The outlook for sponsorships at associations is very optimistic, but many associations leave money on the table by not getting creative about their offerings. Here's how to get more from the resources you already have—and discover new ones.
Associations are no strangers to the world of sponsorships. They've courted exhibitors and advertisers for years. Even so, they're leaving money on the table by failing to compete successfully against other entities for sponsorship dollars, and there's plenty of room to innovate.
Associations are a bit late to the sponsorship game, says Diane Knoepke, vice president of client leadership for IEG Consulting Group, which performs market research for associations. "Associations are the last type of organization into the sponsorship pool, but the overall trend shows significant growth," she says. IEG has been tracking industry spending on sponsorships for 25 years but measuring associations' share for only about six or seven years.
IEG's most recent sponsorship report, issued in December 2010, shows there's fertile ground:
- Sponsorship expenditures by North American companies grew 3.9 percent in 2010 to $17.2 billion.
- IEG predicts sponsors will increase outlays by 5.9 percent in 2011 to $18.2 billion.
- Associations and membership organizations attracted $514 million in sponsorships in 2010, a 3.6 percent increase from 2009.
- In 2011, IEG predicts associations and membership organizations will earn $543 million in sponsorships, a projected 5.6 percent increase from 2010.
The media through which sponsorship messages can be delivered—exhibit booths, dedicated events, iPad splash pages—generate much excitement. But the key to innovation in sponsorships has less to do with specific venues than with associations aggressively rethinking their approach. Associations must look at themselves as having something very valuable to sell and focus on the message rather than the medium. Sponsorship programs must be data-driven, integrated partnerships that are structured to generate measurable return on investment, says Knoepke.
"There is no one-size-fits-all approach when it comes to sponsorship programs," she says. "You hear lots of talk about models, but effective programs are driven by an association's assets, members, and culture, as well as its potential sponsors and what drives them."
Setting the Stage
One area ripe for innovation is data-driven prospecting, Knoepke says. "Many associations do lots of research, but few do the kind that helps them with sponsorships." You can engage an outside firm to conduct this research or do it in house, but the key is to identify companies that want to reach your members. A great place to start is with current exhibitors and advertisers, then expand your pool outward.
Think outside the box, says John Thorner, CAE, executive vice president of the American Society of Anesthesiologists (ASA), which began working with IEG in 2009 to revamp its sponsorship programs. It's not only pharmaceutical and medical-device companies that want to increase their visibility as sponsors, but nonmedical, practice-related companies as well, such as IT and billing and collection companies.
"We wanted to investigate the potential of sponsorships as a source of nondues revenue; there already was demand. IEG told us that ASA had potential and interest," says Thorner.
The next step your organization must take is valuing its assets, determining the potential value to sponsors of reaching your members. The Casualty Actuarial Society (CAS), a professional society comprising 5,500 actuary members, sought ways to expand nondues revenue about three years ago. "Our nondues revenue had come primarily from exhibitors and job postings in our career center," says Mike Boa, director of communications and marketing for CAS. "We wanted to go beyond dues, meetings, and credentialing." CAS worked with Potomac Communications Group to set up its new offering, the Society Partners Program, which offers a variety of discounts and benefits to sponsors based on their sponsorship level.
"Associations must depend on a solid foundation of research to understand their market," says Leonard Greenberger, a partner with PCG. "They should be thinking about trends, understand who else is competing for the sponsorship dollars, and look beyond the usual suspects."
CAS also leveraged its members to conduct research, surveying the 125 members of its member advisory panel for suggestions on companies that might be interested in CAS sponsorships. Involving members up front can secure early buy-in and help the program creation process go more smoothly, Greenberger adds.
Once you've identified prospects, talk to them to better understand their goals. Do they want recognition at your annual meeting, or are they looking for year-round visibility? This direct communication was critical to ramping up the sponsorship program at the U.S. Travel Association, where Malcolm Smith came on board two years ago as vice president for business development.
