Five months into the pandemic, and with clients being impacted in a multitude of ways, we feel that now’s a good time to share what we’ve learned thus far through this incredibly challenging time. Similar to the Financial Crisis in 2008/2009 when the economy was brought to its knees, dealing with COVID-19 has been devastating for sport and entertainment properties, and indeed all live events. During the Great Recession, sponsorship revenue may have been harder to come by, but at least the event could still happen. So what should property owners do today, and how can you best plan for the challenges yet to come? Here are our thoughts.
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- Do Right by Your Partners – Always treat your corporate sponsors as the valued partners they are. With ticketing, merchandise, and other traditional revenue streams significantly impacted, this has become even more important. From our experience thus far, corporate Canada has been incredibly supportive of our property clients, and have been willing to work with us on creative and pragmatic solutions. It should go without saying, but you simply can’t take that support for granted. Work like crazy to bring value for your partners, even if it is done in a different way than how you have historically done it. And if you have a partner whose business, like yours, is challenged in the current environment, do what you can to help. Like a marriage, partnerships are about being there for each other in good and bad times. Supporting partners beyond what is written in a contract will pay dividends in the long run, and will enhance your property’s reputation in what we all know is a small sponsorship community in Canada.
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- Communicate – No one has all the answers as to what the next 6-12 months will look like, but this is not the time to wait until you have all your plans finalized before communicating with your partners. Be honest. Share what you can, and be as transparent as possible. If you don’t have a full plan in place, that’s OK. Talk to your partners about your vision, and what you’re hoping to do. Make them part of the process. Get their feedback, ask how their business is doing, and take advantage of their experience and learnings from other partnerships they may have. We need as many great marketing minds as we can right now. Communicate early, and communicate often. You will be surprised at what you can learn.
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- Understand Today’s Economy – We have never seen such a discrepancy between industries in terms of how businesses are performing. In today’s economy, there seem to be three clearly defined groups. The first group includes the companies that are thriving in today’s “stay at home” environment. This includes the technology, ecommerce, and delivery companies we all know and love, but also companies involved in the logistics and infrastructure to support those activities. The second group includes companies that may not be setting any new sales records, but have the brand and business model to withstand the current challenges. Examples could include major financial institutions, automotive manufacturers, credit card providers, consumer packaged goods, and some retailers. The last group includes companies that have been hardest hit such as those in the travel, hospitality, restaurant, and hotel sectors. While these businesses will eventually bounce back, they will likely be challenged for the foreseeable future. Prospecting for new sponsors can still be done in today’s environment, but certainly in the near term, you must understand what group your prospect falls in, the very real challenges they may be facing, and how your property can help to potentially address some of those challenges.
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- Understand Your Leverage Points – In addition to the research you’re doing for potential new sponsors, now is also the time to understand where your money is being spent, and with whom. Tracking return on investment was important before COVID-19, but it’s critical now. Can you better leverage your internal spending to benefit a sponsor? Can you consolidate your spending across different divisions so you have one, streamlined business opportunity? Understanding that cash investments will be at a premium, can you get creative with value-in-kind (VIK) contributions that reduce a hard cost? Now is the time to understand every potential benefit you can bring into a sponsorship discussion. Opportunities that have direct business benefit will help you to differentiate yourself from others.
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- Try Things – You will likely never experience another time when you have greater latitude with your stakeholders to try things. No longer able to host British Columbians as they had for the past 107 years, the Pacific National Exhibition launched a “Taste of the PNE” with drive thru and food delivery programs. They rose to the challenge and their efforts were incredibly well-received (sold out in fact!) by PNE loyalists and Vancouverites alike. Without fans, the NBA introduced a number of new broadcast visible assets for their sponsors. According to GumGum Sports, these new assets delivered $11M in sponsorship value during a single national broadcast. In addition to a creative solution to the current crisis, they also identified potential new legacy assets that may become commonplace when games return to NBA arenas…with or without fans. Of course we all need to be smart and financially prudent right now, but now is also the time to take some risks.
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- Embrace Technology – COVID-19 has been a massive accelerant for change. As Microsoft CEO Satya Nadella said on April 30, he has seen two years’ worth of digital transformation in two months. Without the ability for sponsors to engage with your fans or participants in person, it’s finally time for many properties to lean into your digital transformation. Some properties are looking at simple yet engaging gamification opportunities, while others are choosing to provide fans with virtual experiences, exclusive access and information. As an example, together with their Official Technology Partner CDW, the PGA Tour has launched TOUR Pulse. Accessible from the leaderboard on the PGA Tour app, the product will combine live data with artificial intelligence-created content to give followers real-time descriptions of every shot by each player! Some of these initiatives will be with us until the end of the pandemic, but others will be a valuable addition to future sponsorship discussions and whatever the new normal becomes.
The challenges we’ve experienced in the sponsorship industry over the past five months are unprecedented. We can’t deliver the events we love so much as we have in the past, but we can deliver them in a different way. Not everything we try will work, but if we see the challenge and opportunity in what’s to come, our industry will be better for it in the end.
If you need help with your sponsorship program, contact us at hello@unitepartnerships.com
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