By Hank Berkowitz
If you think you’ve been spending more time on non-dues revenue programs than you have in the past, you’re not alone. As last month’s Association Adviser enews reader poll discovered, nearly half (45.8 percent) of respondents told us that non-dues revenue is an "increasingly important" component of their 2012 budgets. Nearly one-third of respondents (30 percent) said non-dues revenue will have the same importance it did in 2011, and only one in four (24.2 percent) predicted non-dues revenue would be less important next year.
- Non-dues revenue has become increasingly important to associations over the past decade.
- Experts say technological and demographic factors—not just the economy—have been driving the upswing in associations’ non-dues revenue efforts.
- The best non-dues revenue programs always reinforce the member value proposition.
- Don’t rush to add new programs and services until you’ve carefully tested members’ reaction to them and made sure you have sufficient staffing, energy and resources to support them.
"Everyone agrees that associations’ dependency on non-dues income is high," said Beth Brooks, president & CEO of the Texas Society of Association Executives (TSAE). While this is not a new priority, many groups have found they need to be more mindful and strategic about non-dues income."
According to Ken Cousineau, executive director of the Canadian Golf Superintendents Association (CGSA), non-dues revenue (NDR) accounts for nearly 70 percent of his organization’s revenue—up from 55 percent in 2005—and is becoming the mantra for professional, non-mandatory organizations. Cousineau expects NDR to account for even more of CGSA’s revenue in the next two to three years.As a percentage of your 2012 budget, what is your expectation for non-dues revenue?
The move toward NDR has been the trend for at least the past decade and is not necessarily because of the recession, according to Chris Monek, Senior Executive Director of Business Development, Programs & Industry Relations for the Associated General Contractors of America (AGC). "The key to a successful NDR program is how it contributes to member value. For instance, I put together a lot of affinity relationships with partners such as GM, Ford, BP and Enterprise. We negotiate deep discounts for our members and that directly helps our recruiting and retention efforts. What’s more, we share the royalty payments we receive from our partners with our 95 chapters." It may look like NDR, but it really is what supports the member value inherent in their dues, Monek added.
Source: Association Adviser enews and Naylor, LLC 2011 | N=120
Our reader poll mirrors the findings we detected in our 2011 Association Communication Benchmarking Report this spring. In that report, more than 40 percent of the 700 responding associations told us their member communication vehicles were required to operate as a profit center (generate non-dues revenue), and only 19 percent said they could run their member communication vehicles as cost centers.
That report also told us that more than half (55.6 percent) of associations now ask advertisers and sponsors specifically if they’re getting their money’s worth, and nearly two-thirds (62.3 percent) told us the feedback they get from advertisers and sponsors is directly incorporated into their pricing considerations.
How has the role of NDR changed at your organization?
"I would say NDR now accounts for 50 to 75 percent of total revenue overall," according to Ramona Jones, Vice Chair of IBAT Services for the Independent Bankers Association of Texas. "At successful associations, member-dues represents less than half of total revenue. Ten to 15 years ago, dues represented 50 to 75 percent of total revenue. So the ratio has just about flipped."
The 16,500-member Building Owners & Managers Association (BOMA) is still pretty dues-oriented, according to President Henry Chamberlain, but he expects NDR to account for between 50 and 60 percent of BOMA’s revenue over the next 10 years. "The big wild card is what the membership model will look like for most associations. Will members keep signing on for the whole package or will they want various membership benefits on an a la carte basis?" he asked.
Don’t miss our Corner Office profile with Henry Chamberlain in today’s issue.
Areas for NDR growth
For the New York City-based Direct Marketing Association (DMA), its online career center has been very successful, but it wasn’t until it was outsourced to a specialized vendor that it began to gain traction with members, noted Ken Ebeling, DMA’s senior vice president of membership. "We’re now providing a much better user career experience for our members and that comes back to support the dues equation."
In addition to education programs, CGSA’s Cousineau said the other area of opportunity is advertising, "provided that you can be flexible and adjust to meet the ‘flavor of the day’ with respect to the management companies that are managing the larger corporate contracts." According to BOMA’s Henry Chamberlain, his organization is also seeing strong demand for advertising in its directory, magazine, webinars and conferences. BOMA is also seeing good results from its onsite education programs and sales of its best practices books, he added.
