Innovation

The Profits and Perils of Sponsorship

Small businesses are vital financial contributors to their communities, but when should you draw the line?

Written by Advisory Board

Welcome to Advisory Board, a weekly department in which a panel of experts—made up of entrepreneurs and professionals—answer questions you have about how to run your business better.

This week, a reader asks:

“The organizing committee for a community event has approached my company seeking a sponsorship. Many local residents attend the event, but I don’t have much of a marketing budget. Is this kind of exposure worth spending money on?”

Here’s what the experts have to say:

“Think about brand awareness and translation to sales. It could very much be worth it if you can directly drive traffic through coupling, a treasure hunt gimmick or capture the awareness moment by getting these potential customers to your point of sale.”

Kelsey Ramsden, business guide and founder, SparkPlay Inc., London, Ont.

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“Make sure your marketing budget reflects your marketing goals, which may include demographics, price, and desired outcomes. If your marketing budget has these principles in place, it makes it easier to decide on which projects to sponsor.

“If you have a limited budget, there are creative ways that you can provide marketing exposure without the high cost of sponsorship. Engage with the organizing committee to come up with alternatives that may still accomplish your exposure goals, for example by providing in-kind prizes rather than full monetary sponsorship.”

Phoebe Fung, proprietor, Vin Room and VR Wine, Calgary

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“Even if your business is not targeting the local market there is are benefits to supporting local events. It helps to foster relationships with your local government and chamber of commerce, links which may become invaluable as you grow.”

— Jennifer Osborne, President, Search Engine People, Pickering, Ont.

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“Will your customers or potential customers be there? Ask the organizing committee to provide you with a demographic profile of their audience and you’ll soon know the answer.

“Also consider whether key influencers like members of the media, bloggers, influential businesses, or potential business partners—people that you’d benefit from a higher profile with—will be in attendance or involved.

“€‹To get the most from an event like this, you’ll want exposure on things like event signage, the event website, social platforms and event marketing materials to really make it pay off. You might even be able to provide a presentation of some sort, depending on the nature of the event.”

—Mark Wardell, president & founder, Wardell International, Vancouver

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Originally appeared on PROFITguide.com