By Vanessa De Groot 19 October 2017

The deals don’t have to be as impressive as Dexus’s support for the Sydney Swans, or insurer AIG’s hook-up with the All Blacks. In fact, taking small steps is probably the best way to learn the commercial benefits of sponsorship.

Brand equity, the financial value attributable to widespread recognition of a company’s name or logo, is an important asset for any commercial operation. Positive brand awareness can lead to more business and a healthier bottom line, especially if it’s well leveraged. 

Traditionally, advertising was the way companies reinforced and created brand equity. But sponsorship is another way. And given how effective it can be at extending brand reach and growing awareness, sponsorship deserves more emphasis than it usually receives in marketing strategies.

There are many sponsorship partners to choose from, especially in sport, arts and events. Bigger companies are regularly approached with suggestions for sponsorship partnerships, but a company can always take the initiative itself. If you find an organisation with appealing parallels to your own brand, it’s acceptable to make the first approach. 

The decision to link your brand to that of another organisation should not be taken lightly, though. The partner must be selected only after thorough consideration to ensure there’s a good fit, and specifically, that the cultures of the two organisations are compatible.

Pairing with another esteemed brand with similar values will foster credibility for both and resonate with customers, which will, in turn, impact the bottom line.

Is their audience your target?

Another factor to be taken into account when considering what or who to sponsor, is the need for the sponsorship candidate to have an audience that will take an interest in your brand. 

While it’s true that the key or main point of sponsorship is to extend your brand reach, the sponsorship will be most beneficial if it allows you to reach an audience that also wants to use your company’s services. For example, partnering with a sports organisation, no matter how high profile, may not be the best choice if you suspect fans of that sport don’t need what your company provides. 

Another part of reaching your target audience is geography. You want the sponsored team or event to be within proximity to the people your brand is trying to reach.

The Swans' culture aligns to Dexus and what they aspire to be.

How Sydney Swans help Dexus kick goals

In 2017, property group Dexus entered into a sponsoring partnership with the Sydney Swans, and the Dexus logo is now proudly displayed on the football oval.

Dexus chose to partner with the AFL club because the two brands were compatible on many levels.

“The Swans have a really good culture – a high-performance culture – and that definitely aligns to Dexus and what we aspire to be,” says Raechelle Inman, Head of Marketing at Dexus.

“It comes back to our core brand values and strategy, and it’s about awareness, equity and attracting customers. Our sponsorship criteria aligns to those objectives.”

The two brands are also geographically compatible, both being headquartered in Sydney.

Two other general features of the AFL that attracted Dexus to the sponsorship are the code’s diversity values – it now offers a thriving women’s competition – and the fact that AFL is growing in popularity in New South Wales from grass-roots all the way to the senior Swans team.

Additionally, the Centre Circle, the Swans’ group consisting of the business and community leaders that support the club, is a natural fit with the Dexus customer base. An innovative way Dexus continues to partner with the Swans ongoing has been to employ a player, Callum Sinclair, as a marketing intern one day a week, working around his team training schedule.

The Swans have a really good culture – a high-performance culture – that aligns to Dexus and what we aspire to be. Raechelle Inman, Dexus Head of Marketing

The All Blacks as Japanese super heroes

Another example of two brands that are well aligned and work effectively together to extend each other’s reach are the New Zealand All Blacks and global insurer AIG. They share the values of preparation, innovation, global community and safety.

The two organisations recently collaborated on a Japanese ad campaign called Tackle the Risk. In it, the All Blacks protected citizens on the streets of Tokyo from danger. The campaign drew clever parallels, focusing an insurance and risk mitigation in an innovative way. It also linked to the impending Rugby World Cup, which will be held in Japan in 2018. It was a great way to generate interest in the insurance industry and the AIG brand, and metrics showed the campaign achieved cut through.

Direct as well as indirect benefits

Businesses must aim to be strategic about sponsorship agreements. It’s not enough for a company name to be in the spotlight at an arts performance, conference, or football game. 

The sponsorship needs to be brought to life in other ways, too. Any company thinking about a sponsorship agreement needs to ask whether and how the extended brand reach can be leveraged internally as well as externally.

For example, can the existence of the brand alignment be promoted and reinforced by reminding employees and customers with signage in the office? Or by inviting existing customers to sponsored events? If so, who will be on the guest list, and for what purpose? You can also leverage the sponsorship internally, in turn benefiting employees and improving engagement. Dexus believes this aspect of sponsorship is very important. It runs internal competitions, ticket give aways to Sydney Swans games, as well as organising pre-game festivities in the office. 

Sponsorship budgets will determine the choice of sponsorship partner and the level of sponsorship, which can range right up to expensive naming rights.

Whatever choices are made, it’s important to get the best value for the sponsorship dollar by looking at both what you get from your partner and the return on your investment from a business perspective,including new business it helps attract, and how the sponsorship helps with customer retention.

Companies can be fairly confident about the return on their investment if they have selected a sponsorship partner well, but the exact return is not something that can be easily quantified. Brand awareness can be measured through surveys, however, like any commercial partnership, if the sponsorship doesn’t appear to be benefiting the business in the way that was envisaged, it should be revisited to see if tweaking the sponsorship details can have a beneficial effect.

For sponsorship of a sporting team, this might include adding access to players for customers or staff or having more hospitality at the ground, or offering kids’ clinics.

Remember that, like any business deal, the sponsorship agreement needs proper due diligence before the contract is signed, and then ongoing maintenance of the relationship, in order to make it work for both sides.
How to make sponsorship work for your brand

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