AGC’s Monek agreed that webinars and other continuing education programs have been very successful. In a tight job market, he said members really want to enhance their professional development. At the same time, their bosses want to keep travel costs down and keep time out of the office to a minimum. Webinars are a great solution. "We charge for many of our webinars, but we often get them sponsored and that allows us to make the webinars available free of charge, or at a reduced cost for our members."
IBAT’s Jones agreed that educational programs that don’t require travel and that can meet the multiple needs of the staff "are on the upswing." Webinars and live clusters, in which small groups of members with similar requirements for training can join together for 2- to 3-hour after-work programs have been very popular, she added.
According to TSAE’s Beth Brooks, most associations depend on meetings and trade shows for a lot of their non-dues income.
"I have also seen growth in online everything: education (all types), as well as online publications and ad sales," she said. "For associations that have a credentialing program, I have seen a big upturn in their participation. Also, the growth of job banks has been significant, and for some associations, sponsorships have grown as suppliers see the association as a great centralized way to reach their audience."
Common NDR mistakes made by associations
"One error that has remained constant for most of my association career is not considering the support that is required at the staff level to sustain a new program for the long term," related CGSA’s Cousineau. "The second most common mistake is not recognizing when a program has passed its ‘best before’ date."
TSAE’s Brooks observed that associations often rush to add programs and services that they think members will buy. "They don’t do any research, but they expend a lot of staff time developing and marketing, and then members don’t participate," she said. She advises associations to be deliberate about what to offer, perhaps even doing trial tests. When working with affiliate program, due diligence in vetting the company or service is key.
AGC’s Monek cautioned that NDR is the future, but you can’t get so swept up in selling that you lose sight of the educational program. "It’s incumbent on us to offer the right content—government compliance, for example—with the right credentials."
IBAT’s Jones said that when exploring broad partnerships and affinity programs, it is imperative for your board to engage professional advisers (legal, accounting and intellectual property consultants) who are familiar with associations versus for-profits. Also, you must invest in staff with energy, relationship building outreach, curiosity and marketing savvy."
While most associations have a few visionary people on staff, everyone on your team has to learn to become more entrepreneurial, urged AGC’s Monek. DMA’s Ebeling said that it’s not just about looking for new streams of revenue; it’s about learning how to operate in a last-minute, just-in-time environment.
"We used to know three or four months out how a conference was shaping up," he said. Now, even three or four weeks out, we still don’t have a handle on how many attendees and exhibitors are coming. People are still spending money; they’re just waiting till the last minute to commit. Forecasting has become a real challenge. I don’t see that changing anytime soon."
While no one knows exactly what the ideal association model will look like in the future, it’s clear from our experts that you’ve got to keep asking yourself—again and again—how you’re delivering real value to members and how you can provide an experience that they can’t get elsewhere in the real (or online) world.
Hank Berkowitz is the moderator-in-chief of Association Adviser enews.
Rate this article 5 (Excellent) to 1 (Poor). Send ratings and comments here
By Kelly Donovan
Most of the discussion about non-dues revenue focuses on how to earn it. What about the flip side: How are associations spending non-dues revenue?
This question led us to the Peach State, where two statewide associations, the Georgia Association of Convenience Stores and the American Institute of Architects Georgia Association have developed some creative ways of distributing association funds that help members upgrade facilities, represent their industry with the state legislature, give needed facelifts to their communities, go back to school and continue their memberships.
- Many associations use non-dues revenue to help members and future members through scholarships, business grants and community projects.
- Remaining flexible about how non-dues income is distributed is key to ensuring those funds are used for the most relevant and needed purposes.
- The Georgia Association of Convenience Stores and the American Institute of Architects Georgia Association are two groups who creatively use non-dues revenues to enhance their membership experience.
Tell us how your association uses non-dues revenue on our Association Executive Roundtable page on LinkedIn.
Georgia Association of Convenience Stores
The Georgia Association of Convenience Stores (GACS), an organization of convenience store operators formed in 1973, works to promote and sustain convenience store (C-store) business through education and professional development, helping operators run more efficient operations and legislative initiatives.
