ROI - Sponsorship Valuation
ROI - Sponsorship Valuation
www.projekt9.superbikeclub.com
Measuring and Assessing ROI
Lets discuss a bit about (ROI) Return On Investment and Valuation of Sponsorship.
If you have a sponsor, be it full financial backing, partial backing, a parts/product supplier or simply an associate product supporter who gives you and/or your team a discount. Which in return for that support you are expected to provide some form of valuation back to the sponsor. Think of ROI as a form of accountability if you will, a way to justify what the sponsor is giving and you, the sponsee is receiving.
I will begin by stating that sponsorship is not philanthropy, it is not a free ride - so to speak. Philanthropy involves the contribution of cash, cash-equivalents, or in-kind goods and services to a charity, with no quid pro quo expectation. In other words, philanthropy is support of a specific cause or an event without any commercial incentive/gain at all. The worst thing you could do for your sponsor, and yourself is take what ever the sponsor has agreed to give you and run. Don't do a runner- mate.
Also, don't confuse sponsorship with advertising, advertising is the direct promotion of a company through ad space or airtime bought for that specific purpose. Advertising is a quantitative medium, sold and evaluated in terms of Ad-rates, (CPM) cost per thousand, (CPC) cost per click, or air-time spots. Ultimately resulting in the sales and/or potential sales of goods and/or services. Sponsorship, on the other hand, is a qualitative medium; which promotes a company in association with a purpose, I.E. - event(s), team(s), organization(s). What sponsorship is - is a business relationship between a provider of funds, resources and/or services/goods to an individual, team, event or organization, which in return offers promotion, rights and association that may be used for a commercial gain and/or advantage.
In order for you to measure and ROI, and valuate its worth, you will first need to compile the facts. Data gathering, or data mining is crucial to the process of measurement. I cannot over emphasis that point enough. Now, ROI is not an exact science, but you should do your utmost to find reliable, credible sources of information whatever the media type. You should always attempt to get the numbers, figures, and data straight from the providing source. If that is not available, then utilize credible media measurements from industry researchers, and or industry reporting. It is better to err on the conservative side than to blow numbers out of proportion, because most companies will have market research data on their own product(s) and/or services(s) and demographics anyway. If you are way over on figures of impressions, potential impressions, demographics, sales, potential sales, and the cost/benefit ratios, then your so-called facts will quickly become a farce. This may lead to your credibility suffering in a very big way. You will most likely spoil any chance of establishing a working relationship with your sponsor, perhaps any future potential sponsors, and possibly even the chance for other racers as well. It has to be a give-and-take relationship, just don't do all the taking!
Establishing trust is a vital aspect of any relationship, so be honest from the very start. If for some unforeseen reason you cannot keep your obligation in a sponsorship, have a discussion and explain your situation to your sponsor(s) as to the problem and possible solution. If you make every effort to do so, in almost every case you will have earned the respect and trust of your sponsor. There is usually a solution to most every problem, and if you and your sponsor(s) work on it collectively, it will probably be an easier task to deal with.
ROI report - You should compile your facts and figures throughout the year and then present a detailed statistical report at seasons end. You can choose almost any business type format to write up a report, just make sure it is clear, relatively easy to read and comprehend. If you have never done such a report, then search for examples, either on the internet, in books, or perhaps if you know of a business associate who may have done this type of report before, could assist you.
Keep track of all the exposure you offer and provide to your sponsor(s). Their logo, name, merchandise, ect. Whether it is print media, web media, banners, television or radio. Keep a log book, keep press clippings, sound bytes, tv clips, ect. and so on. Data gathering also involves data saving. Save everthing, even if you don't think you may need it at that very moment, you may come to need it sometime in the future. Exposure and Benefits - There are two types of exposure/promotional benefits - Tangible and Intangible. Some examples of tangible benefits are; signage, impressions, and visibilty.
Some intangible benefits are; real property, intellectual property, recognizability, consumer/fan awareness, loyalty, and exclusivity. The goal for you or your team is to provide a benefit to your sponsor; ultimately the scale of the benefit(s) will depend on the level of sponsorship you are receiving.
Cost/Benefit ratio - This is simple mathematics, for every dollar received, you should provide at least a dollar and half in return. Now, the return will not be in direct cash, but rather in the tangible/intangible benefits. Whatever level you have secured, you should attain at least a 1:1.5 ratio.
www.projekt9.superbikeclub.com
Measuring and Assessing ROI
Lets discuss a bit about (ROI) Return On Investment and Valuation of Sponsorship.
