I had a call yesterday from a sports agent offering me his star client for 10-15 cents on the dollar. Ugh.

Today I am conducting a pricing tutorial for a not-for-profit client’s provincial offices. The same question is asked over and over…is there a fail-proof way to validate their pricing to sponsors?

Tomorrow I am meeting with a new corporate client about how to optimize their sponsorship portfolio. What investments should they continue and where should they exit?

Pricing is always important. The issue is exasperated by the current climate.

To prepare for these conversations I have been trying to update my data on the topic. Have to say, what’s out there is pretty slim.

Vague references to brand prestige…old fashioned equations about cents per banner…misguided belief about the value of a logo appearing on screen.

Yikes! Is this the best we have?

So I have a request. Share your best practices. Who has some great information? Lay down your competitive swords.

So this is less of a blog and more of a plea. Lead me down the path of the best pricing related information/articles/studies that you have read. I’ll play it forward to our entire database.

And we’ll all live to see a more profitable day!

Norm will spend next year as Visiting Scholar at Stanford University’s Graduate School of Business. Working with Professor George Foster, arguably the top sport management scholar in the world.

Following his time at Stanford, Norm will become an associate professor at Syracuse University. Famed as a top research school and Division I NCAA sports powerhouse, Syracuse is home to the Falk Sport Management Centre, an emerging think tank in sport management. The center is named for David Falk, best known as one of the first super-agents, who counted Michael Jordan among his clients. Falk is also a major benefactor of Syracuse U.

Norm will stay on as Associate Director of ISM continuing to contribute to the Canadian Sponsorship Landscape Study and remaining a senior advisor to TrojanOne.

Dr. Pegoraro has been ISM’s Associate Director since 2007 and succeeds Norm O’Reilly, who will remain as an Associate Director to ensure continuity for all projects and future initiatives.

Dr. Pegoraro brings a wealth of experience to her new position, and looks forward to continuing the work started by her predecessor, adding “The recent strides taken by ISM under the leadership of Dr. O’Reilly have resulted in valuable new partnerships and research opportunities and I look forward to continuing to develop these relationships and build new ones to foster the continued growth of the ISM.”

The question comes in many forms. What’s going on out there? Is anybody spending money? How are things? What impact have you felt?

Over and over, we hear the question.

I spent a lot of time dealing with this train of dialogue a few months ago. Dealing with the economy, how to face the recession, banding together as an industry. Being the eternal optimist I am, I had hoped that by now this whole schmozel would have evaporated as quickly as it appeared.

Guess I was wrong.

While the troubled times haven’t disappeared entirely, they are also not nearly as deep as many panicked minds anticipated. Still, organization after organization is facing unprecedented challenges. In the past two weeks I have made presentations at major conferences, held fireside chats with some of the leading charities in Canada, attended a CEO-level cultivation event for a national sports property, and heard frontline feedback from development managers and agency staff. There seems to be some common themes.

Budget cutbacks have been less prevalent than expected, but are still very significant. More significant has been the anticipated, yet dramatic, shift of funds into sales generating tactics. As one marketer said to me this week, “Our couponing program is doing really well.”

Certain types of media seem to be getting pounded every day. The last time you reached for your favourite magazine, did you notice its weight? Has it been Jenny Craiged in a big way, by the withdrawal of advertisers? Has this money been sucked out of the market or redirected?

Budget freezes seem to be more and more common. Clients are claiming they have the money, but they just aren’t allowed to spend it. Okay, I’m not the brightest bald guy in the room…but what the hell is the difference? Well I guess there is one, because as one agency President told me this week… the number of unbelievably late project approvals he has been receiving is mind-boggling. Clients are sitting on the fence, waiting for some mysterious crash to come. Realizing it’s not coming, and that their competitors are stealing their lunch, they are racing back into marketing mode, with zero lead time but with the same expectations as before.

What are the implications for sponsorship properties, sales agents, and agencies? (And quite frankly, clients who perform a sponsorship role). I would suggest they will be dramatic.

Dollars are out there, but they are scarcer. Those dollars that do exist are being concealed until the last possible moment. And when they are ready to be spent, everybody expects a deal…a big big deal.