Like many associations, GACS offers scholarships for college students. These 18 scholarships are funded entirely through an annual golf tournament and voluntary donations made in tandem with membership renewals. Unlike many associations, however, GACS’ scholarships are open to members, children of members and employees of member firms.
"Part of ensuring a well-rounded, educated and professional C-store industry is opening up educational opportunities to as many interested people as possible," said GACS President Jim Tudor. "We offer more than $10,000 in scholarship money every year to members of our GACS family who want to pursue higher education in hopes that someday they’ll put that education to use bettering C-store operations."
Those scholarships include the Brittany Schmeelk Scholarship, named in honor of the late daughter of a GACS board member; the Nancy Bivings Scholarship, named in honor of an 18-year GACS member; the Bill Hoskinson Scholarship, named in honor of a member and past chair of GACS’ Supplier Committee; and the Hayes Bryan Scholarship, funded in part by the McLane Company in honor of a former employee who also served on GACS’ Supplier Committee. The Schmeelk scholarship also pays for a full registration and guest registration, plus accommodations, at GACS’ annual conference, so the recipient has the opportunity to expand his or her mind (and contacts list) through professional workshops and networking.
Giving C-stores a facelift through the Lighting Retrofit Program
Out in the field, C-store owners are always looking for ways to make their day-to-day operations more efficient. With the green movement gaining traction over the past decade, GACS wanted to provide its operator members with funding to help make their stores more eco-friendly. The GACS Lighting Retrofit Fund provides low-interest loans to operators who want to replace worn-out lighting with upgraded, retrofitted fixtures. GACS members that receive lighting upgrades pay back to the fund their calculated savings over the first 18 months, as the savings accumulate through lower energy bills. The retrofit program gives store owners and operators the added benefit of a facelift for their C-store, as the new fixtures often shines brighter and cleaner than before.
GACS initially funded this program through a $450,000 federal grant. The program is so popular that dozens of operators have benefited so far, and with the initial grant money distributed and savings being reinvested in the fund, GACS expects the now self-sustaining program to continue for several years.
"We’re so pleased with how this has turned out, and how members who initially took advantage of this opportunity are investing in other members by contributing the difference between their old and new energy payments," said Angela Holland, vice president for association services.
Supporting Community Safety Activities
An upgraded C-store needs customers, and customers won’t visit if the store is perceived to be located in an unsafe area. To address perennial safety issues and show support for their customers, GACS supports a number of community safety organizations at the local level, including Crime Stoppers, Fire Safety Week, Friends of Agriculture and other local nonprofits.
GACS also encourages individuals and organizations to support GACSPAC, a state level political action committee that makes contributions to state level candidates and members of the Georgia General Assembly who support the convenience store industry.
"We have built an active legislative agenda over the years to ensure that our members aren’t adversely affected by new legislation, and that the convenience store industry can continue to thrive in Georgia," said Tudor. "Our individual members and member organizations are generous in ensuring that our industry will continue to have a lobbying voice."
Over in Atlanta, the American Institute of Architects Georgia Association works to increase the public's general knowledge and awareness of architecture and the role architects play in the built and planned environment.
The Architecture Foundation of Georgia, its 501(c)3 affiliate, complements AIA Georgia’s mission by collecting and channeling funds for educational opportunities for architecture students, community construction and renovation projects, and awareness of the value of architecture and the beneficial role of architects. Money is raised mainly through donations from its members, although more public fundraising efforts are underway.
At first, the foundation’s main activity was awarding scholarships for students at the Georgia Institute of Technology's School of Architecture. The scholarship program now provides four to five scholarships per year for students attending Georgia Tech, the Savannah College of Art and Design (SCAD) or Southern Polytechnic State University, Georgia’s three schools with accredited architecture programs. The money helps students in their final semesters of study pay for classes, books, supplies and even studying abroad—an important career-broadening experience for many budding architects. Over the past few years, thanks to matching funds from the national AIA organization, the foundation has given $7,500 annually to about one dozen students—and potential future AIA members.