If you have a sponsor, be it full financial backing, partial backing, a parts/product supplier or simply an associate product supporter who gives you and/or your team a discount. Which in return for that support you are expected to provide some form of valuation back to the sponsor. Think of ROI as a form of accountability if you will, a way to justify what the sponsor is giving and you, the sponsee is receiving.
I will begin by stating that sponsorship is not philanthropy, it is not a free ride - so to speak. Philanthropy involves the contribution of cash, cash-equivalents, or in-kind goods and services to a charity, with no quid pro quo expectation. In other words, philanthropy is support of a specific cause or an event without any commercial incentive/gain at all. The worst thing you could do for your sponsor, and yourself is take what ever the sponsor has agreed to give you and run. Don't do a runner- mate.
Also, don't confuse sponsorship with advertising, advertising is the direct promotion of a company through ad space or airtime bought for that specific purpose. Advertising is a quantitative medium, sold and evaluated in terms of Ad-rates, (CPM) cost per thousand, (CPC) cost per click, or air-time spots. Ultimately resulting in the sales and/or potential sales of goods and/or services. Sponsorship, on the other hand, is a qualitative medium; which promotes a company in association with a purpose, I.E. - event(s), team(s), organization(s). What sponsorship is - is a business relationship between a provider of funds, resources and/or services/goods to an individual, team, event or organization, which in return offers promotion, rights and association that may be used for a commercial gain and/or advantage.
In order for you to measure and ROI, and valuate its worth, you will first need to compile the facts. Data gathering, or data mining is crucial to the process of measurement. I cannot over emphasis that point enough. Now, ROI is not an exact science, but you should do your utmost to find reliable, credible sources of information whatever the media type. You should always attempt to get the numbers, figures, and data straight from the providing source. If that is not available, then utilize credible media measurements from industry researchers, and or industry reporting. It is better to err on the conservative side than to blow numbers out of proportion, because most companies will have market research data on their own product(s) and/or services(s) and demographics anyway. If you are way over on figures of impressions, potential impressions, demographics, sales, potential sales, and the cost/benefit ratios, then your so-called facts will quickly become a farce. This may lead to your credibility suffering in a very big way. You will most likely spoil any chance of establishing a working relationship with your sponsor, perhaps any future potential sponsors, and possibly even the chance for other racers as well. It has to be a give-and-take relationship, just don't do all the taking!
Establishing trust is a vital aspect of any relationship, so be honest from the very start. If for some unforeseen reason you cannot keep your obligation in a sponsorship, have a discussion and explain your situation to your sponsor(s) as to the problem and possible solution. If you make every effort to do so, in almost every case you will have earned the respect and trust of your sponsor. There is usually a solution to most every problem, and if you and your sponsor(s) work on it collectively, it will probably be an easier task to deal with.
ROI report - You should compile your facts and figures throughout the year and then present a detailed statistical report at seasons end. You can choose almost any business type format to write up a report, just make sure it is clear, relatively easy to read and comprehend. If you have never done such a report, then search for examples, either on the internet, in books, or perhaps if you know of a business associate who may have done this type of report before, could assist you.
Keep track of all the exposure you offer and provide to your sponsor(s). Their logo, name, merchandise, ect. Whether it is print media, web media, banners, television or radio. Keep a log book, keep press clippings, sound bytes, tv clips, ect. and so on. Data gathering also involves data saving. Save everthing, even if you don't think you may need it at that very moment, you may come to need it sometime in the future. Exposure and Benefits - There are two types of exposure/promotional benefits - Tangible and Intangible. Some examples of tangible benefits are; signage, impressions, and visibilty.
Some intangible benefits are; real property, intellectual property, recognizability, consumer/fan awareness, loyalty, and exclusivity. The goal for you or your team is to provide a benefit to your sponsor; ultimately the scale of the benefit(s) will depend on the level of sponsorship you are receiving.
Cost/Benefit ratio - This is simple mathematics, for every dollar received, you should provide at least a dollar and half in return. Now, the return will not be in direct cash, but rather in the tangible/intangible benefits. Whatever level you have secured, you should attain at least a 1:1.5 ratio.
Labels: Sponsorship
posted by Racing Secrets
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