the current adoption of supplier management, the results of their research also shows that most organisations have either taken on some formal supplier management initiative over the past few years (38%), or plan to implement (53%) in the next few years.

Their summary of the Perspectives on Supplier Management in 2011 survey states: “Supplier management is an area that has evolved over the past decade. And organisations will increasingly need to focus on supplier relationship management and the functions that are described within it. Their conclusion: “Organisations that have not embarked on a supplier management strategy are missing opportunities for driving performance improvement, more importantly, ignoring opportunities for benefiting from the intangible benefits such as positive brand equity and relationship improvement”.

SPM - Learning’s from HR. Performance management is a discipline that has been used by Human Resources professionals for more than forty years for managing behaviour and results.

Four key lessons learned over that time, which have worked in driving performance improvement for employees and have application in SPM include:

Evaluating performance is important because: o What gets measured gets done o If you don’t measure results, you can’t tell success from failure o If you can’t see success, you can’t reward it o If you can’t reward success, you’re probably rewarding failure o If you can’t see success, you can’t learn from it o If you can’t recognise failure, you can’t correct it o If you can demonstrate results, you can win support”

Engagement is critical. o Specific objectives and KPIs and their ratings criteria must be agreed to by both parties o Post review meetings with sharing of detailed reports and results and to discuss and agree performance and any improvement actions are essential.

360° Feedback: Is a multi-dimensional assessment tool used by HR to assess the competency and behaviours of their key managers and to get ratings and comments from various stakeholder groups, e.g. peers, direct reports, customers etc. Many SPM assessments also utilise this type of feedback to gain the opinions of all stakeholders within their organisation, so they can understand user perspectives at either a geographic or business unit level to complement that of the procurement manager and also compare it with any self-assessment.

Two-way reviews: Many organisations also ask their employees to provide feedback on their manager’s performance, separately from a 360° feedback review.

This technique is used in SPM for high-touch, high-value strategic partner relationships where the supplier is particularly dependent on the timely performance of the client, without which their performance will be impacted – particularly in the area of advertising and marcomms agency performance reviews. In many instances, these SPM assessments are also combined with a 360° feedback to gain the perspective of all parties and stakeholders.

SPM – Application to sponsorships Many of the lessons learned from procurement, HR and marketing areas about the application of performance management tools, techniques and processes are directly transferable to sponsorship performance management. Three critical benefits from this knowledge transfer will be: the ability to assess all KPIs in a “Whole-of-sponsorship” rigorous evaluation, with feedback from all stakeholders; a focus on achieving best practice standards and driving performance and relationship improvement to that of a “strategic partner”.

Sponsorship Evaluation – Our approach Sponsorship evaluation and key stakeholder feedback programs should be part of a process of continuous improvement of formal feedback, review of results and agreed improvement plans.

Four core philosophies underpin our approach:

Performance improvement is a “Journey” to improve sponsor satisfaction, engagement and partner relationships, with the end game being sponsorship retention, through ROI.

The process must ensure high property participation

through prior engagement, agreement to KPIs communication of results and evident change.

Our measurement criteria are based on Global best practice, using hard business drivers as well as traditional sponsorship and relationship KPIs that provide a “whole-of-sponsorship” basis for mid-season and annual review meetings.

We are content agnostic in our assessment tools - we don’t insist on standard questions, just to preserve benchmarking. Our on-line software is simply a platform for clients to use their own design, content, KPIs, rating scales and descriptors

KPIs need to be sponsorship specific, with realistic and appropriate rating scales and descriptors that align with objectives and achievable expectations. “Whole-of-sponsorship” KPIs focus on two key areas: Product and Capability: ROI and ROO (Return on

Objectives) KPIs around the brand and activation/ support activities and the partner relationship.

Business Contribution: KPIs that measure how the sponsorship engages key stakeholders and how it adds value to the business.

A well-designed “whole-of-sponsorship” evaluation, including regular performance reviews and 360⁰

stakeholder feedback, will assist sponsors and properties to assess performance objectively and drive improvement.