"The phones were not ringing in 2009, so USTA had to be more creative than ever," he says. "We began questioning sponsors about their goals and worked with them one on one to create customized sponsorships." For example, a USTA sponsor that wanted to be known as technologically innovative seized the opportunity to sponsor the wireless connection at a conference. Another that wanted to develop a reputation as a thought leader sponsored a book signing by a keynote speaker. USTA now garners $1.5 million annually through sponsorships.
However, not everything goes; setting boundaries is critical. That's something Ron Skinner, assistant executive director of the Association of School Business Officials, learned as the organization underwent a major sponsorship program overhaul. As schools face a significant change in IRS regulations about how they manage their employee retirement funds, financial-management companies wanted access to ASBO members to educate them about the regulations—and to solicit their fund-management business. "We had no mechanism for saying no," says Skinner. "Our previous [sponsorship] program lacked boundaries, and sponsors were having turf wars."
In setting up your program, review your other corporate offerings as well: advertising, affinity programs, corporate memberships, and so forth. "Ask yourself, ‘How many different businesses should we be in?'" says Knoepke. Ensure that you don't inadvertently undermine sponsorships with other programs that erode sponsorship value; take a holistic approach and discontinue or revise those other programs if necessary.
Au Revoir, À La Carte
Rather than focusing on selling this magazine ad space and that tradeshow booth, a smart new sponsorship strategy involves working collaboratively with interested sponsors to create bundled packages tailored to their budget, interests, and market. CAS and PCG took this approach when it created the Society Partners Program two years ago. Offered on an annual basis, the program requires upfront commitment and investment from sponsors, who can then select from a menu of media through which to deliver their messages.
Sponsorships are available at three levels: Platinum ($15,000), Gold ($10,000), and Silver ($5,000). Sponsors receive elevated status and recognition, as well as a 20 percent discount on the list price of their menu selections, which represent a wide variety of sponsor, exhibitor, and advertising opportunities. In the past two years, CAS has attracted three Platinum, one Gold, and four Silver sponsors and has more than tripled its sponsorship income.
Why has the program been so successful? "CAS has made the most of its assets," says Marge Wasson, senior associate with PCG. "The program is very flexible. It allows tailoring to sponsor needs and allows sponsors access in ways that are suitable for the membership."
Another way associations can innovate is by adopting a value-based, rather than a cost-based, pricing model. Instead of charging sponsors the cost of a medium—say, an exhibit booth—plus a small markup, associations must begin charging them for the value they receive, says IEG's Knoepke. "This requires a critical mindset shift that values the association's contribution to the partnership. It is a more mature, less supplicant-based relationship that yields more money and accounts for the intangibles."
"It's almost embarrassing what we were giving away," says Skinner. "An association's value is greater than you think it is, and there are many opportunities to reach your members that are unused or undervalued."
For example, think of those ubiquitous conference lanyards. Previously, Skinner explains, when an ASBO sponsor wanted its logo on the conference lanyards, the association charged them the cost of the lanyards plus a small markup. But the sponsorship is worth more than that, because every conference attendee is advertising that sponsor. "We had been creating ambush marketing platforms" for sponsors, Skinner says. A value-based pricing model costs sponsors more, but it accounts for the fact that value is derived from much more than simply the medium or vehicle.
Another thing sponsors deeply crave is exclusivity. When tailoring sponsorship agreements, look for opportunities to give them naming rights, says Skinner. Each ASBO sponsor has a proprietary "platform" that offers them solo recognition, such as a survey or award program.
ASA took a similar approach, providing a limited number of sponsor opportunities. ASA's sponsors want to hear from practicing anesthesiologists in order to stay abreast of a changing field and how ASA is improving patient safety through science and innovation, Thorner says. ASA conducts an annual one-and-a-half-day invitational meeting that brings together top-level sponsors to hear from ASA leadership and staff about the society's goals and objectives for improving patient care.
