When I do a proposal review or coaching call, I’m often asked about how to explain the cost of sponsorship to a potential marketing partner through the lens of the cost of racing.
“If they see how much it costs to race, they’ll realize why my sponsorship packages start at $X. They’ll see how much I need.”
And I get it. You need to know how much it costs to race – or run a race track – and what your projected income will be. That’s a great starting point for determining how much marketing buy-in you need to accomplish your goals.
Unfortunately, need doesn’t equate to what sponsorship is worth to a prospective partner.
Think about it like this: if you walked into your local grocery store and they were charging $5,000 for carrots you would not buy carrots. Even if it was because they needed $5,000 to pay the utility bills…those carrots are likely not worth $5,000 to you. Karats are worth $5,000. (Help! PUNS!) Need doesn’t equal value.
I talk about one problem with pitching sponsorship based on need in “What to Learn From Drivers Who Cry Poor“, which is this: it only works if you’re not getting enough of what you need. When you get what you need, the help goes away. Feast or famine is not healthy.
The bigger problem is that when asking based on need, you’re not equating sponsorship with value.
No matter what you you call it – ‘sponsorship’ or a ‘marketing partnership’ – you’re entering into a relationship in which you provide value in exchange for value. Even if the value exchange is only implied.
Need-based sponsorship provides monetary value to you, but what about for the other party? Where is the value for them? For most, it’s the satisfaction of helping someone in need. Someone whose dream they believe in.
That might be fine for a crowdfunding campaign, but it’s not a sellable marketing asset.
If you want to be successful with your current and future marketing partners, it’s critical to know the difference. Equate your assets with value that means something to your marketing partners instead of asking for what you need.
xo,
Kristin
P.S. Want further resources on providing value to potential marketing partners? Here’s more info on value-based sponsorship, including using sponsorship analytics, sponsorship pricing, and sponsorship audience targeting.
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