Why Sponsorships?

As a business owner, manager, assistant, or many other titles, you’ve probably been contacted to sponsor something. I have heard of opportunities to sponsor cheer teams, mission trips, vehicles, benefits, performances, outdoor events, etc. The list is endless, but the same question always comes first: why should I sponsor something?

First, we need to identify a sponsorship opportunity. When you are asked to sponsor something, you must receive something in return. Most sponsorships return logo placement, name mentions, product placement, or something of this nature. Regardless of what you receive, you must receive something of value to be considered a sponsorship, otherwise you should not consider it at all or it is just a charitable donation, as in sponsoring a church mission trip.

There are several reasons to participate in sponsorship opportunities. Sponsorships are part of the marketing plans for companies of all types and sizes.

Reason #1: Exposure.

Exposure is just another word for advertising, but a sponsorship ad is not like other “ads.” A sponsorship allows you to advertise your name or company without fighting the natural tendency of consumers to exclude you. In fact, consumers are more likely to let you into their consciousness through sponsorships because you have now linked to an event, idea or place that the consumer already has an interest in, therefore it may be of interest to them as well. .

Exposure in the community is also vital to the success of any business, especially smaller businesses. By taking advantage of sponsorship opportunities in your community, you gain recognition and credibility within your local market. Businesses that rely on customers in close proximity to their location will find exposure in the community almost invaluable.

Reason #2: Contacts.

When you sponsor something, you have made a business contact. This contact can be a potential customer, a referral, or a vendor. Throughout a sponsorship, you usually develop or strengthen a business relationship that can and should come in handy at some point. I learned years ago that everyone I do business with is good connections. The better relationship you develop with your contacts, the more they will do for each other.

There are also contacts from the event, activities around the event, networking opportunities, etc. If you’re sponsoring an event, which is what I recommend you use most of your sponsorship budgets for, you usually get free admission, VIP passes, or the like that would allow you to network with potential clients. You also come into contact with other sponsors who may be potential customers. You need to be careful about sponsoring things that include direct competition, therefore other sponsors should be valuable in some way.

Reason #3: Sales Opportunities.

Once you’ve signed a sponsorship, use it to generate sales. By sponsoring an event, you already have a foothold in potential customers, and this leads to potential sales. If possible, structure advertising campaigns around sponsorship. Look for opportunities to cooperate with the sponsored organization, person, place or event. The first reason given for sponsorships was exposure. Exposure, like any other type of advertising and promotion, is useless if it doesn’t generate sales. Even if it doesn’t directly generate sales, it should be beneficial to your business.

Reason #4: Give back.

Many times sponsorships are requested for charitable organizations or events. Whether it’s a sponsorship opportunity or a charitable donation, many times it’s the result of giving back. I did engage in sponsorships that brought some exposure, some sales, and some contacts, but ultimately I saw it as an opportunity to give back to the community and those who helped me get to where I am. I once read that in order to receive and make a profit you have to give back and I think this is true. Even the most timely sponsorships are a way to give back, especially if it’s for a charitable reason.

Reason #5: Tax deduction.

Once you’ve decided a sponsorship opportunity is right for you and make your contribution, you’ve created an expense. Just as advertising expenses are deducted, sponsorships are also deducted. Even if the sponsorship is a charitable donation, it is a cancellation. Be sure to include this expense in the expense column.

If you find yourself in a position that receives sponsorship requests, pay attention to them, especially if you also do advertising and promotion, and if you’re not, get the person involved. I know you’ll filter through a lot of requests and see a lot of “opportunities” to sponsor things, but some may have more benefits than thousands of dollars spent on advertising or promotions. Also, you may find this to be a great way to structure a mini ad campaign.