Lots of conference organizers want a magic formula for pricing sponsorships.
Sadly, there isn’t one.
To grow this critical revenue line, sponsorship seekers must do the following:
- Earn a high concentration of participants who have influence on deal making or purchases.
- Involve leadership in the relationship building of primary investors or targets.
- Place attendees’ needs and desires above those of the organization or sponsor.
Four Common Sponsorship Pricing Models
Most conference organizers use one or more of these pricing methods:
1. Expense Recovery
These are in-kind or cash investments that you would otherwise be paying out of pocket for.
2. Cost Plus
(Cost to deliver benefits + Cost of Sales + Cost of Servicing) times three. These should never be discounted by more than 30%. To calculate labor, multiply the adjusted net hourly wage by two to cover benefits, taxes, etc.
This pricing strategy is based on intelligence gained from competitive research…what the market will bear.
This is the holy grail of sponsorship pricing. Sponsor seekers usually can only achieve this with a combination of exclusivity and strong alignment with the sponsors target market. Attendee mattering must also be high.
Beyond these four, sponsor seekers get creative with bundling of various properties and assets. Some apply discounts for first year sponsors to get them in the door.
Conference sponsorship programs are not created equal. After analyzing dozens of them, there are seven key attributes that must be present for a thriving program:
- Fewer investors, but bigger investments. Get rid of the micro-sponsorships! They usually have very low attendee value/appreciation. It’s always the highest area of churn and negatively impacts cost of sales.
- Benefits beyond eyeballs and logos. If the sponsorship doesn’t have high attendee mattering (i.e. bag inserts, banners, etc.), replace it with something that does.
- Activation plans that span 90 days plus. The conference dates are the pinnacle. Pre and post conference amplification adds great value and touches more people.
- If the attendee doesn’t win, nobody wins. Never sell your attendees out!
- Good concentration of an elite or elusive attendee segment(s). Show me an underperforming sponsorship program and I guarantee it has an audience problem.
- Leadership participation in sponsorship strategy discussions. Executives need to open doors and match power with power. Big investors expect a seat at the table.
- An account management strategy where you don’t have multiple team members or vendors trying to sell different visibility options. A single relationship owner is strongly preferred by your major investors.
Does your Sponsorship program put your attendees’ needs above those of your sponsors? What are some ways you’re focusing on sponsorship strategy first?
Adapted from Dave’s Forward Thinking column in PCMA’s Convene. Reprinted with permission of Convene, the magazine of the Professional Convention Management Association. ©2015.
Matt Stefan says
Excellent article! I love the line “If the attendee doesn’t win, nobody wins. Never sell your attendees out!”. Personally, this is the biggest barrier to finding ideal sponsors for events. Constructing a relationship with sponsors that can benefit the attendees should be priority #1.