Louis Olivieri

Marketing Specialist

Louis Olivieri is a marketing specialist having practiced the profession in Malta since 1988. He is a Business Management graduate and a Chartered Marketer. In parallel to his private practice, he takes various initiatives to give a contribution to the development of the marketing profession.

How To Make Sponsorships Beneficial To Your Organisation

Wednesday 01st November 2017

Sponsorships can be effectively used by organisations, whether profit or non-profit making, to achieve their objectives and communicate them. Here are some tips on how to do so.

Sponsorships can effectively contribute to achieve organisational objectives

Tip: Organisational objectives are achieved by drawing up an annual business and/or marketing plan and budgeting. Sponsorships may form part of the implementation activity. Organisational objectives which can be partly achieved through sponsorships may include sponsoring an event which hosts a captive audience of customers or potential ones. For example, supporting a youth concert when introducing a new drink on the market.

Sponsorships form part of an organisation’s business implementation plan

Tip: It is more beneficial for any organisation to enter into a sponsorship agreement rather than to grant it, either in money or in kind. Granting money, product or providing a service for free is in effect a donation. It is good practice for organisations to ensure that a sponsorship is of benefit to it as much as it is to the beneficiary. This can be achieved through the drawing up of a simple agreement which outlines what the organisation is committing itself to and what it expects in return.

Costing a sponsorship in an effective way

Tip: Keeping to the same example of supporting a youth concert when launching a new drink, it would be appropriate if the cost and benefit considerations were divided into two. The direct cost incurred during the concert and how much revenue was generated. The second aspect is the investment cost – whereby a calculation of how and by when, would enough sales be generated after the concert to cover the sponsorship fee and related additional costs to start making a profit and raping other benefits. Constant evaluation can serve as a guide on whether it is viable to extend the sponsorship over a number of years.

Sharing the risk

Tips: Another good practice when entering sponsorship agreements is to provide for either the sharing of the risk or retain it at the risk-taker’s end. Many sponsorships are tied to risks such as the weather conditions. It is good practice to include provisos about the share of risk in sponsorship agreements such as wavering part of the sponsorship fee should the event not take place or when any aspect of the agreement is not honoured. When a company depends on attendance to get value out of a sponsorship e.g. an insurance company intending to get leads from delegates attending a business convention, the agreement could include an agreed fee against a minimum number of participants attending the event.

Corporate Social Responsibility

Sponsorships can be used by organisations to tie them in with corporate social responsibility.

Tips: Depending on what objectives the organisation wishes to attain, sponsorships related to corporate social responsibility can be included within an organisation’s business and marketing plan. A policy could be devised which will assist in the decision making when seeking opportunities for corporate social responsibility and/or as these may come by. A list of prospective beneficiaries and/or events could also be compiled as a guideline towards following the policy. A PR and communication plan could also serve the purpose of communicating the message which the organisation wishes to portray.