Sponsorship costs can be hundreds to thousands of dollars. Companies expect to recover the money they spent. Eventalways states that brands expect to get a return of two to one, three to one, or sometimes four to one on their sponsorship investment. They would rather invest their money elsewhere if they are unable to achieve those returns.
It is your responsibility as the event host or planner to meet their expectations and keep your word. They will not sponsor your next event if they don’t see the return.
It’s not easy. A 2017 survey found that 40% of event sponsorship professionals said measuring and evaluating the sponsor ROI was one of their top challenges.
Sometimes, it is easy to measure ROI. Sponsors who pay to sell at your event can easily compare the sales to the booth cost. It is easy to get feedback.
However, in some cases the relationship between sponsorship packages’ cost and their value may be less clear. To help sponsors understand the return on their investment, you will need to go further.
You can also control the conversation by helping sponsors to understand the return on their investment. It is possible to ensure that they are able to see all the details so they can understand the true value of the sponsorship package. This gives you an opportunity to easily sell them the next package. You can say, “Remember how much we made you $X last years?”
How do you calculate the ROI of sponsorship packages? These four steps will help you determine the ROI of each sponsor’s investment so that they are satisfied.
Step 1: Collect lots of data
Collect as much data possible to determine the ROI of your event sponsors. It will be necessary to calculate the event’s success. Sponsors may request all data collected in certain cases. It’s best to prepare an event report with the final numbers at the end.
It is important to gather multiple data points related to the same subject. “Attendance” is an example of a vague metric. Is it inclusive of all registered participants? Or is it limited to those who attended? Last-minute registrations and tickets bought at the door are not included. How many people were granted free admission? Is it staff? This will give you a breakdown of everything.
It is crucial that you don’t make your event appear more lucrative for sponsors than it actually was. You might feel tempted to give your entire email list as “leads” to an exhibitor, even though they didn’t submit any contact information at the event. If the sponsor discovers that you were not honest, they will discontinue sponsoring you in the future.
Step 2: Get to know your sponsors’ goals
Sponsors don’t want to be just able to place their logo in your event space. Sponsors want to make meaningful connections with your attendees. They want people to taste their food, see their exhibits, and touch their products.
Some brands may be content to “create brand awareness,” but most want something more tangible. They might want to have a list of leads that they can contact in the future. They may also expect to sell at your event.
When you are negotiating deals with sponsors early in the event planning process, it is important to ask probing questions that will help you understand their (the sponsor’s) expectations for a successful event sponsorship.
These goals should be understood well in advance of your event. During negotiations, ask sponsors to provide this information. This information will allow you to plan sponsorships that are measured by the correct metrics. This will help you price sponsorships so that they achieve the desired ROI.
Let’s suppose Acme Inc. is interested in sponsoring your event. They want to get email addresses from people interested in buying their product. To secure enough sales, they need 500 email addresses. Posting a sign with the offer and logo won’t work in this instance. It is likely that you will need someone to show their product and encourage people to send their email.
Are you and the sponsor more involved in a sponsorship like this? Yes, it is more work but it’s much more effective. Acme Inc. will sponsor your next event if you get 500 emails.
Step 3: Determine the value of each metric
Now that you have a good idea of what sponsors want from your event, the next step is to convert those goals into dollars. This will allow them to relate the results of their sponsorship package to their investment, and ultimately help determine their ROI.
Your sponsor may be able to help you with this step. It’s impossible to determine how valuable a sponsor considers a lead. They may not know how much they receive from a conversation or from a sale. To get exact figures, you’ll need to consult the sponsor.
Step 4: Prepare a Fulfillment Report
The last step is to create a short, easy-to-read fulfillment report that you can give to your sponsors following the event. The report should be quite standard. However, you can customize it to suit the needs of each sponsor.
Fulfillment reports serve two purposes. It serves two purposes. First, it proves that you have kept your promises. Your report will include final numbers if you had promised 500 people to visit the sponsor’s exhibit. The report should provide evidence to support that claim. You might see something like “We used an electronic counter to track exposure.”
This is important as it shows what you actually delivered. You should tell your sponsor if you promise 500 eyeballs but only reach 750 people. Sponsorships that are successful can have a significant impact on ROI.
The fulfillment report is the last calculation to show the sponsorship’s ROI. For example, if you and your sponsor decide that each email lead equals $3 in value, then you will show the total value of email leads. To calculate total ROI, add all the value they get and subtract the cost for the sponsorship package.
The fulfillment report allows sponsors to easily see if they have benefited from the sponsorship opportunity. This report will be used by your sponsors to determine if they are interested in sponsoring your next event. Make sure it is accurate, complete, and understandable.
It’s worth the effort to measure ROI
All that may sound like a lot of work. It takes more work than most event planners to calculate the return on investment for each sponsor. This type of reporting and tracking is crucial to distinguish your event from other events that sell logo placement. Your sponsors will be more likely to sponsor your next event if you show them how much they have made.