Value is a very interesting dynamic in economics. Why do we spend $1,000,000 for a Ferrari over $30K for a Toyota?
Are the parts really 33X better? Have they built a brand that is 33X better than Toyota?
Really, the only thing that matters is HOW the consumer perceives the value that helps set the price.
In sponsorship, it is no different.
There are levers that play a part in increasing and decreasing the perceived value of your assets, but even all the way down to the perceived value of your department & team.
The past 2 weeks on The Inches Podcast, Rich Franklin & I dove into the levers that can affect the perceived value of your assets & team.
Before you do anything, you have to identify the need of your sponsors
The old riddle goes “Which weighs more, a pound of rocks or a pound of feathers?” Well, they weigh the same. ( I fell for that as a kid as with most of us).
But flip the question, which is worth more…and you get the grown version of the riddle.
Some would look up the value of each online per pound, but this would be the wrong way of going about it.
A pound of rocks is worth much less to a mattress company than a pound of feathers. The need for the item is more valuable than the weight.
As we really look at the idea of perceived value… I think it would help to get a good definition:
In marketing terminology, perceived value is the customers’ evaluation of the merits of a product or service, and its ability to meet their needs and expectations, especially in comparison with its peers.
Thank you, Investopedia for that definition. But really it is a very concise way to state the items that
The key part that stands out to me is “its ability to meet their needs and expectations”. Perceived value is heavily grounded in the needs of your customers.
With that, it is important to state that the first goal for increasing the perceived value of your sponsorship assets comes with truly understanding the needs of the sponsors you are targeting or renewing.
If most of your current sponsors are going through a hiring freeze, adding new assets around hospitality packages for new hires does not meet their needs. The perceived value of the asset is low at this moment.
If most of your current sponsors are looking to boost their own perception in the community, your community outreach assets will be a prime product and have a higher perceived value.
As we navigate the different ways we can increase the perceived value of our assets…we must first understand that knowing a particular partner’s needs is a foundation to success.
How can you understand their needs? Looking over their company blog is a good start. Discovery calls as well.
Overall, before you start on any aspect of the below items, it is vital that you understand your prospect’s needs in order to know which levers to pull.
Define your audience & fan demographics
We’ve talked about this a lot on the podcast…but we have to jump in again because it is so crucial in our sponsorship assets.
In short…why should a brand spend their dollars with your team over another source of advertising? It is always vital to understand that we need to build context with our sponsors for why your assets are the best spend of their dollars.
The easiest way to build context, in my opinion, is by showing that your audience syncs up perfectly with their target market. If you can show that your audience and fan demographics are in line with the customer they want to reach, you immediately increase the value of spending dollars with your team
This goes all the way to the point where a brand will spend MORE with you even though your reach is less than other options because your fan demographics are more valuable to them than spending on a wide net reach campaign.
This of course means that you need to invest in ways that show you these demographics. One easy way is if you have a Facebook page, you can see certain demographics of your followers.
I won’t dive in on that on this article but click HERE to see how.
Understanding what you have (your following and audience) is a cornerstone to telling that story for why a sponsor should spend with you.
If you can clearly articulate that your fans are in the desired demographic that your sponsors are looking to reach…you will win more deals. The perceived value of your assets will increase drastically to the brand you are selling to simply because you reach the customers they are looking to get in front of.
I want to pause here and think about this for a second. If you know who your fan is, you can automatically increase your perceived value to sponsors that are looking to reach that fan.
It is as easy as doing the above and seeing where your Facebook following lands demographically that can allow you to increase the value of your assets to sponsors who are looking to reach your fan group.
Exclusivity & Differentiation
People want items that few people have. It’s been proven with cards, exclusive sneakers, cars, etc.
The same goes for your partnership assets. How exclusive the asset is will increase the perceived value.
We’ve seen this in sports for years with jersey sponsorship & stadium naming rights. Only one brand can be the sponsor of those assets. They, therefore, hold a high perceived value.
I want to pause again here and go back to the first point of understanding the need. An exclusive asset, if it does not help fit the need of your sponsor, is useless. We can’t just say a jersey patch has high perceived value to a sponsor just because it is exclusive. If the goal of the sponsor is not focused heavily on increasing brand awareness that asset has a far lower perceived value. It is not worth the price tag to the sponsor.
Exclusivity is not tied with high perceived value. BUT if we can understand which sponsors have that goal of people knowing their brand (I always think back to BioFreeze and the Portland Trailblazers. The company was at a point in their marketing journey where they wanted EVERY household to know their product. The jersey patch was, in my opinion, the perfect asset for their stage of the company).