"The primary purpose of these scholarships is to support the industry by giving a boost to our budding colleagues," said Reed. "But by granting financial help to these deserving students in the name of the foundation, we also strive to encourage their future membership in AIA Georgia and a healthy roster statewide."
Revitalizing Communities through Architecture
In addition to educational opportunities, the foundation has helped communities in need of money for architecture-related projects, such as Habitat for Humanity houses, public art and neighborhood revitalization. AIA Georgia members donate time, money and architectural expertise for projects, such as a student competition in 2000 to build a gateway sculpture at a neighborhood entrance.
"Our community grant program went on hiatus these past few years because of the sluggish economy and organizational restructuring," said Reed. "However, we’re in the process of starting it up again with a renewed focus on local, ad hoc grassroots organizations that want to clean up their communities and help their neighbors through these difficult times. For the first time, some of the Foundation’s board members are not architects but accountants, business strategists and grant writers, and we’re excited about the diversified experience and business knowledge they can use to help us steer funds into more effective projects."
With many community spaces suffering from neglect because of foreclosures and decreased tax rolls, the board is hoping to provide money to smaller projects aimed at cleaning up graffiti, fixing broken public property and other cleanups designed to refresh citizen pride along the lines of the "broken windows" theory.
Organizations that receive grants from AIA Georgia must partner with a local AIA chapter to complete their projects. "This way, our members have the chance to interact with each other outside of their firms and learn first-hand about revitalization or construction needs in their communities, while the communities benefit from our members’ time and labor as well as the grant money," said Reed. "Architects by nature are used to bringing people together around creative solutions. Some of these volunteer efforts might ultimately help an out-of-work member find their next job."
Supporting students as they finish their education, assisting communities as they work to maintain pride and safety in their environment, and helping current members sharpen their skills and improve their businesses—at Naylor, we couldn’t think of better ways to invest hard-earned funds.
Now it’s your turn: Does your association use non-dues revenue in a creative or philanthropic way? Send your story to Kelly Donovan or tell it on the Association Executive Roundtable LinkedIn page.
|Rate this article 5 (Excellent) to 1 (Poor). Send ratings and comments here.
This month, the Corner Office spotlight shines on Henry Chamberlain, President and COO of Washington, D.C.-based Building Owners and Managers Association (BOMA) an international federation of more than 100 local associations and affiliated organizations. Founded in 1907, BOMA’s 16,500-plus members own or manage more than 9 billion square feet of commercial properties.
Association Adviser: Henry, tell us a little about your background
Henry Chamberlain: I’m your classic PR and marketing guy. I was Director of Communications for the Gannett Company during the launch phase of the Nation’s Newspaper—USA TODAY—and began my career in Washington working in the press office of the Carter/Mondale presidential campaign. I’ve also managed accounts for two public relations firms. I’ve been with BOMA since 1985 and held a variety of roles until being promoted to President in 2001.
- An association leader’s job is harder than it used to be thanks to economic, technological and age demographic factors.
- Best-in-class organizations work hard to train and nurture their staffs and find "blue oceans" in which to swim without competition.
- In order to stay relevant, associations really have to re-think their business models and unique value propositions.
AA: How big an industry does BOMA represent?
HC: It’s a $118-billion marketplace that generates 996,000 jobs directly and accounts for 21 million tenants in our members’ buildings. Some of our prominent members and partners include Allied Burton, Cisco, Kimberly-Clark, Rubbermaid, Ingersoll Rand, Trane and many smaller organizations.
AA: How would you describe a typical BOMA member?
HC: It’s someone who’s managing three to five buildings—about a million square feet all told—and all the problems that go with it. This may surprise many people, but our members are more than rent collectors. They’re not just sitting in their offices. They’re out and about working with people, and they truly care about their tenants. They’re trying to figure out how they can position their buildings for success. They know tenants will re-up if they help them succeed.
AA: Aside from the economy, what other challenges does BOMA face?
HC: Like many associations, what used to be part of our unique value proposition is now offered free on the Web. For example, anyone can find lots of free information about things like payback periods, property life cycles, tax credits and the like. They don’t necessarily need us for that. The information isn’t all reliable and carefully vetted, but it’s out there free to the public. Associations really have had to shift to a new business model.
