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Good Surprises vs. Bad Surprises - the Importance of Contracts

by Emily Taylor
  
29 03 2010

Easter is less than a week away!  While I realize that Easter means so much more than chocolate and bunnies (sometimes one and the same); you really can’t help but remembering the traditions you might have experienced growing up.    In our family Easter is a really big deal.  My mom went each year with my sister and I to buy a brand new Easter dress and a girly tradition we all loved.  My parents were also pretty smart – after church they would put all four of us down for a nap after a big lunch while they high tailed it over to Walgreens to buy the Easter candy at half off now that the holiday had already come.  They then proceeded to fill and hide eggs inside and out – and with four kids there were eggs EVERYWHERE!  At least that’s how I remember it… After the mad dash scrambling to fill our baskets with as many eggs as possible we would report back to the kitchen table to discover our finding; opening the little plastic eggs and finding out if we got sweet tarts or a Cadbury egg was just plain exciting.  You couldn’t peel us away from the table before we had unveiled every little surprise. 

But I think we can agree that some surprises are not always fun when it comes to sponsorship.  When you’re expecting something sweet and tasting something sour it’s going to show up in your reaction!  While there aren’t many activation efforts that are implemented without one or two surprises, the good news is there is a way to protect yourself and your partnership from experiencing a surprise that can devastate a partnership; and that is by negotiating, documenting and signing a living contract

When you and a sponsor have gone through a proposed agreement, and have determined that you have a mutually beneficial interest in partnering together, the next priority for both of you is likely going to be that you want a contract in place.  Now, keep in mind, if something is not included or defined in the contract, then no one is help accountable to implement or activate, so it’s best to work through the nitty gritty details of customization before the agreement is signed, this makes sense, too, because how can you truly know if you want to partner if you haven’t discussed the ins and outs of the requirements to partner.  This should shed just a bit more light on why you should allow sufficient timeframes in order to allow a partnership to be presented, negotiated, signed, sold and activated.  This is clearly not an overnight process.  Not everyone would say so, but my personal stand is that you can’t be too small of an opportunity to create a living contract.  Having a contract in place is never going to hurt you, if you think about the details you want included and aren’t half hearted in your effort to define the important pieces; but it will always help you.

So what should you include in a sponsorship contract in order to keep the surprises at bay?  The following list is not exhaustive, but a good start of items to consider when writing a contract and working through the details with a sponsor:

  1. The obvious details: who this contract effects, specifically the sponsor and sponsee, the date of the agreement, and contact details of each party. 
  2. Partnership Expectations: since you’ve spent all of your time creating an attractive proposal and discovering the key objectives of your sponsor, it would be wise to communicate the agreed upon reasons for partnership.  What each party plans to get out of this effort, and the justification for why it all makes sense.  Since you’ve really already defined this, it shouldn’t be tough to highlight in the contract.  This comes in handy for multiple reasons: as activation progresses you’ll want to refer back to the “why” behind each effort – if it fails to support the main reasons why your sponsor wants to partner with you, it’s probably not the best activation effort.  If you have new ideas or can think of innovative new ways to activate, this is a good reference point as well;  (obviously if you do activate new efforts post contract, you’ll need to get them approved or bought in by the sponsor as it could either change the price, or require more on their part).  Last, knowing the reasons for partnership will also be a good reference point for ROI reporting, information collecting for post event reporting, and the results will give you a leg to stand on as you move into renewal conversations.
  3. Terms of the agreement: this might be one of the most important places to get specific about.  This should highlight everything from the method of payment, types of payment (if in-kind exchanges are included), details around any kind of development that hinges on the amount; for example – if the amount of payment is directly related to the number of event attendees, you’ll need a formula for communicating the ticket sales and determining time frames for cash received.  Timeframes should also be carried over when you walk through the specific assets and activation efforts related to the partnership as well.  If you need to create and publish a radio spot by a particular date, this should be communicated in order to prepare the sponsor to offer what they need to get it done in a timely manner.   Whether it’s a definition of category exclusivity being offered (with specifics around what does and does not apply to the category), what kind of media exposure you’re offering and the details around ability to use sponsor logos or any other boundaries around brand affiliation, you should define as specifically as possible what you are each bringing to the table and answer the line of who, what, when, where, and why questions.  It’s also wise as you proceed with each effort/asset, that you define the value associated.  It’s never a bad thing to underscore the value of the partnership you’re offering.
  4. In case of dissolved agreement: there should be a section which clearly indicates what happens if either side needs to dissolve the agreement.  Are there any extenuating circumstances that will dissolve them of any obligation to provide the funding promised?  Bankruptcy, change in leadership, etc.  If not, you need to clearly communicate that understanding, knowing that ultimately it is in your best interest to maintain the relationship when at all possible while at the same time protecting yourself and your property.
  5. Who’s responsible for what: never assume!  This really ties into the terms of the agreement section, but when you’re walking through activation efforts, it would be foolish not to identify how these things are going to happen, or at least the most appropriate contacts from each party that will be communicating to make sure efforts run smoothly.  Rarely does one step up to the plate to deliver if it hasn’t been clearly assigned. 
  6. Renewal benefits: It can only help you to start pre selling.  Anyone who has been in sponsorship for any length of time can attest to the fact that regardless of the side you’re on (sponsor or property), it is much less of a headache to renew and continue a partnership than to start fresh, and how better to communicate your loyalty and value to a brand than by offering a benefit to renew that is outlined in the contract.  Perhaps you give them first chance (within a reasonable timeframe) to renew as an exclusive sponsor, or title sponsor.  Or maybe you give them a percentage discount for agreeing to renew by a certain date for a 5 year agreement.  Either way, you want to plant those seeds early.