With that being said, you should have a fair amount of exclusivity in your inventory base for the sponsors who are willing to pay for it. An exclusive car partner category will have many dealerships fighting for that spot…and knowing they will be the ONLY car partner to reach your fans increases the perceived value.
The next piece to that is differentiation. It is an interesting part of exclusivity that I want to dive into.
If you are the only property in a league to have a larger Snapchat following….you will increase your perceived value to sponsors who either want to reach the customers on that platform OR maybe more importantly are already spending there.
If you are the ONLY team to have certain assets…your perceived value will skyrocket. Again it goes back to the idea of limited supply. If only 5 teams in the country have a big following on a certain platform it will attract a high price to the sponsors looking to be on that platform.
Right now, if you have a large following on YouTube as a team you will have a higher perceived value as brands are dumping money into YouTube ads. If you are one of the only ones in the league to have a high following on this…your perceived value will be insane to certain sponsors.
Exclusivity is key, but don’t forget about differentiation as we think about increasing perceived value due to limited supply. I would differentiation is more valuable if done correctly than exclusivity.
Implied or Actual Endorsement
The best way I can describe this is what transpired this previous off-season with the Tampa Bay Bucs. Tom Brady comes to the team and the perceived value increases.
There are a few reasons in this case. One is he’s Tom Brady and the attention he commands from Primetime games to more news coverage is huge.
Second, the odds of the Bucs heading to the Super Bowl increased quite a bit (this paid off).
The implied or actual endorsement from your staff, players, coaches, mascot, and others can instantly increase the perceived value of your assets and team.
Rich utilizes this amazingly at the Winterhawks. Mike Johnston is the coach and GM of the organization, he also has coached in the NHL and is one hell of a leadership speaker.
A few activations Rich has put together has been bringing Mike to company meetings to speak all the way to hosting a coaching show on YouTube live where fans can listen and season ticket holders can ask questions.
Both of these sponsorship assets have a higher perceived value with the addition of Mike. It fits directly with the sponsor’s goals. His presence has elevated the value of the inventory and activation.
You have people in your organization that to the right person can elevate the perceived value with their addition to the inventory. Don’t count them out.
Wins In Your Area
A track record is a huge part of perceived value. How well you’ve done with a sponsor in your area is critical for the price people are willing to pay for your assets.
As you build these case studies up, you are essentially de-risking others from spending with you. If you can prove that there has been another sponsor that has benefitted from the partnership it shows that there is a good chance others will.
I think this is pretty apparent so I won’t dive in too far here. But I will say it is important to authentically spread this success through your community.
One key way that I see is creating a LinkedIn page specifically for partnerships on your team. There you can highlight campaigns launched with other sponsors and authentically let the business community know about your wins. It is the easiest way to get that word out that I’ve seen.
Using Multiple Platforms For Reach
This goes a little bit back to the differentiation item. If you can show that you have multiple avenues for reaching your diverse fan base…your perceived value will increase with sponsors.
Again it comes down to two items. One, there is a higher chance you have inventory that they are looking to invest in. If you have a wide variety of platforms in which you can reach fans, you can tailor fit it to the needs of the sponsors.
Second, it shows you do have a wide reach of assets with more ways to reach your fans. If you can increase the touch-points with fans it will be more valuable with fans.
Now I am not advocating for a wide reach but shallow engagement. If you have 7 channels but no one engages with 5 of them…it will look enticing at first, but as they dig in it will lose its value if there are no numbers in reach or engagement with them.
It should be on your partnership’s team road map to eventually build these platforms up. It may take a year, but as you add more sponsors will be more interested.
Activation > Impressions
This goes back to a great episode we did with a 17-year-old fan, but activation is more impressive to brands than impressions.
How does this link to perceived value? If you are the team that is peddling impressions only…today brands aren’t buying.
If instead, you show activation, the assets that really get fans involved, the perceived value will increase.
For one, it shows that you are actually doing the work to find inventory that connects with your fans. Impressions are ok, but it is easy to say “your sign has been seen by X fans across the season”. if you can say “ X fans say the halfcourt shot AND we were able to activate 5,000 of them as they guessed on their phone whether the fan would nail the shot.” the value increases due to the more engaged level to the inventory.
Activation is remembered. The recall on these assets is higher than your heavily impression-based ones. Focus on how your inventory can engage and activate your fans over just getting their impression.