AA: How so?
HC: Well, for instance, associations have to think about how they can help members be more successful in their careers. In our case, that means providing more professional training and education on business asset management, tenant relations, building security, community relations, etc. It’s not just how to manage a building. It’s how to define your role (and your building’s role) in the community.
AA: It sounds like advocacy is very important to BOMA.
HC: BOMA has been a leader on the green side for a very long time—before it became fashionable to be green. We’ve won EPA/Energy Star awards several times. We’ve created the biggest green menu possible for property managers—best practices that drive performance.
AA: How would you describe your leadership style?
HC: People watch you by the example you set and how you build and nurture your team. I’m a big believer in continuous learning and the continuous training of our staff. You can’t do it all alone. You have to have a staff who’s going to help you figure out what’s coming next and how your organization is going to be the one that gets there first.
AA: Is it tougher being an association leader than it used to be?
HC: Let’s just say association CEOs didn’t have to work as hard 10 to 20 years ago as they do now. You really have to be more creative and learn to do more with less. It’s not just the economy; it’s the profound impact of technology. It’s a 24/7, real-time, instant access environment for association leaders, as well as their staffs and their members. You’re on call all the time—just like our members. Believe me, when a building owner gets an emergency call at 2 a.m., they have to deal with it ASAP. They can’t say they’ll get to it when they arrive at the office in the morning.
AA: Do you have any particular strategies for recruiting and retaining the younger, up-and-coming building owners and property managers?
HC: You have to stay relevant and visible. Companies are really reaching out via internships. They’re not just offering practical job training, but they’re doing a lot on the advocacy front. Younger members aren’t just looking to build their careers; they’re looking for causes they can get behind. We’re working with Georgetown University on a program emphasizing sustainability and careers in property management.
AA: What impact has the economy had on BOMA membership?
HC: We had slow and steady growth throughout the early part of this recession. We lost a little in 2010, but now it’s coming back. It’s been tough, but not necessarily from a financial perspective. What’s been more troubling is that a lot of experienced, mid-level building managers—"the next tier," we call them—have lost their jobs and so we don’t have the mentors who would normally be guiding the Millennials through their careers. That’s where the association can really step in and provide value.
AA: Speaking of younger members, can you tell us about BOMA’s mobile and social media efforts?
HC: As I mentioned before, BOMA members are not sitting in their offices a lot. They’re on the go, working at multiple locations. Mobile has been a particularly effective way for us to get information out to them, and we have apps to facilitate that. We also have a Facebook page. Our LinkedIn platform has about 10,000 members using it for networking and problem solving. We post videos on YouTube. Our PR and marketing efforts go through Twitter to reporters as well as to younger people who are searching for expertise on particular topics.
AA: Are association directories and buyer's guides still relevant in this social/mobile era?
HC: Absolutely. Our directory has been around for more than 90 years, and it keeps evolving. We’ve been working with Naylor for 10 years now. Naylor is always looking to the future and has really helped us take our directory and online buyer's guide to a new level. Our members love it because it’s accurate, easy to use and easy to access. They really use our directories to network with each other. We’re in a very competitive industry, but our members are very supportive of each other. They’re very gregarious and willing to help each other problem solve.
AA: Does BOMA have a lot of competitors?
HC: You bet. We have at least 18 other associations trying to get our members’ attention.
AA: Has competition and the economy helped spark innovation?
HC: Our industry has always been very innovative—through good times and bad. For instance, we had a 6 percent overall drop in building utility costs last year, even though energy prices keep going up. That kind of innovation goes right to the bottom line.
AA: BOMA has a reputation for being very forward thinking. Can you tell us a little about your culture of innovation?
HC: First, you have to get good people on board. They are your advance scouts, always looking for good ideas and everyone at the organization is empowered to suggest new ideas. We’re very democratic in that way and lots of great ideas come through our local chapters. Sure, we do strategic planning sessions, but you’ve got to look at innovation in a variety of ways. We get inspiration from 7 Measures of Success, from The World Café and from Malcolm Gladwell. We’re also big believers in Harvard’s Blue Ocean Strategy—what niche can we serve really well and keep all to ourselves? Contrast that to a red ocean—a mature market—in which our competitors are already swimming.