When DeVonne Parks, director of exhibits for the Special Libraries Association, does her site visits 14 months before an annual conference, she invites SLA's top-three ($100,000 level) sponsors to come along. They have the opportunity to view the exhibit hall, select their booth locations, meet with destination-management companies to plan offsite functions, and begin their planning well in advance. They truly appreciate the opportunity and rarely pass it up, even though they pay their own way, Parks says.
Keep Your End of the Bargain
To keep sponsors satisfied and coming back, associations need to be just as good at execution and fulfillment of the sponsorships as they were at attracting them. ASA ceased using a commission-based outside sales consultant and created a new corporate-development and sponsorships department with a full-time director position. Sponsorship income has increased from $150,000 a year to more than $650,000 a year. ASA has recently added a second position in the department to meet ongoing fulfillment needs.
ASBO made a similar commitment to servicing its sponsors, adding a full-time staffer and adopting what Skinner calls a "concierge" model. "We received strong feedback from our sponsors that they wanted a single point of contact within the association, whether it was to ask questions about their tradeshow booth or renew their corporate membership," he says. "It is our responsibility to make sure all of their needs are delivered on."
It is critical to structure sponsorship agreements in a way that facilitates measurement and reporting, says Knoepke. Sponsors want to see return on their investments; you can supply this information by issuing a regular fulfillment report that includes goals, strengths, visibility, and the value of the benefits sponsors received. In addition to supplying data, have regular, ongoing conversations with sponsors about their objectives. "This makes you a better partner and allows you to identify areas of underperformance and fix them," Knoepke says.
Be Proactive to Prevent Pushback
Many associations, especially medical societies, must tread cautiously when forging relationships with the industry. Careful guidelines can help prevent missteps. "ASA evaluates any potential sponsor against our Guiding Principles for Corporate Supporters," says Thorner. "These principles are transparent to all and posted on the society's website. They state that ASA abides by the Accreditation Council on Continuing Medical Education Standards for Commercial Support and require that any company participating in the program abide by their respective codes: PhRMA Code on Interactions with Healthcare Professionals and AdvaMed Code of Ethics on Interactions with Health Care Professionals."
Involving board members and senior volunteers can help prevent pushback from members who decry "selling out." When CAS first launched its program, it not only surveyed members about sponsor prospects but used them to spread the word about the new offering. Senior society members called their peers—decision makers at some of the largest firms—to tell them about the program, then followed up with written material.
Your members are your association's most valuable asset; you're sitting on a gold mine. By applying innovation to approach, structure, and execution, you can tap that mine and get your organization its share of a market valued at $543 million.
Online Extra: A Sponsor Speaks
Stephen Urbrock is director of business development for Barrie & Hibbert, a leading actuarial consulting firm. Prior to joining the firm last year, Urbrock worked in a similar capacity at Milliman, another leading consulting firm. He has participated as a sponsor of the Casualty Actuarial Society in both capacities.
Associations Now: What's the history of your sponsorship involvement with CAS?
Stephen Urbrock: When I was at Milliman, we became one of the original platinum-level Society Partners, pledging an annual commitment of at least $15,000 in support.
Why did the Society Partners Program appeal to you?
Previously, CAS sponsorships had been very event based. Options varied depending on the event and were constantly evolving. It was hard to anticipate what we could and could not do, and there was not much transparency in the offerings.
What do you mean by that?
We would get to events and find that other companies had secured creative opportunities for exposure just by asking. True, they were being creative and proactive, but we felt that the same opportunities should be offered to everyone. CAS recognized the need for a more formal program that facilitated better planning for sponsors.
What do you think of the current Society Partners Program and its menu-driven approach?
We now pick options we might not have thought of. For example, Milliman began sponsoring the lanyards at all of the CAS conferences. They provide great visibility—to the point that competitors began bringing their own lanyards because they didn't want to advertise Milliman!
Now that I'm at Barrie & Hibbert, I really value the annual-contract approach. It helps with the budgeting and approval process, especially if different business units have to contribute an allocation. Most of all, however, I value the transparency that the new program has brought to the process.
Jennifer J. Salopek is a freelance writer in McLean, Virginia. Email: [email protected]