How to...balance delegate and sponsor expectations
Richard Morris, director of Active Media Events, says that associations typically have a strong grasp of what attracts delegates to their events, but when it comes to understanding purchasing authority – the decision-makers who control budgets – their understanding drops significantly.
This lack of clarity hinders associations looking to increase event sponsorship revenue. After all, sponsor evaluation of potential events heavily relies on understanding the potential value for their business.
"By understanding these key aspects of sponsor needs, you can create a more compelling value proposition for your events."
Richard Morris
We excel at understanding delegate motivations since they are typically members we know well.
However, sponsor offerings can be less clear. While some sponsors may mention benefits like cost reduction, efficiency improvement, or revenue growth, these are just surface-level goals. There's a deeper connection they're seeking with attendees.
Recent surveys show associations struggle to grasp sponsor aspects like sales cycles, average order value, and cost per lead. They might also be unaware of other marketing activities sponsors engage in.
Why is this important? Because it's the key to unlocking the true value your event offers to current and potential sponsors.
Aligning with sponsor goals
By understanding a sponsor's sales cycle or sales process you can see things from their perspective. This allows you to develop or frame event offerings that align with their goals.
Sponsors often seek to connect their marketing activities with their sales process. These goals might include:
Acquiring new contacts within their target industry
Demonstrating a product or service
Showcasing industry expertise
Gathering customer testimonials
Strengthening relationships with existing customers
Marketing managers face the challenge of prioritising which parts of the sales cycle are most important, and how events can supplement or replace other marketing efforts.
Average order value
Understanding a sponsor's average order value – the typical price for their product or service – is crucial.
Do your attendees or members typically buy this product or service? Is it a one-time purchase or does it have a recurring revenue stream?
This information helps you build a picture of what a lead generated at your event is worth to the sponsor, allowing you to set appropriate pricing for booth space and sponsorships.
For example, if a sponsor typically moves 10 potential clients through their sales pipeline who each have a lifetime value of £100,000, then a single lead at your event could be very valuable.
Cost per lead
Ultimately, sponsors need to assess if their event participation yielded a positive return on investment (ROI).
Unlike online promotions that provide rich data, measuring event ROI can be trickier.
Some sponsors may have sophisticated lead-tracking systems, while others rely more on gut feeling. In its simplest form, sponsors might calculate their cost per lead by dividing their total event expenditure by the number of leads collected. This cost per lead is a key metric sponsors use to compare your event to competitors or other forms of marketing, helping them decide where to invest their budget.
To help explain these ideas in a more practical sense, I've included a couple of real-life examples from clients I've worked with.
1. Round table for senior leaders
The sponsor was a customer relationship manager provider looking to engage with senior leaders within higher education.
They bought a 'round table' package for £15,000. It attracted 10 senior leaders, whom they would find it difficult to attract otherwise. After the session, the sponsor was ecstatic, and shared that the audience was worth '£2,000,000 in potential sales value'.
Therefore, the value per lead was £200,000 and the cost per lead was £1,500
2. Webinar for students
The sponsor of this webinar was selling mandatory English language testing packages to students who did not speak English as a first language.
They bought a webinar package for £6,000. It attracted 500 students who matched their target. The test would cost the student £50, therefore the 'potential sales value' was £25,000.
In this example, the value per interaction was £50, and the cost per lead was £12.
By understanding these key aspects of sponsor needs, you can create a more compelling value proposition for your events. This will help you attract and retain sponsors, ensuring a win-win scenario for your association and industry partners.
About the author
With over two decades of experience in the events industry, I've traversed miles of expo aisles, attended countless sessions, and engaged with exhibitors and sponsors to understand their needs. This knowledge has enabled me to troubleshoot and launch successful events by focusing on their commercial foundations.