Thus ensuring the sustainability of the partnership for mutual benefit.

“If you want to have early warnings about possible problems in a relationship and a way to surface issues and to address them collaboratively, you have to have a mechanism to take

the temperature of the relationship, comparing its effectiveness up against some agreed metrics, and then

talking about the results.” (Source: Vantage Partners)

SPM – the on-line tools The advent of web-based, multi-user software makes the implementation of SPM easy and encourages a collaborative approach to continuous performance improvement in what are complex business relationships, often with multiple touch-points in both organisations, sometimes spread over many geographic locations.

The Performware™ platform of proven on-line tools incorporates and builds on traditional Performance Management techniques. They allow organisations to review their business partners, agree on action plans to improve performance and to better manage the relationship - for mutual benefit.

The software is designed to objectively measure high value, high touch relationships and raises the bar for more effective supplier reviews. It is non-prescriptive, fully customisable and allows users to determine all content. We can easily replicate any current sponsorship review format, scoring criteria and process and the tool is intuitive, with user-friendly features that makes efficient use of time for users. Results are presented on-line in a dashboard and graphics format.

There are three on-line assessment tools, designed for different uses, each with a KPI importance weighting option and the ability to collect supporting comments, to compliment and explain ratings and make the feedback more actionable for suppliers:

Performance Manager: For assessments by category or sponsorship managers. The supplier self-assessment option provides the opportunity for increased engagement and allows them to compare their self-ratings, as the basis for discussion on the differences in perception, expectations and any improvements required. Both supplier portfolio and individual supplier reports are available to users on-line.

360 Feedback Manager: For multi dimension assessments by key stakeholders, where there are multiple touch points within the sponsor Company. As well as sponsorship managers assessing performance, the 360° feedback tool enables functional managers and “front-line” users to be involved in the assessment process – e.g. Operations, Marketing, Finance etc., all with section specific KPIs.

Relationship Optimizer: With two-way assessments, and 360 feedback capability, this tool is generally used where there are high touch, high value relationships with multiple stakeholders and dependent relationships. Often used for a “drill-down” review to further investigate poor performance identified by one of the other tools.

The critical steps in a successful sponsorship evaluation program process are:

Define KPIs and metrics. And agree with properties: o Sponsorship specific objectives, e.g. merchandise

sales budgets, audience targets. o Core KPIs, common to all sponsorships o Relationship KPIs

Evaluate sponsorships: o Key stakeholders rate performance o Properties can rate their own performance

Reports – each sponsorship: o Individual reports on results o Overall reports with performance comparisons;

Review - Meet with sponsors to identify strengths and prepare action plans to address any areas of perceived underperformance.

Reports Feedback to properties on how sponsors rated performance is critical and forms the basis of review meetings and action plans. The software provides on-line generated reports for both the individual sponsorship and for comparison across their portfolio of sponsorships. Detailed, automated, on-line reports mean that analysis and feedback can be timely, with a menu of reports in dashboard and graphics formats covering: Sponsorship portfolio reports for sponsors – By KPI,

rankings, ratings, trends; Individual sponsorship reports – Ratings and comments,

with analysis by department or stakeholder level.

How we work with you When we work directly with sponsors and properties, we provide: Website (your branding) set up, our generic “whole-of-

sponsorship” or your customized KPIs and questions Review and participant set up, survey/review

administration (automated emails etc.), progress reports

Full reports: Individual sponsor and Property reports, aggregated portfolio reports, special analysis “drill-down” reports, personal presentation of results.

When we work with sponsorship consultants, we provide: Website (your branding), KPIs, survey set-up Survey administration, progress reports Administrator training, if you wish to produce your own

reports Full back-up service and support

Summary Marketing Mix: Today, Global and major brands have

clearly defined marketing objectives and strategies designed to reach, communicate to and with, touch, involve, engage and persuade their target market.

