In sponsorship, we are constantly competing for advertising dollars. Every day not only do we go head to head with other sponsorship advertising options, but we battle against other forms of advertising.
Digital ads are a big part of this competition. Brands ask themselves every time when looking at your package, “Why is this package better than targeted FB ads campaign?”.
With this competition, unless we are able to massively differentiate ourselves, we will become commoditized. Our assets will be a drive to the bottom on price.
There is an answer here. And it comes with focusing on a few items that will excel us to the next level of sponsorship value & revenue.
Using a model from the book Good To Great, we can position ourselves to drive maximum revenue and fight becoming commoditized with our brands. I dive in on how below.
The Hedgehog concept from the book Good To Great
First, if you haven’t read Good To Great by Jim Collins, it is a must-read. It will change your entire perspective on business.
In particular, though, there is a very important idea called the Hedgehog concept. At its core, it comes down to this description based on a Greek poem.
In this poem, a fox is looking to capture a hedgehog. In the dynamic between a fox looking to eat a hedgehog, the fox exhausts many options, constantly changing its core strategy to capture the hedgehog without success.
The hedgehog holds a simple core strategy and rolls into a protected ball with each of the fox’s attacks.
Each time the fox stops its strategy and bounds back into the forest to strategize on a new way to capture the hedgehog.
At the end of the day, the fox’s strategies are scattered and diffused, moving on many levels and unsuccessful each time. The fox sees the problem in all of its complexity, pursuing ideas many solutions at the same time.
The hedgehog, on the other hand, simplifies a complex world into one single organizing idea. A basic principle or concept that unifies & guides everything. It doesn’t matter how complex the world is…the hedgehog reduces all challenges and dilemmas to simple hedgehog ideas.
Ultimately, the hedgehog is successful in its goal (survival) and the fox is unsuccessful in its goal.
The Greek poet Archilochus wrote, “the fox knows many things, but the hedgehog knows one big thing.”
A core idea to guide your decisions is in essence the hedgehog’s strategy.
But how do we choose our north star, our hedgehog concept? Luckily, the book gives us a way to answer this.
Behold, the Three Circles of the Hedgehog concept.
Ok, so can we implement this in sponsorship? Let’s dive into these concepts individually.
What are you (your department) deeply passionate about?
I like to start with this concept because it comes back down a lot to culture. No matter what north star we choose, we need to have unwavering buy-in on that focus. This part of the equation is the heart of your department.
For your team, what are you deeply passionate about?
What idea can you get your whole department behind?
Does your department have a mission beyond increasing sponsorship revenue for your organization?
For many teams it’s community. Our fans & the community is are our lifeblood, many times our team is the pulse & heard of our communities & cities.
Are we deeply passionate about our fans & the community they live in? If so, how? How do we show we are?
Pushing further beyond just our city and fans, what are the sub-sets that we are passionate about?
A focus on our Veterans? LGBTQ initiatives? Families? Early Education? Local Business?
The reason why passion comes into play here is if we know what drives our passions as an organization, we can funnel & focus that passion into action.
It helps us make decisions on our sponsorship prospecting strategy. If we have a passion for building up our local and small businesses, we can focus our attention on packages that serve them.
It helps us define the niche in which we will become fanatical about as we grow. If we can focus on that package, we can build assets and packages that are the best in the world for that customer.
And as a department, it helps us know why we wake up each morning. What overarching goal are we moving toward? How will this focus and passion build energy to come to work every morning around that goal?
If you don’t define this passion, the focus will turn to revenue.
In the long run, it is very hard to get a department to rally around “Our passion is driving revenue to increase the value of the club.”
That should be the result of our passion.
As we think about our department, we must come to a collective mission. Why does our sponsorship department exist? What mark will we leave? What results in 10 years from now will we be proud that we achieved?
When we interview a candidate for a sponsorship position, how do we know they will fit our culture if we don’t have a passion to rally around?
When we hire them, how do we know what direction to point them in?
It is a must to define what we are passionate about as a department. It gives our department a reason to wake up each morning. It gives us a tangible mark to hit (most local business accounts in the league and most dollars driven to them).
Most important, it gives us something that we can stand out on. We can be known for. This will help us compete against other advertising platforms.
What can we be the best in the world at?
This part is a massive part that I think we fail at in sponsorship.
As competition for ad dollars heat up, if you can’t answer this question you will lose out on dollars. If we can’t answer this question…we become commoditized in the industry. We put ourselves into a place where we become good at everything…but not the best in the world.
The answer shouldn’t be ‘We are the best at sports sponsorship’. That definition is too broad. I somewhat think even “we are the best in the world at reaching our fans.” is an issue…
Do you reach your fans better than a third-party as Barstool does? Can you prove that?
Do you reach your fans better than if the brand targeted your fans on social media?
This is why it is so important to define this as a department. It will open your vulnerabilities and blind spots.
By asking the question to your team “what are we the best in the world at?”, you start to see where your vulnerabilities are.
You also can understand where your strengths are. How do you reach your fans better than Barstool? What specific metrics, tangible and intangible, can you point to that make your sponsorship a better buy than other outlets?
Overall, it helps define the top reasons a sponsor should go with us. It creates a place where you can say “If you want to do [what you are the best in the world at], we are the place for you
For example, when I was selling restaurant ads in a traveler’s hotel book, I was hit constantly with “What about this publication or Yelp ads?” from prospects.
And honestly, Yelp was better than us at reach and trackability.
But when I sold, I focused on what we were the best in the world at: Reaching visitors.
I would respond with “ Look, the other publications are great for what they do, but there are over 3.2 Million visitors to Portland per year who spend over $15Bn on food. It’s a market you can’t afford to miss out on.”
