How to Use CRM to Deliver ROI from Sports Sponsorships.
There’s no question that sports sponsorship is big business.
Figures available from an independent report conducted by IMR Sports Marketing in 2013, pegged the Australian annual corporate spend on sports sponsorship to be $774 million p.a. 1
A snapshot of some of the largest sports sponsorships in Australia are:
- Kia’s sponsorship of the Australian Open, estimated to be $10 million per year and is locked in until 2018. This will take their support to 17 years – making Kia the longest ever sponsor for the 108 year event. 2
- Toyota’s sponsorship of the AFL which is now in its twelfth year 3; the combined corporate investment across AFL is approx $186 million p.a 1 – making it the strongest sporting code for attracting corporate investment.
- And Emirates who have been on a global mission to support as many sports codes as possible, spending $US320 million – making up almost half of their annual marketing budget and 1.5% of the airline’s annual turnover. It’s believed they currently spend $17 million in Australia on the Melbourne Cup, AFL, Golf and Cricket. 4
And there’s many other national, state and community based sponsorships from corporations Australia-wide; typically from industries such as financial services, alcohol, automotive, telecommunications, government, soft drinks and real estate. 1
But are these sponsorships effectively delivering ROI for the sponsors?
The short answer is likely to be ‘who knows?’
According to McKinsey 5 up to half of US companies that invest in sports sponsorship don’t have a system in place to measure the ROI for their business – and my hunch is that this would be even higher in Australia.
There’s likely to be measurement around some aspects such as brand exposure and correlating media value, bums on seats at events… but how does this really translate to bankable commercial return?
As consumer audiences become more digitally savvy and more empowered to switch off to brand advertising if they want to, the brand exposure value statement is going to get weaker and weaker.
The opportunity is to connect and add value to the experiences that consumers can have with the sporting event, and engage them in ways that are relevant, aspirational and perhaps even inspirational.
10 Practical Steps to Delivering ROI
- Determine measurable broad commercial objectives that the sponsorship could support e.g.
- Brand awareness / NPS
- Educate broad market segments about particular products
- Build a database of prospects
- Unlock exclusive value for corporate customers and prospects
- Deliver direct sales
- Form a true partnership where the corporate sponsor and the sporting organisation proactively support the deliverables around identified objectives.
- Understand the audience profile, potential segmentation and communication channel opportunities to both the membership and fan supporter databases.
- Understand the customer and prospect profile, potential segmentation and communication channel opportunities within the corporations’ environment.
- Consider an engagement strategy to connect the audience to the sponsorship activities and the sponsorship activities to the commercial objectives. Ensure the strategy offers aspirational and inspirational opportunities that are a good fit with the event and relevant for the audience segment/s.
- Build a financial forecasting model that details every aspect of the activity. This model should encompass all the stages, audience segments, communication channels and the potential measurable engagement and full costs down to cost per acquisition (CPA) and cost per contact (CPC). This should all lather up into an overall ROI target statement such as:
“For an overall investment of $X, we’re expecting to generate X customers, $X Revenue and overall contribution of $X, at a CPA (cost per acquisition) of Y.”
- Systems need to be put in place to track the direct engagement and conversion that the activity generates. This could be as simple as creating a dedicated microsite to capture leads and nudging those leads down the path to consideration and purchase with unique messages and offers that have unique tracking codes.
- To gauge broader brand perception from the various external and internal audience segments, corporations could run a simple NPS survey out to the various databases after the activity and continue with this every year to check that the consumer perception of the sponsorship initiatives are on the right track.
- Analyse every aspect of the sponsorship activity at the end including overall measurable results in comparison to forecasts and results by audience segment, communication channel and engagement type. Share the analysis with the sporting club/organisation so that all parties can be as informed on the successes, challenges and future opportunities as much as possible.
- Use the insights gained to continuously improve the effectiveness of the sponsorship activities and the overall ROI year-on-year.
1 IMR Sport Marketing, News, Australia/NZ sponsorship worth $880 million, 06/10/2013. http://imrpublications.com/newsdetails.aspx?nid=44
2 Kia serves up about $50 million at Oz Open, 11/01/2013 http://www.goauto.com.au/mellor/mellor.nsf/story2/8EC841695C973C96CA257AF000007F6F
4 Emirates bets on $17m on sport advertising spend, 31/01/2015 http://www.smh.com.au/business/media-and-marketing/emirates-bets-on-17m-on-sport-advertising-spend-20150129-131r2y.html#ixzz48ybKHmn7
5 Is Sports Sponsorship worth it?, McKinsey & Company , June 2014 http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/is-sports-sponsorship-worth-it