Sponsorship is now one, but important, element in the marketing mix to reach these objectives. Marketers and their sponsorship team now see the sponsorship as a key communication vehicle. It is an extension of their brand, with the core asset being the property and what it can offer in terms of a ‘fit” with their target market, wrapped up in all the activation and promotional leverage opportunities used to maximise its exposure, reach and engagement.

Innovation: Sponsors expect more of properties and rights holders than in the past. In today’s World they do not want properties to simply act as just a “supplier” and sell them their stock, off-the shelf product that they offer to all potential sponsors. They are not interested in just standard logo and signage type assets that only provide visibility – they already have brand awareness - but instead they seek innovative methods of touch and engagement that will enhance the experience and “stickiness” of their sponsorship.

Strategic Partners: Sponsors are looking for

sustainable partnerships where properties become “strategic partners” and work with them in the same way as other marcomms agencies and professional services partners. Helping to contribute to the success of the brand through a deep understanding of the sponsor’s specific business needs and delivery of Return on Investment and Return on Objectives.

The journey to that of a strategic partner is not easy, but is worth the effort. It requires paradigm shifts by both parties, particularly in attitudes, requiring openness, trust and information sharing. Sponsors expect their properties to communicate and engage with them at all levels and to be proactive in suggesting ways to further leverage and support the sponsorship.

Customer focus: Properties must adopt a customer focus culture with a more agile, responsive organisation that responds to specific sponsor needs. Some may require a dramatic paradigm shift in how they select, manage and sustain their account management teams.

Many must change their culture, people, relationships and processes to elevate customer focus to the level of importance demanded by the sponsor organisation (particularly marketing and brand management) to drive and maintain mutually beneficial relationships.

Broadening skills and capabilities: Property sponsor account managers may lack the client management and analytical skills required to build and maintain the relationship and need to become more broad-based in their business capability. To improve performance, account managers must better understand the sponsor’s business and shift from a focus on “selling sponsorship” to one of “addressing their requirements”.

They will need to develop new skills which will enable them to meet shifting needs with greater agility and impact. At the same time, however, traditional relationship-building and sales skills will still be important.

Research has identified three critical areas of concern for sponsors as they seek to evaluate the value of a sponsorship and to justify its retention in this uncertain economic climate: o Communication: 85% of sponsors agree with the

statement “There is a need for more open communication between sponsors and rights holders”.

o Benefits: 46% of sponsors agree with the statement that “The benefits of sponsorship are not well understood in my organisation”.

o Evaluation: Key stakeholder feedback is the most important evaluation measure (99%), but only 43% of rights holders undertake sponsor feedback surveys.

Evaluation Gap: Whilst there is a wealth of quantitative

information to evaluate the effectiveness, impact and return on investment of sponsorships, there appear to be serious gaps: o Qualitative research and stakeholder feedback are

the most important, but least undertaken. o Evaluation of the relationship and partnership, with

agreed KPIs and performance reviews, is rarely undertaken

Whole-of-sponsorship” evaluation: There is a need

for a “whole-of-sponsorship” evaluation tool that pulls together both the quantitative and relationship measures for ROI and ROO, as the basis for mid-season or annual review meetings.

“Whole-of-sponsorship” KPIs focus on three areas: Sponsorship specific objectives: e.g. merchandise

sales budgets, audience targets. Product and Capability: ROI and ROO (Return on

Objectives) KPIs around the brand and activation/ support activities and the partner relationship.

Business Contribution: KPIs that measure how the sponsorship engages key stakeholders and how it adds value to the business.

Performance Management: For sponsors, their

sponsorship property partners should be regarded as key suppliers. Viewed in this light, like any other key supplier, sponsors need to consider adopting the same rigorous Performance Management tools, techniques and processes used elsewhere in their organisations to drive performance and relationship improvements.

Many of the lessons learned from procurement, HR and marketing areas about the application of performance management tools are directly transferable to sponsorship performance management – particularly engagement, reviews and constructive feedback as the basis for any improvement plans.

To access an example assessment, or to have your sponsorship evaluation survey converted to the Performware on-line assessment tool, contact Ron.Latham@performware.com.au ph +61 2 9959 3815