Again, these are just a quick glimpse into some of the items you really should consider including in a sponsorship contract, it’s not exhaustive, but a good start.  So, not only to underscore your credibility, to set yourself up for renewal, and to protect yourself from getting a jellybean when you were expecting Reece’s Pieces; put together a detailed and thorough contract!  Any stories on what you’ve experienced with or without a contract in place?  Tell us your victories or your horror stories, educate your peers by telling us of your experience with contracts. 

 

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Sponsorship Connection Tip #10 - Ask Your Sponsor What They Want Out of the Partnership

by Emily Taylor
  
22 02 2010

Once interest has been established and an initial meeting set, ask your sponsor what they want. At this point you have done enough research to know the basics about what they might consider a goal of the partnership, but stay on top of the ever-changing corporate world. Who knows, they might come up with even better ideas than you initially considered.

Mutually beneficial relationship.  You can put the stress on whichever word you want in that sentence and it’s an appropriate reminder for how sponsorship is supposed to work.  As a property rights’ holder, make it your motto – it keeps you from underselling yourself and from taking advantage of a sponsor.  It promotes long lasting partners and is an all around great perception to maintain about sponsorship in general. 

Remember the movie starring Mel Gibson: What Women Want?  Mel finds himself in the middle of a freak accident involving a wax kit, pantyhose, and a hairdryer; after which he’s able to hear a woman’s thoughts.  He finds it fascinating as well as frightening, and uses it to further his career and generally get him what he wants.  Eventually the surprising insights and transparency moves him to a place where he’s able to empathize with the hearts of women, and he ends up with much better relationships as a result.  Why? – Because he took the time to listen and perceive what women were thinking, what they wanted; beyond the petty self serving surface level stuff.  When you as a sponsorship rights’ holder take the time to peel back the onion and uncover the true goals and objectives of your partner, you become much more valuable and the partnership becomes mutually beneficial. 

Reality is that we live in a world that’s rather self seeking.  In business, people have on their best defense and offense when they go into meetings.  The question is; “how can I make sure I get what I want out of this deal?”  Not that I’m knocking a proactive approach to ensure a deal is well made – but I ask this; how would you feel if you sat down in a meeting with a potential partner, and the first words you heard them say were: “I think we both have reasons to be excited about where this partnership could take us; but just to make sure we’re on the same page, tell me, what is it you would like to see happen in order for this to be beneficial for you?”  Then how would you feel if they sat quietly and listened, taking careful notes, responded appropriately and seriously considered your perspective before they transitioned over to themselves?  Personally, I would breathe a sigh of relief, I’d feel more invited to be creative because I believe they genuinely have an interest in hearing my ideas, I would feel inclined to loyalty (even just for the relief of a sincere partner), and I would be inclined to trust their interest in keeping their side of a deal – and caring about valuable activation.  I would feel like I was being pursued for a partnership and not being pitched for my money.  When you prepare yourself to go into initial meetings, ground setting meetings; with the purpose of moderating a conversation and not verbally dominating; and when you’re quick to listen and slow to speak, you break down walls of suspicion, and self-seeking behaviors. 

