MKTG Insights: Give Your Sponsorship Strategy a Culture Shock
Sponsorship has evolved to becomea vital element in the marketing mix of Tier-1 brands. IEG projects spending by North American brands to exceed $20 billion by end-of-year 2014. However, the overwhelmingly majority of those $20 billion will be spent with a common objective: to help build external, consumer-facing brand campaigns and communicate brand values to a public audience.
This consumer orientation is not misguided; brands exist to serve their customers and must invest to do so in today's cluttered marketing landscape. Often lost however, in the external focus of sponsorship marketing is a crucial but overlooked element: organizational culture.
Management expert Peter Drucker famously stated that "culture eats strategy for breakfast". A strong culture can represent the tipping point between theoretical strategy, and a strategy that is successfully implemented within a company. Sponsorship contributes to culture in a variety of important ways:
1. Represents a tangible commitment to support causes that matter to communities;
2. Translates cultural values from something in a HR manual into an organizational spirit - effectively walking the talk;
3. Gives consumers / employees a chance to interact with their brand outside the office while enjoying a shared passion;
4. Offers companies the greatest opportunity to meaningfully engage employees.
Employees are the engine of any culture, and according to Synergy, a UK-based sponsorship consultancy, 40% of sponsors in England do not leverage sponsorship as a mechanism to improve employee performance within an organization. While many companies in North America have begun to embrace the power of brands to reach their internal audience, the notion of leveraging sponsorship to move the needle on corporate culture is often overlooked.
Employees are internal customers. Just as consumers are not born with an affinity for certain brands, employees or job-seekers do not automatically adopt the vision of their employer or potential employer. They must be conditioned to do so through strategic messaging. Hewitt reports that each disengaged employee will cost a company $10,000 in profit annually. Sponsorship can effectively be leveraged to evoke pride in the company amongst employees, incentivize the workforce through ¨can't buy experiences¨, influence the decisions of top talent, or authenticate organizational values through the values embodied by the sponsored property.
Brands who can connect the dots between external marketing communications and organizational culture will be able to unlock the hidden ingredient of sponsorship.
Keys to Success:
Engage key stakeholders in the decision process: Brands preparing to make an investment in sponsorship should take the opportunity to involve key influencers in the organization early on in the initial strategy build. Rather than having the personal passions of a select few in senior management positions manifest in property selection of an overall sponsorship strategy, brands must take the time to gain an accurate depiction of where their employees feel their employer should be investing. From educating employees on the value of sponsorship, to gaining an understanding of the competitive sponsorship programs that employees have the strongest emotional connection with, the stakeholder engagement process is critical to success.
Go beyond hospitality: Brands who approach employee engagement solely through a lens of hospitality are not optimizing their sponsorship strategy. True engagement is not about tickets or even VIP experiences. Brands should seek out volunteerism / engagement opportunities at the community level that inspire employees.
Leverage sponsorship during moments of structural change: Most M&A deal failures are linked to "people and organization issues such as lack of shared vision, leadership clash, cultural mismatch, loss of key talent, misaligned structures, lack of management commitment, lack of employee motivation, poor communication and poor change management." Companies that are undergoing major restructuring, such as a major merger or acquisition, can lean on sponsorship to form a post-merger identity and build a strong narrative throughout the company.
What does not get measured, does not get done: While the sponsorship industry often debates rules of thumb for spending ratios on rights fees vs. activation activity, brands who recognize of the power of sponsorship to unite and inspire their human capital will begin to evolve their measurement efforts to reflect this. As the internal element to brand sponsorships becomes increasingly recognized asa strategic priority, sponsors should further analyze activation spend by comparing "external activation spend" versus "internal activation spend" to ensure that sponsorships are delivering optimal business impact. Further, sponsors - in addition to measuring traditional consumer-facing KPI's - should be investing in the measurement of sponsorship's impact on their workforce (ie: employee engagement metrics pre- and post- sponsorship, customer service performance, etc.).
Perhaps there is no better example of leveraging sponsorship assets to engage employees and build culture than Aon, the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. The notion of human capital is core to Aon - not just as an organization that employs over 60,000 people worldwide - but as an organization who has built their brand on powering people, whether it be through employee benefits consulting, recruiting, or workforce analytics. Aon was a long time sponsor of Manchester United and had logo placement on Man U`s official jersey kit. Manchester United is one of the most popular soccer clubs in the world and jersey kit sponsorship is an asset capable of generating unmatched exposure.
The organization placed a large emphasis on the brand-building (external) applications of sponsorship. However, as a B2B organization, Aon recognized the need to revamp their approach. Brand-building assets would offer them access to more eyeballs, but wasn't resulting in optimal business impact. Aon transformed their relationship with Man U in 2013. Focusing less on consumer-facing assets, Aon instead focused on revenue opportunities through providing in-kind consulting services to Man U (retirement consulting for ex players, data analytics consulting to team scouts, and risk management consulting), and employee engagement opportunities.
Aon brings the Man U experience to employees around the world through experience days and through access to unique experiences. Further, they leverage the Man U sponsorship heavily in recruiting material by equating values of the soccer club - talent, tradition, excellence, and training - as foundational values of Aon. Aon recognized that they needed a sponsorship strategy that took a more holistic view towards value creation, and that brand metrics were not the silver bullet of sponsorship. Finally, as a global organization, Aon needs a truly global property to unite the organization; they have that in Manchester Untied.
What to Watch For:
As the industry continues to progress, sponsors and properties alike should watch for the following trends:
- A formalized approach to stakeholder engagement prior to strategy development
- Leveraging property ambassadors in training opportunities (ie: athlete led motivational speaker series, sales training, co-branded curriculums, etc.)
- More functional overlap between the role of marketing and HR professionals
Sponsorship is about standing for something as an organization; a set of values that transcends stock price or revenue forecasts. Brands who recognize that they must inspire and engage their employees - so that they can in, in turn - inspire and engage a loyal base of customers, will set the new gold standard in sponsorship marketing.