We’re the best in the world at reaching those travelers through our Portland Hotel Book. It’s in over 30,000 rooms across the city and a guide for visitors looking for where to eat.
So if you want to umbrella reach with some of the other publications…great. Absolutely spend there. But if you see the value in reaching the visitor market and want to drive those dollars to your restaurant…our publication is the best option to do so.”
If a restaurant told me they weren’t interested in reaching the travelers market (which most didn’t)…I moved on.
The beauty of knowing what you’re the best in the world at is the ability to understand and convey why it is a no-brainer to buy with you. There is no competition. We are the best. You can go with a competitor with marketing dollars…but if you do you are doing so because you don’t believe my reach and influence can help you drive sales.
It also saves your team and department a TON of time in the sales market. It allows you to build a prospect list of clients that are much more likely to close.
It helps us focus our energy on clients that we can overproduce for. When we get a “We’re not interested in reaching the visitor market.” you can move onto clients who are.
Understanding what you are the best in the world at helps you stand out, focus, and become more efficient as a company.
Ask your department, what are we the best in the world at?
If answered truthfully, this is the gateway to breaking through your plateau. No matter the size of your team, if you can find what you are best at, you will win more deals.
Answering this question as a department is the key…but it won’t be easy.
If you asked your department this…you’d probably get blank stares.
You might get some mumbles about creating great experiences for brands and their clients…but is that really what you are best in the world at? I would argue that most sponsorship departments would say the above.
What this question is really doing is asking us to define our total value. In all of the services that we offer…what do we do the best?
It is vital that we ask ourselves that question. The answer is the foundation of our growth.
Let’s run through how you may be able to funnel this down to an answer.
Say you start with “We are the best in the world at reaching sports fans in the (city area) area.”
If I were a brand manager, I would ask you to prove it. Are you the best at reaching sports fans in the area? Over ESPN? Over-targeted Facebook ads to sports fans?
Can you prove that your in-stadium sign is better at reaching and influencing fan purchases overrunning an Instagram ad campaign?
Can we be the best in the world when put up against Instagram’s targeted ads?
As you can see, this exercise asks us to define why we are the best. We are defining how we stack up against other options in the same way our customers do when evaluating us.
As we define this, we can understand exactly what we are the best at, why/how we are the best at it, and this allows us to double down on our strengths.
It helps us stand out among other options. It also helps us understand where we take deals and how we structure and value our assets.
If we can define what we are best in the world at, we can build a plan to even more growth with focus.
I can’t stress this enough. Ask your department this, ask yourself this. It will help drive your value.
“What is this department the best in the world at?”
Last, what drives our economic engine?
This is the 3rd question to ask yourself because many of the answers to the above will drive this piece.
How do we make money? What is our business model? How do we generate revenue?
Can our team survive on selling signage? Will that asset drive enough revenue? Can we command a high price for it?
What is our portfolio of assets we offer? Can the team sustain with 90% physical assets that we offer?
Can we shave to 4 BIG sponsors over 100 smaller sponsors?
As we understand what we are the best in the world at, we can understand how to value the assets we do the best.
If we are a small team, and we can’t drive enough revenue through physical assets….we need to look to other avenues to generate it.
Look at your product offerings, double down on the ones that are the most profitable, and understand what drives your economic engine. But don’t forget your passion and what you are the best in the world at.
As you see in the diagram, your strategy comes in the middle of all three. If your economic engine doesn’t sync up with what you are the best in the world at…it is doomed to fail.
If you can understand these three, you can then build a successful plan for your team.
Flip-flopping over multiple growth plans becomes a tiring task in the off-season. With so many opportunities in advertising, so many new competitors, how do we know which are the best for our team?
By answering these 3 questions, we can make more informed decisions on the opportunities and threats posed.
We can also understand what aspects of new platforms we can take advantage of.
For example, let’s say Tik Tok comes out and is pushing through the industry like wildfire. How do we understand where our sponsorship team fits?
If we are passionate about small businesses in our city, and we are the best in the world at connecting community members to those small businesses, then the strategy all of a sudden becomes a no-brainer.
Can we be the first team on Tik Tok to promote small businesses with a series of videos? Can we pioneer a series on the best tacos in town?
Imagine being able to go to restaurants in the city and selling them on a platform that showcases their food trackably to fans in the state as well as out? What if that video gets 100,000 views in a week. What value has that brought the sponsor?
My point here is we know that Tik Tok can get you 100,000 views on a video….but do we know how we want to harness that reach and turn it into value?
If we know what our passion is & what we are the best in the world at…it is YES every time. Instead of strategizing for weeks, we can have the platform fit our thesis.
But most importantly, we can instantly identify the benefits of a new platform or opportunity and execute on it quickly.
When we thoughtfully execute quickly on an opportunity, we win. This is the super-power result of understanding these 3 questions.
So, what is your department’s passion, what are you the best in the world at, and what drives your economic engine?
In my mind, any strategy not built on these pillars is one doomed to fail. We will be in a constant state of ups and downs…but more importantly, we will miss out on executing quickly on the opportunity.
If Blockbuster had defined this, they would have probably gone to home delivery earlier. Netflix knew what they could be best in the world at and positioned themselves to take over the market.
What’s best is they didn’t even have to compete directly with Blockbuster. They doubled down on what they were the best in the world at.
In sponsorship, we are in the same position. We can build a place where we don’t compete with digital ads because we understand what we are the best in the world at. We can create a strategy around utilizing our digital reach to put our assets into a category that doesn’t compare.
As I said before, the first step comes with asking the hard question to our departments and defining each.
It may take some time…but it will be a foundation for our growth. It will help drive our ship and help us make decisions faster.
More importantly, it will help us define why we exist as a department in a better way than “we drive revenue for our team”.
So what is your department the best in the world at? I’m excited to hear the different answers from our readers.