You know the saying: two heads are better than one?  It’s true, and hardly anyone will refute it.  So the application is that no matter what kind of great ideas you might have or expect your partner to have regarding activation strategies, the best thing you can do is make it a dual effort.  If you simply listen and do not hear, or worse – ignore the wants of a sponsor, you might as well not have listened at all.  And when you invite a manageable number of individuals into a whiteboard session where you’re brainstorming how to best strategize your efforts, you’re bound to stumble onto something truly brilliant.

So – this is the last of our top 10 sponsorship connection tips!  I hope you thoroughly enjoyed them – we welcome your feedback, and your personal tips.  What has worked for you?  What connection effort do you know of that should be highlighted for those in the sponsorship community?

 

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Sponsorship Connection Tip #8 - Give Yourself Plenty of Time, part B

by Emily Taylor
  
2 02 2010

Give yourself plenty of Time –part A: Sponsorship can take 4-6 months to connect with the most appropriate person, negotiate a partnership, and sign a contract. The larger the sponsorship deal the longer it can take to close. Part B: This is also why it’s a good idea to pursue more than one sponsor at a time. Work smarter not harder!

 I talked to a gentleman today who mentioned he has been in sponsorship sales for about 6 years.  He said up until about 10 months ago, he has never had any trouble selling his sponsorship opportunities to interested sponsors, and that he has never seen it as hard as it is today to connect and sign with a sponsor.  I don’t think that’s a unique story; which makes part B of our tip today even more important.

We learn a lot of lessons over the years; one lesson many individuals learn with experience is to set up clear accountability and a clear set of instructions in order to see a project implemented (or a partnership activated) devoid of flaws – a good lesson, and not an uncommon one either.  Another lesson I’ve come to determine is invaluable is: always have a plan B.  Let’s face it, sometimes when planning out a partnership; it can be easy to put all of our eggs in one basket – especially if things appear to be lining up or this sponsor has had a long time commitment.  You can know in your own mind why the timing is perfect and it’s just a matter of presenting your thoughts to a sponsor that they will be just as excited about jumping on board.  We have a client using SponsorPark who has a MAJOR annual event, one that’s really known to go hand in hand with their Presenting sponsor – if it were presented by any other sponsor I think people would wonder if it were the same event!  But after chatting with my contact he said, “ya know, I sweat it out every year just hoping that small percent chance that they decide not to resign with us isn’t going to be this year.”  Wow.  So far that hasn’t happened to them; but every once in a while that sponsor just don’t see the opportunity the way you do.  At best you receive a “thanks but no thanks, this isn’t a good fit for us at this time,” in the mail, and you wonder where the heck you went wrong. 

Now, there’s nothing wrong with a little healthy persistence – it’s possible you can clear up a misunderstanding or give just enough push to send them over the edge and into a full partnership, but keep yourself from having an anxiety attack and pursue multiple options at once.  There’s no reason to be sneaky or conniving about it, upfront honesty without being manipulative and arrogant is a good thing.  You ought to strive for a way to communicate a sense of urgency by letting them know they aren’t the only one being pitched, but still imply that you believe them to be a great fit – possibly your preference. This way, if a sponsor comes back at the end of the connection process (and I say process, because even connection doesn’t happen overnight) one of your potential sponsors decides not to move forward; you can have another sponsor (or two) who you’ve already started the process with as well.  Your chances go up to get a sponsor in line in time for some effective activation.  The worst that can happen is that you put all your eggs in one basket, and at the last minute they back out – leaving you no time to start the process over again AND give a new sponsor time to implement effective activation of a partnership.  You then resort to lowering the price (and value) of the partnership. 

Now for the best case scenario – multiple sponsors are interested; now you have the ability to get competitive due to increased interest in the opportunity which makes it more valuable – play that card carefully.  Honest, but upfront about the competitive and valuable partnership you have to offer.  Sponsorship sales representative’s mouths water to be in this boat!

So, get wise about connecting with sponsors – have a plan B, and pursue multiple sponsors at one time; this gives you plenty of time to work with.  It maximizes your time, and we all know that these days optimizing your time investments are extremely important.

 

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