AA: So what’s keeping you up at night?
HC: Are we staying ahead of the curve? Are we seeing around the corners? Are we swimming in a nice blue ocean or heading into the red?
Don’t forget to take our latest online reader poll. Fast results. Find out what your peers are thinking.
|Rate this article 5 (Excellent) to 1 (Poor). Send ratings and comments here.
Did You Know?
By Association Adviser staff
Are associations more than dues gathering organizations? Last month’s Association Adviser enews reader poll indicated yes, as nearly half (45.8 percent) of respondents told us non-dues revenue will be an increasingly important component of their 2012 budgets. One-third of respondents (30 percent) said non-dues revenue will have about the importance as it did in 2011, and less than one in four (24.2 percent) said non-dues revenue will be less important.
As a percentage of your 2012 budget, what is your expectation for non-dues revenue?
Source: Association Adviser enews and Naylor, LLC 2011 |
The latest reader survey results seem to build on the findings we detected in January’s 2011 Association Communication Benchmarking Report
. In that report, more than 40 percent of the 700 responding associations told us their member communication vehicles were required to operate as a profit center (i.e. generate non-dues revenue), and only 19 percent said they could run their member communication vehicles as cost centers.
By Marcus Underwood
By now, you've probably seen (or engaged with) some form of interactive advertising. The Internet is filled with it. A banner ad that invites you to mouse over it to see a video or animation is one early example. But, that's still mostly a one-way communication. Scanning a QR code, "liking" a company on Facebook or "following" that organization on Twitter are also forms of interactive advertising. What these examples all have in common is the goal not only to gain brand awareness for the advertiser, but to employ a much more powerful concept: engagement.
- Interactive advertising has little downside. It is inexpensive, easy to implement and easy to measure.
- The challenging part of interactive advertising is to give time-pressed members something compelling enough with which to engage.
- Always remember to reward members who take the time to engage with
you. It's not about you. It's about what's in it for them.
At its core, the goal of any advertising campaign is to sell something. Whether that product is a soft drink, a car or a political agenda, the ultimate goal is to get people talking about—and eventually buying (or buying into)—what is being advertised.
However, it also can be said that the real purpose of most advertising is to invite interaction with a particular product beyond simply viewing a picture or hearing a pitch. Following this logic, advertisements have begun to interact directly with consumers and even to offer them the opportunity to interact with those advertisements. This provides much greater incentive for people to engage further with that brand or product or organization.
Done effectively, interactive advertising has very little downside, as your target customers or members choose to make the connection. The challenge for you is to give them something compelling enough with which to engage. For example, if someone takes the time to "like" you on Facebook, what's in it for them? Is it just a "thanks for liking us" message? If so, it is unlikely that they will feel satisfied or truly engaged.
Instead, provide them with something they can't get anywhere else. Make them feel like they are getting something others aren't. Maybe it's a sneak peek at a new publication. Maybe it is a discount on something from your store or an event. Or maybe it is unique access to a "community" of people that have the same interests. Whatever it is, make respondents feel as though it was worth the effort and that they are getting something that is special.
Savvy associations can use these same concepts to drive participation at events and increase membership. A member (or potential member) who feels included or special in some way is far more likely to attend your events and buy your publications.
Technology has opened the door to this two-way marketing, and it is typically very inexpensive to implement. It undoubtedly takes more effort to come up with these interactive marketing campaigns, but the payoff can be huge for you and your members.
is vice president and general manager of NaylorNet, the online media solutions division of Naylor, LLC.
Don't forget to take our latest online reader poll. Fast results. Find out what your peers are thinking.
Rate this article 5 (Excellent) to 1 (Poor). Send ratings and comments here.
Sponsorship is a cash or in-kind fee paid to a property (typically sports, entertainment, non-profit, event or organization) in return for access to the commercial potential associated with that property. Don’t confuse sponsorship with a donation or philanthropy. In those cases, the donor is not really expecting a measurable return on his or her investment.
