Using Strategic Sponsorships to Build Your Brand
We’re all familiar with how brands use sponsorship – from the local law office that touts its sponsorship of the Fourth of July parade by walking in it while carrying a banner, to a NASCAR race on national television where it seems there’s not one square inch of real estate left unbranded.
According to sponsorship consulting company IEG, sponsorship was the fastest growing form of marketing in North America in 2013, and the organization projects that North American companies will spend $20.6 billion in 2014. This is a good indication that many are seeing the value in sponsorships. Therefore, a good marketing plan for mortgage lenders and other industry suppliers of products and services who wish to achieve upper-echelon status should include sponsorship opportunities.
Obviously, sponsorships can be a huge boon to companies and their brands — $20 billion doesn’t lie. Sponsorships come in many shapes and sizes, and may include sponsorship of:
- One-time special events
- Annual community events or mortgage industry events
- Networking and business events, including tradeshows
- Local sports teams
- Local or industry awards
- Broadcast announcements
The primary reason companies include sponsorship as part of their marketing plans is to increase brand awareness, whether that’s establishing or strengthening their brand, or to change their brand image.
By associating your company’s brand with an event or entity that your target audience views positively, you’re shaping attitudes and helping to generate a positive reaction to your brand. Ultimately, your goal is to improve how your brand is perceived by your target audience. This happens in a variety of ways, including:
- “Good Neighbor:” Local sponsorships are especially effective in generating goodwill from consumers because they see the sponsoring company investing in the community and contributing to the community’s economic growth. This is particularly true if a local event can’t take place without sponsorship support.
- Competitor Differentiation: Sponsorships can set your company apart from competitors. What can customers expect from your company that sets it apart from others? How can you demonstrate that difference through a brand sponsorship?
- Enhancing Relationships: Sponsorships typically offer companies perks such as VIP seating, private receptions, exclusive tickets, etc. Leverage these perks to build relationships with key employees, top customers and prospects, and referral partners.
A secondary benefit of increasing brand awareness through sponsorship is driving sales and/or creating positive publicity that drives sales.
Keep in mind though, that sponsorship is not advertising or sales, and companies that attempt to make it such, will be viewed by consumers with annoyance, or at worst, scorn. According to the Wharton Customer Analytics Initiative, sponsorship is an active medium that drives emotional connections with a brand. Advertising is a passive medium that builds awareness.
Make a Strategic Decision
One of the biggest mistakes companies can make when choosing to sponsor, is making sponsorship decisions based solely on what “feels” best or what the CEO’s pet team or charity is. Without taking into account the tangible business aspects of a sponsorship and how it’s structured, it will be of little value.
The most effective sponsorships are for those events that help consumers bring meaning to and build on their experiences, and are authentic to people’s everyday lives. If possible, choose events that feel organic to consumer’s lives, that your company genuinely cares about, and that strategically matches your company’s values. For mortgage companies, common values include excellent customer service, stability, trust and security. Therefore, it would make sense to choose an event that similarly matches those values.
A 1999 study by the Journal of Advertising on building brand image through event sponsorship showed that when an event and brand are matched on either an image or functional basis, the image transfer process between the event to the brand is enhanced.
In addition to how an event will match with your company’s values, other evaluation criteria include:
- Who is the target audience?
- What do you want to achieve and how does the event help you do that?
- What will the sponsorship say about your company and brand?
- How much opportunity for exposure does your company have with the target audience?
- Is this an event that your target audience genuinely cares about?
- What potential for damage does the sponsorship expose your brand to? The last thing anyone wants is an association with a corrupt, immoral or unethical person or organization.
- What are your competitors doing? A sponsorship won’t do much to differentiate your brand if your competitors are sponsoring similar things.
Last But Not Least: Leverage, Leverage, Leverage
According to IEG, transactional sponsorships — those that simply exchange money or in-kind commitments for a series of rights and benefits — will remain at a disadvantage compared to those sponsors that establish partnerships and create value through content development or other collaborations.
Essentially, don’t be one-dimensional. Don’t just sponsor the Fourth of July parade and carry the banner. Have your CEO in the dunk tank after the parade to show how relatable your company is. Staff an event with employee volunteers in “Ask Me” shirts to demonstrate your company’s commitment to customer service. Ask yourself how you can leverage your sponsorship directly and indirectly at the event and through various communication channels.
When executed thoughtfully and strategically, sponsorships are an excellent brand building tactic.