Proving the Return on Investment of Your Sponsorship is a Load of Sh!t
The return on investment measures the success of your sponsorship for the sponsor.
No two campaigns are alike which contributes to the fact that ROI is very hard to prove and measure from one marketing or sponsorship campaign to another. To try to do so would be like comparing apples to oranges.
This is one reason I call bull shit when a company asks you what your ROI is.
Let me give you a few more reasons why. Each marketing function alone will have different measurements and returns. The goals of each campaign should be different. Each individual company will have their own ROI from their previous marketing campaigns. Each industry will have different measurements and returns. Each stage of the marketing funnel will have different measurements and returns. A new product or company will have different results from an established one. Some marketing efforts are very hard to measure the outcome such as awareness campaigns or those that are designed to change attitudes. Some marketing efforts do not generate a return until a year later. I think you get the idea. Often there are multiple marketing projects happening simultaneously, and it can be difficult to measure the results of one part of the marketing mix.
Finally, ROI should be tracked over a long period of time. Sponsorships that are multi-race and year-long will give you a better understanding of the return, and what has contributed to an increase or decrease of what you are measuring, and give time to adjust to increase your marketing performance.
As you can see, there are too many factors involved for you to be able to provide an anticipated ROI or even a fair assessment of a comparable campaign.
That does not mean you should not track your results and be able to show that information to a potential sponsor while keeping information confidential if necessary. You absolutely must have some idea of what you have accomplished. If you do not know right now, start tracking.
If the question of ROI comes up, and it will, I would recommend that you explain that you cannot guarantee any kind of return, however, you can offer to share the results you received with a previous sponsor. Additionally, ask what their ROI is in their own marketing efforts and what the industry standard is. Your goal will be to meet those baseline standards, with a great campaign exceeding them slightly.
Because your first meetings with the company should not involve asking for money, take this time to ask what it is they would like to accomplish with the sponsorship, what marketing they have done to achieve that goal previously, what is their ROI, what are industry ROI’s, and how they believe your help will increase their ROI.
Your goals with the first meetings are to create a plan together that solves a problem for the company or brings them closer to what they desire.
Before agreeing to a sponsorship know the goals, the steps to get there, what is going to be measured, who is going to measure it, and the degrees of success. If the goal is to collect email addresses, set benchmarks such as: if we receive 30 email signups a week, we have exceeded expectations. If we receive 15 that is good. If we have 5 email signups a week that is still good but let’s regroup and see how we can improve on that.
Regular check-ins with a sponsor will show you are interested in helping them achieve their goal, that you understand the goal, and that you can change direction if it is not working as planned.
Even though measuring results is difficult, that does not mean you don’t measure what you can. Send me an email with the words ‘ROI Template’ in the subject line and I’ll send you a template to help you begin to measure your results.
Please also do not forget that the success of a sponsorship comes down to how the company chooses to activate the sponsorship.