- Do your homework. There is no excuse for not knowing a great deal about your prospect and the decision-maker. "Failing to prepare is preparing to fail."
- Pay attention to details. Decision-makers are swamped with sponsorship proposals and are actually looking for quick ways to eliminate the stack of proposals on their desks. Misspelling a company’s or decision-maker’s name will get you an express ticket to the wastebasket, as will "All About Us" proposals.
- Tailor the pitch to the prospect. Approach the sponsor with a marketing plan instead of a proposal. Sponsors are looking for any edge they can get on their competition, and your plan should be based on benefits that contain value and hit the mark with your audience.
- Putting the pitch on paper. It’s not about YOU—it’s about THEM and the benefits to THEM need to be listed early in any presentation.
That’s a pretty cut-and-dried definition of sponsorship, but that’s exactly what sponsorship is—straightforward and to the point. In my 35-plus years of buying, selling and talking to executives about what they want to see in sponsorship programs, I’ve learned that much of the success lies in the preparation and the pitch. Accordingly, if you fail to get past the pitch, then nothing else matters. So let’s talk about how to make the perfect pitch.
As I meet with associations, professional sports teams and colleges around the country, I see a number of fundamental mistakes being made in how they craft sponsorship proposals—mistakes that are sure-fire deal breakers even before the entire proposal is read by the prospective sponsor.
Here’s a list of things you must do to avoid an early rejection:
1. Do your homework!
One of my favorite sayings is, "Failing to prepare is preparing to fail." And nowhere is this quote more appropriate than with sponsorship selling.
To that end, before you put pen to paper (or fingers to keyboard), make sure you know about the company and the person you’re pitching. The Internet has made it so much easier than before to learn valuable information about your prospect such as:
1. What kinds of things have they sponsored in the past?
2. What interests or causes do they support?
3. What are their business goals?
4. Is the decision-maker a leader in the community?
5. What are the decision-maker’s interests or hobbies?
In this uncertain business climate, the psychology of corporate sponsorships has shifted. For sponsors, it’s no longer about wearing the altruistic "good guy" hat; it’s about "what’s in it for us?" Very few decision-makers buy sponsorships these days without a value proposition in mind. It doesn’t matter whether it’s for sales, entertaining customers, employee relations, awareness or visibility, to name a few. You better be able to demonstrate value.
So, do your research and make sure your proposal is a close match with the potential sponsor’s needs. I see too many proposals that are front-loaded with information about the selling property and NOT enough about the prospect’s needs.
A municipally funded sport association recently asked me for help on a sponsorship pitch to finance a new artificial playing surface for its outdoor sports facility. Unfortunately, the first 15 pages of the proposal were all about the sports association and its history—not about the benefits a sponsor would get. When you have a 20-page proposal and the first 15 pages are about the selling entity—not about what’s in it for the buyer (association, college, non-profit, etc.)—that reduces your odds of success by at least 25 percent.
It might sound crass and a little brash, but decision-makers are only interested in their company’s benefits and how this sponsorship helps their company and their goals and objectives. Remember: it’s not about me; It’s about THEM.
2. Pay attention to details. It’s the little things that often beat you
Make no mistake about it: Decision-makers at corporations are inundated with sponsorship proposals, and, quite frankly, they are looking for reasons to say "no" or to reject sponsorship requests just by the sheer numbers of people vying for their participation. Simple things can definitely make a difference in the sponsorship decision. For instance, make sure you spell the contact’s name and company correctly. Personalize the proposal for each company you’re pitching and, of course, make the proposal look as professional as possible.
I’ve been on both sides of the bargaining table. When I’m sitting on the receiving end (being pitched), I see many proposals with misspellings, and it’s clear they’re "cut and paste" jobs often containing the name of another company in the middle of the document. Those immediately go in my "circular file." Why would anyone do business with someone who can’t get the name of the company or the company’s brand right, let alone the decision-makers' name?
