Best Practices: Revamping your sponsorship programSSA replaces a la carte sponsorships with executive packages, increasing revenue from $72,000 in 2005 to more than $870,000 in 2007By Cathy Chatfield-TaylorWhen Mike Scanlon came out of retirement to head the Self Storage Association (SSA, www.selfstorage.org) in 2004, annual sponsorship revenue totaled less than $60,000. He boosted that to $72,000 in one year. But for an association with a $2.3 million budget, that wasn’t good enough. Scanlon brought in sponsorship expert IEG (www.sponsorship.com) to revamp the program, targeting $1 million in sales by 2008 — a 1,288 percent increase.“That was a leap of faith for us,” Scanlon says. “IEG’s fee was more than we had raised in 2005 sponsorship revenues.” IEG did an intensive asset inventory to analyze SSA’s membership, identify who wants exposure to those members, and quantify the value of opportunities available through programs, publications and events. The process took about four months, including six weeks of staff preparation to gather information about members, advertisers and exhibitors. The research revealed that SSA did repeat transactions with only 96 of the 168 companies doing business with the association. Among those 96 companies, SSA averaged about three $1,600 transactions per year. The annual value of a “loyal” customer? Just $5,000. Recognizing that the association’s assets were seriously undervalued, IEG recommended bundling opportunities into exclusive packages with limited availability. “We look at integrated packages, so companies that have different objectives for visibility and awareness will have the opportunity to drive sales and access members in meaningful ways,” says Rebecca Joslin, Vice President, IEG Advisory Services. Pricing of each asset in a package is based on industry standards. For example, the value of a logo on a sign for professional associations is as little as 5 cents per attendee or as much as $1 per attendee. IEG computed line-item values, then totaled the package prices for presentation to the board, pointing out that sponsors get about one and a half times more benefits than they pay for — for example, a $60,000 package is valued at $89,715.The result was the SSA Partner Program, which requires a two-year commitment of $60,000 per year; the SSA Year-round Patron program, which requires a one-year commitment of $30,000; and the SSA Spring and Fall Conference and Trade Show Sponsors, valued at $8,000 and $10,000, respectively. Each package is limited to eight companies in exclusive categories.SSA’s board of directors was skeptical that these high-dollar deals would sell. The single largest transaction the association had made with one company in one year was $28,555. “We wanted to get the larger companies in our industry to pony up,” Scanlon says. “We wanted vendors to make a financial commitment to the organization, which they had never done.”To kick off the program in May 2006, Scanlon invited vendors to participate in a conference call, when they would have equal opportunity to claim a category. The first sponsorship sold before the call concluded. Within six weeks, Scanlon had sold all eight partner programs. Within nine months, he’d sold six of the patron programs, as well as several of conference sponsorships, for a total of $870,000 in sales booked by March 1, 2007. Once companies sign up, they must “activate” their sponsorships to get the full benefit. A new sponsorship director is dedicated to reminding sponsors about upcoming opportunities and deadlines, as well as renewing packages on their anniversary date. All packages are prorated to renew on a January 1 — rather than 12 months from date of sale, as IEG recommended — to simplify calendar-year accounting. Backing out membership, advertising and booth space revenue, Scanlon estimates the net gain for sponsorships is 83–85 percent. But, he says, “The best byproduct is a cadre of loyal vendors and believers in your organization.”
Cathy Chatfield-Taylor is a San Francisco Bay-area freelance writer/editor. E-mail cathy@cc-tunlimited.com.
Sidebar: Self Storage Association’s strategyGoal: Increase sponsorship revenue.Objective: Place dollar value on an integrated marketing program.Strategy: Inventory assets and price opportunities based on industry standards.Tactics: Sell four packages in price ranges from $8,000–$120,000, limit availability to eight companies per package, restrict one company per exclusive category. Results: Sponsorship revenue grew from $72,000 in 2005 to more than $870,000 in 2007.
