sponsor retention

Sponsor Retention – Is ROO or ROI More Important?

March 22nd, 2016 Posted by No Comment yet

After my last post, where I analysed the IEG/ESP Sponsorship Survey, I have been asked by a few people what is more important in sponsor retention – ROI or ROO?

In fact, one sponsorship exec I was speaking to commented “It was a great article and really helped me to understand the survey from a practical point of view but how do I even start to decide where I focus my time?”This is a very pertinent question and one that can make the difference between keeping or churning a sponsor.

Sponsor Retention Should Be The Goal (For You)

As we’ve have talked about before, sponsor retention is 20% cheaper and 20% easier (in a time sense) than finding, on-boarding and building rapport and a relationship with a new sponsor. So it goes without saying that sponsor retention is the backbone to any successful sponsorship program.

Sure, there are some sponsors that you want to churn (for multiple reasons) but that is the key, you need it to be your choice on who and when to churn and not the other way around.

If we think about it, sponsor retention has so many benefits including:

  • time to build real alignment and collaborative programs;
  • opportunities to grow your commercial base off solid footings by bringing on new, rather than replacing old sponsors; and
  • the chance to strategically focus your commercial program instead of spending your planning time trying to sell important properties which have been dumped back in your lap.

Keys To Sponsor Retention

As discussed in my last blog, the keys to sponsor retention and sponsor ‘happiness’ is the ability to measure, report and fulfil the ROI and ROO intentions of a sponsor. However, it’s the ability to work with a sponsor, as a partner, which will allow them to realise their ROO and, in turn, their ROI more effectively.

Being organised, efficient and thorough will allow you to deliver all of your promised benefits and afford you to the time to work with your partner on their objectives and how you can help them achieve it.

If you are able to fulfil your obligations consistently and with no prompting (that is, without forgetting to deliver anything) then you will earn the respect of your sponsors. This will then allow you to build your relationship, gain greater insights into their business and help to align how you can help be a part of their future.

In my eyes, the four keys to sponsor retention are:

  • fulfilment;
  • trust and respect;
  • relationship; and
  • alignment with objectives both now and into the future.

The Relationship Between ROO & ROI

Both depend on each other – you can’t achieve ROO without first realising ROI but the ROO informs how ROI will be achieved.

The biggest mistake I see is that sponsorship professionals focus so much on the ROI and fulfilling benefits that they either forget or don’t have time to work on the ROO elements of a partnership.

To realise the impact of that, sponsorship professionals first need to understand the internal mechanics of the brand/sponsor that they are dealing with.

There will be some elements within the business who just want to see that benefits have been fulfilled, however, there are other parts (more often than not the final decision makers) who want to see that this opportunity is contributing to the bigger picture and assisting with the corporate objectives of their marketing program.

So, whilst ROI is the first important step in sponsor retention and will establish credibility in you as a property that your partner wants to sponsor, your ability to really align and execute how you can help achieve ROO is the underlying factor in sponsor retention.

How Do I Achieve This?

ROO is established from the outset of a relationship through a mutual understanding as to what is trying to be achieved by partnering together. However, you need to stay aware of how these objectives change and move throughout the length of the partnership so that you can remain relevant in the conversation.

This is ONLY achieved by having a good relationship with your sponsor and the respect of them to keep you informed of their changing objectives.

Your Best Chance Of Sponsor Retention

This relationship will also let you see what is and is not working from an ROO (and ROI) perspective and give you the best chance of sponsor retention going forward which includes:

  1. having meaningful relationships;
  2. fulfilling your obligations;
  3. keeping your eyes and ears open to the changing landscape of your partners; and
  4. being ready to adapt.

The Answer

So the answer is that ROO is more important because the ROI leads to ROO but you cannot determine what investment is required without knowing what is to be achieved. As the famous saying goes “If you don’t know where you’re going, any road will take you there”.  In other words, if you don’t know what the objective is then any benefit will do.

We’ve all seen contracts where the list of benefits don’t seem to logically fit together to support an obvious objective. And we all know, come renewal time, that those types of agreements lead to sponsors saying “We just don’t feel we are getting value from the relationship”.

No one wants that. So focus on ROO first, then ROI, and you’ll be fine.

Mark Thompson - SponServe

Mark Thompson // Director

Mark specialises in sponsorship and diversified income strategies and has used this expertise across the Community, Semi-Professional and Professional Sports sectors. He combines hands-on experience in managing the expectations and obligations of sponsors with marketing and stakeholder engagement to deliver outstanding results.

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