3. Tailor the pitch to the prospect
Unlike a typical gold, silver or bronze sponsorship, I like to call sponsorship pitches "marketing plans." These days, sponsors are looking for more "bang for their buck," and they are looking for ways to make their brand stand out and be noticed. They also are looking for something that their competitors don’t have—like being the Official XYZ product of the ABC Association. If a trade show is part of the equation, being the sponsor of a specific area sets the sponsor apart from his competition, etc. Of equal or greater importance is the audience fit and how the sponsorship will reach that audience and convert the audience into buyers of the sponsor’s product or service. In short, the sponsor expects its investment to provide a measurable return. Help potential sponsors say "Yes" by pitching your association’s audience, value and customized marketing plan.
4. Putting the pitch on paper
Assuming that you have done your homework on the prospect, identified your association’s assets and priced them accordingly (See the September 2011 Association Adviser enews), it’s now time to put the marketing plan or proposal pitch together. I’m also assuming you know the amount of money you want from this sponsor or have a feel for how much you think the sponsor might be willing to spend.
As stated earlier, the document should, after a brief introductory paragraph, begin with the listing of benefits to the sponsor. I put these in categories and spell out the benefits. For example:
- Category exclusivity
- On-site signage
- Print (buyer’s guide, trade show advertising, etc.)
- Electronic (website, banners, etc.)
- ID on collateral materials
- Title of a proprietary area
- Hospitality opportunities
One very important point here: DO NOT SHOW THE PRICING OF EACH SPONSOR BENEFIT IN THE DOCUMENT!
The objective of a sponsorship package is to be profitable. You must believe that your assets have the value you have assigned to them even though there may not be significant costs to produce. For example, a sampling tent costs very little to produce, but has intrinsic value to the sponsor. In this example, there is a lot of profitability in a sampling tent/opportunity. Moreover, if you show your prospect your pricing sheet, he or she will "cherry pick" the items that they want and there goes your profitability.
Lastly, I label the last page of the plan the "investment" page. This is where the price of the sponsorship is listed and where the negotiation begins. I typically do not show a gross price and then a discounted price. My feeling is that if we have priced our assets properly and know our profit margins of each asset, it is much easier to come down in price after the prospect gives us feedback than discounting before the prospect makes its first counter. There are lots of negotiating tips in sponsorship selling, but we have to get the pitch right before we ever get to the negotiating table. Follow my advice and you won’t make the mistakes that will get you an early turndown. Good luck!
Bob Burris is an expert in sponsorship package evaluation, sponsorship sales strategies, sponsorship sales training and developing sponsorships that maximize the sponsor’s investment. He is the author of How to Sell Sponsorships, Tickets & Popcorn. For more information, please visit www.theburrisgroupllc.com.
Don’t forget to take our latest online reader poll. Fast results. Find out what your peers are thinking.
Rate this article 5 (Excellent) to 1 (Poor). Send ratings and comments here.
Networking & Opinion
Best of the Web
12 Ways to Develop a Loyal Community for Your Blog
Twelve short steps to cultivating content and conversation that will stimulate your members and encourage greater participation on your blog.
Mark J. Golden
Golden's Rules for Associations
In our quest to become more businesslike, or more competitive with for-profit vendors of services, information and product, are associations voluntarily sacrificing the very thing that makes them uniquely competitive in a world of expanding options for consumers?
Associations Show Signs of a Comeback
The Wall Street Journal
After two years of membership losses, budget cutbacks and a scaling back of annual conventions and expos, many professional and trade associations are staging a cautious comeback.
@SHRM Laroche: mentoring, someone explaining the unwritten rules of an organization, is essential. #shrmdivcon
@affiniscape Something to consider! "10 Things Prospective Volunteers Worry About Before They Join" http://t.co/9ovIrRJG #assnchat
@kikilitalien Is your association struggling with whether to focus on a web-based app or a mobile app? What app questions do you have? #assnchat
Follow Naylor on Facebook and Twitter!
Visit Naylor at These Important Industry Gatherings
Dec. 7, 2011
Does your association have a magazine, newsletter, directory or website in need of revival? Engage your members with an exciting and informative publication produced by the publishing experts at Naylor, LLC. Contact us today for an assessment of your current communications plans and non-dues revenue strategies.
What was the most important (positive) surprise for you in 2011?
Membership stabilization/growth in a tough economy
Improvement to our bottom line
Popularity of our social/mobile media
The success of our member communications programs