Reach Of Sports Sponsorship
This goes back a little bit with the demographics point, but the big thing about sports is really the reach of sports.
Geographically in some cases, it is global. In others, the local reach aspect while smaller reach is more valuable.
Overall, sports is one of the only places where you can reach a wide variety of customers in one shot. It checks the boxes for customer reach for a lot of brands.
As we talked about with platform reach, showing sponsors that they can get more bang for their buck by efficiently reaching multiple types of fans & customers will increase the perceived value of your package.
Success Stories & Track Record
Again, this may be compounding with the wins in your area but it is a little bit nuanced here. If you have a track record of delivering results with sponsors, your value increases.
I’m sure you have seen the opposite of this where a brand may have asked “what other car dealers have you worked with?” and having no direct case study. It is really hard to grab a deal when you haven’t proven that you can perform on their needs with your package.
Does this mean you can’t ever close a car partner? Absolutely not. If you don’t have a track record in a certain vertical, you can find a success story in a similar space
For example, most car dealers want to ensure that you can connect their salespeople with fans looking to buy cars. If you have had a campaign that does this with say an insurance company and it was successful, there is a good chance it will translate to a successful campaign in the future with this car sponsor.
Success stories mean you’ve come through for someone else to help reach their goals. If you can promote these to other sponsors, it is a great way to increase the perceived value of your assets.
Appealing To The Ego Of Decision Maker
Ego may be the wrong word here…but it’s one we found best described how to grow this part of perceived value. When we sell to people, we are selling to humans. More than a transaction, these are real people with families, interests, hopes, & dreams.
There is no easier way to show you actually care about building a relationship with a prospect or client than tying into their ego.
For example, does your prospect have kids? If so, offer to host them in the penalty box before the game.
Has one of your prospects or current clients always dreamed of shooting a free throw on an NBA court? Invite them pre-game to take a shot.
If you can bring value to your prospect, it will go a long way to building trust. Sometimes it is as easy as mailing a sports card of their favorite player.
People buy things from people they trust & like. You are absolutely a HUGE piece of increasing perceived value.
Think of it like when a superstar joins a sports team, it immediately increases the perceived value of the team and their chances of winning it all. Adding a superstar sponsorship salesperson to your staff and team will do the same thing.
How you interact with your prospects and sell to them will increase (or decrease) your perceived value. Have a bad call with a prospect? You can expect that to bring down the value.
At the next meeting, you fulfill their needs and wow them…you’ll increase that value.
I think the best way to show this is in the actual prospecting process. If off the bat you are sending robotic, spammy emails…you will immediately drive down the perceived value. If you are creative and stand out with a thoughtful outreach…you can immediately increase that perceived value.
You are a big piece in the sales process. Don’t discount that in helping build your department’s perceived value with sponsors.
Notice how none of these had anything to do with your team’s performance on the field with wins & losses!
There is a perception that the perceived value will only increase with how well the team is doing. I hear it all the time “well we aren’t doing very well on the field so it makes sense why we have less value in our packages.”
None of the above has anything to do with the play on the field. You can absolutely grow your perceived value by going 0–16 in a season.
And it comes back full circle to the first point here of knowing the needs of your sponsors. If you are creating a place where brands trust that your assets will reach their marketing goals no matter the team record.
The list above is all items you can increase your perceived value despite the quality on the field (or ice or court).
Last, most of these are easy to do
A lot of these items are easy to do & implement to increase your perceived value. There are many items here that you can within hours create packages and reports on.
In my mind, there is no reason you should NOT implement the above in your sponsorship department. These may be the easiest way to drive more revenue.
And really this is a way to make closes easier. If you can increase the perceived value of your assets and department as a whole, those sales calls and meetings are much easier.
The prospect sees you in a better light. They understand who you are as an organization and where you can bring value better. This all leads to an increase in trust.
I’ll end this with increasing perceived value is really increasing trust
Why do people buy Ferrari at such a high price? It’s the centuries of increasing perceived value to build trust that when you buy one for millions of dollars, you are getting one of the finest automobiles in the world.
The same will be the case for your sponsorship department and assets. If you can be patient, lay the groundwork, and build upon the above factors…you will be simultaneously building trust in your team.
More trust that you can deliver to your sponsor’s goal, the higher the perceived value to brands.
As you go forward with your 2021 planning, I challenge you to really audit these items and see where you land. These are all levers of perceived value, they can decrease your perceived value faster than increase if you aren’t thinking about them in many cases.