I was with Butler University MBA candidates recently chatting about international sponsorship and proposal development, and it got me thinking about motorsports, men’s fashion and key questions to ask of potential corporate partnerships beyond pricing.
Here in Indianapolis we host the largest one-day sporting event in the world, the Indianapolis 500. An estimated 350,000 race fans, professional drinkers, cultural tourists, and consumers of spectacle descend upon our beloved Raceway each Memorial Day weekend. If you can, attend at least once.
As the economy grows and contracts, so do the fortunes of professional racing, success overly dependent upon corporate sponsorship of teams, raceways and the Series itself. For any event (artistic, sports, or otherwise) sponsorship is a vital revenue source. Our Indy Racing League recently ended a title partnership with fashion/lifestyle brand IZOD and picked up a similar commitment from global technology giant Verizon, for less cash but unquestionably a better fit in terms of activation, promotion and resources.
Check out this video. Was IZOD a sustainable partner for a racing series?
Clearly Not. The youth focus of a lifestyle brand cannot easily line up with an old school race car series. And if you’ve attended an IRL event you know it is not the most fashion forward crowd, nor particularly young. Add to this the reality that neither IZOD nor IRL are growing, thriving brands with deep pockets and you have a non-starter. A creative partnership with potential? Yes, but that’s often not enough.
Before you ink the deal on your next corporate partnership, consider these questions.
Is there enthusiastic leadership on both sides of the deal? Partnerships are built upon mutual goals and trust, and this has to begin with leadership. There is almost always someone high up the food chain who advocates for any sizable deal and who is invested in eventual success. Marketing decisions are emotional and involve higher level of leadership than other business decision making. Law firms and other professional service firms are notorious for micromanaging marketing decisions down to the penny and so if your proposal is being internally championed by the millennial marketing manager prepare yourself for disappointment.
Can a committed team pull together on both sides to ensure success? Once you have engaged leadership, a high functioning staff team on both sides is vital. Close attention to the details defines success. For major partnerships, it is a good idea to bring together the working team on both sides early in the process, to answer questions, build enthusiasm, brainstorm creative promotion and divide the workload. Bi-weekly conference calls can go a long way to a collaborative and productive partnership. Don’t assume the CEO or VP’s endorsement of the partnership will mean a successful activation.
Are there ample (even liberal) budget resources to activate the partnership? This is where many marketing partnerships languish, including, I suspect, the IZOD sponsorship. Activation can be an expensive proposition – advertising, client hospitality, staff resources, etc. As a general rule the sponsor should expect to spend an additional 30-50% on activation beyond the proposal’s direct cost. Be up front about this in your discussions and be open to creative activation beyond the cash.
Some years back I pitched both Pepsi and Coke for an exclusive trade and promotional deal. Both companies offered us similar proposals cash wise and we ultimately went with Coke. Our friends at Pepsi proposed including our logo on a month long production of Diet Pepsi cans to the entire state of Indiana. 12 million cans of soda. 12 million marketing impressions. I still wonder if we did the right deal.
Will both sides commit to a multi-year relationship? Partnerships take a great deal of salesmanship, planning, and resources to succeed and it is usually a good sign when there is interest in a multi-year commitment. I push for this whenever possible with the understanding that the relationship will be evaluated yearly, and the plan strengthened over time. A good habit is to bring the team together after your event or promotion to evaluate the partnership and propose improvements before moving on to next year.
Is this partnership a stretch financially, creatively, or in terms of mission and values? This all comes down to the right feel and fit. IZOD, a marginal lifestyle and fashion brand, simply wasn’t a good fit with a racing series. When you are selling clothes, and the drivers (the Talent) wear fire suits…You get the idea. Similarly, if your proposal represents a financial stretch for the company you might be setting yourself up for failure.
This can go the other way as well. I worked with a national consumer brand on a Series sponsorship a few years ago worth about $25,000 to us. We had a compelling proposal aligned with the company’s stated creative values, the support of the company’s CEO, and a three-year commitment. All good.
The staff contact assigned to activate with us managed an international campaign of television commercials and print advertising. Compared with that workload, we simply were not a priority and it was not a successful partnership, despite our best efforts to engage the company with creative promotion, client hospitality opportunities and exposure to our desirable audience.
It is not easy finding the right corporate partner and even more difficult to walk away from money on the table when elements of the deal aren’t sustainable. Ask the hard questions and your sponsorship program will prosper.
Enjoy the Race!