So what do you do? Well for one, get out of the sponsorship game. Yes, you heard me correctly. Do not adjust your sets, your satellite dish is working just fine. Get out of the sponsorship game.

It’s time for some game changing strategies. One of the biggest is to abandon a dying industry and head for a new one. Which one?

Well I think we can keep the name sponsorship, despite my comments of a few sentences ago. But I think we need to start thinking about the Business of Sponsorship, as opposed to Corporate Sponsorship.

The Business of Sponsorship provides a lens to examine your activities  from a new perspective. It encourages you to stop thinking of your property as an event or a cause, and to consider it a business. As a business your property could be much more than an awareness builder or an experience deliverer. It could become a distribution channel, an employee trainer, a customer, a reseller, a promotional outlet, a media outlet, a recruiter, a consultant, or a solution provider.

Yet it will take a whole new approach to business. It will require you to drop the clichés like “fewer things better”. What a dumb statement. If you’re incompetent you can do a few things. But you’ll do them poorly. In fact, they will be just as bad, as if you did many things. If you’re talented you can do tons of things well. As a business, you’re going to need to do a lot more things. And you are going to need to do them well. Expand your horizon.

Similarly you can shelve the old adage about it being easier to do three big dollar deals than thirty small dollar deals. Not anymore folks! If you want sales growth you’re going to need to be able to retrofit your property to make it work. The big deals are harder to find, harder to close, and harder to service. The small deals will be focused on a few deliverables, easier to secure, and easier to service. Plus, the loss of one or two small deals will have far less negative impact than a biggie.

So develop new products and opportunities for the new reality. Develop products you can mass market and you mass harvest. Develop products that can be pitched, sold, and serviced all in the same day.

Exclusivity is mandatory. Not anymore people! Refer back to my comment that everybody wants a deal. That’s fine, give them a deal. But don’t give them the farm. In this market you need a wide base of customers. Some will be from the same category. Sure exclusivity made sense when you wanted a Corporate Sponsor (nee donor). But now you are engaging in the Business of Sponsorship. Your business has products to sell. So sell!  Don’t spend time worrying about exclusivity for small customers. Spend time worrying about how many customers you can sell your new products to.

Here is a simple example of what I mean. One property I know has tens of thousands of participants, and only a dozen or so sponsors. That means there are 488 companies in the FP500 they don’t do business with. Can they sell those others a sampling package, couponing program, contesting opportunity? The property has the critical mass. They have a targeted audience. They have products waiting to be exploited!

It’s time to stop selling branding and emotion. It’s time to start selling customer penetration and revenue generation.

If you think about it, that is almost twice the size of the Canadian sponsorship industry, according to research we sponsor through the Institute for Sports Marketing.

The rationale for the size, scope, and importance of this sector was aptly summarized by one of the event’s PRESTIGE award winners.
(For details, visit http://www.canadiansporttourism.com).

President of Trade Center Ltd. in Halifax, Scott Ferguson, collected the hardware for Sport Event of the Year, awarded for their staging of the 2008 IIHF World Hockey Championships.

Ferguson’s acceptance speech zeroed in on the future of the Canadian sport tourism industry. To be successful, he stated, the industry must focus on the business they are truly in. That business isn’t so much “sports tourism”, as it is economic development. He cited the tens of millions of dollars that Events Halifax spins off on an annual basis. And he is right on!

For many of the 300 stakeholders, attracting and running great events is their daily focus. However, their true mission should be about contributing to the economic growth of their communities. Certainly hosting great events will bring return visits and new events. Yet maximizing the impact of that event on the host community’ economy will attract more funding from government and private sectors.

Ferguson also implored the delegates to constantly remind all levels of government that they are in the business of “Economic Development”, to ensure that this crucially important, publicly funded, support is continued.

I think it’s important that all sectors of the sports marketing industry do their part as well. Without this government support, corporations won’t have audiences to market to, coaches won’t have events to prepare their athletes for, broadcasters won’t have content to cover, agencies won’t have venues for activations, and horror of horrors – thunder-stick makers will go bankrupt!