The Four Reasons Companies Sponsor Your Festival
There’s a reason that sponsorships are so hard for so many of you. The reason it’s hard is because you’re having the wrong conversations with the wrong people.
The Wrong Conversations
The logic typically goes like this: “We are bringing in hundreds, thousands, or hundreds of thousands of people into this town who may have never been before. That’s a great untapped market for local businesses! Who would be interested in reaching those people? Local restaurants, shops, and hoteliers!” And that logic is sound. But sponsors don’t sponsor for logical reasons, and so, you reach the wrong people and have the wrong conversation with them.
Here are the pitfalls of that logic.
Restauranteurs, small downtown shops, and hoteliers have very small profit margins.
These small businesses can’t afford to spend money on anything that’s not a sure thing. They sometimes can’t even afford to spend money on something that is a sure thing. So, general marketing and brand awareness fall to the bottom of their priority pile. Not only that, they constantly demand lower prices, artificially driving down your sponsorship costs. It’s a lose-lose situation for you both.Your unique value proposition is not that you’re a great advertising vehicle.
This is a hard pill for most people to swallow. But you have to repeat this to yourself. Your festival is not an advertising vehicle. Even though there is a ridiculous number of people in town, people with money to spend, they are not going to pick a restaurant based on seeing that restaurant's name or logo in a pile of 30 others on a banner they might pass while going into the festival. It’s a bad marketing investment (I say this as someone who’s been in sales and marketing for over 15 years).Google exists
When a guest wants to find a good place to eat because they’re in your town and are just famished after a day of celebrating and revelry, they will not go looking for your sponsor banner to see which restaurant sponsored the event and hope the food is good. They’re going to pull their phone out of their pocket and search for the highest-rated restaurant within a reasonable radius. You can’t compete with Google as an advertising vehicle.
That’s some doom and gloom, I know. But there’s good news. There are four reasons sponsors will sponsor your festival that have nothing to do with your marketing prowess. And when you start having these conversations with the right people, the number of sponsors will skyrocket and you will be able to ask for more money with each sponsorship.
**DISCLAIMER: You still need to do all the things you currently do for sponsors, like placing them on the banner, mentioning them on social media, and making sure they’re displayed on your website. You still need to treat sponsors with the same marketing benefits you currently do. It’s a little like a gym in a hotel. Everyone needs to know it’s there, but no one is actually going to use it.
If it’s not for marketing value, what are the real reasons local companies will sponsor your festival? Start by thinking about your real value proposition. You’re not an advertising vehicle, you’re an economic development vehicle. You bring a crowd to town so they will spend money in the town. That money leads to job creation, shop owners paying their bills to other local companies, and all that money getting circulated in the community. Understanding this changes your perspective on what value you bring to the community and what value you can offer to sponsors.
After recognizing your real value in the community, recognize how sponsors make decisions. We, as humans, like to think we’re very logical in the way we make decisions. We’re not. We make decisions emotionally first and then justify them with logic later. It’s just how we’re wired. The four main reasons organizations sponsor local festivals are emotionally based.
Here are the four, real reasons organizations will sponsor your festival:
They align with and support your mission.
They want to support the local community.
They want recognition in the community.
They know, like, and trust you.
Ultimately, the sponsorship conversation is a sales conversation, and these are the four pillars of the value you bring to the conversation.
I mentioned earlier how you're having the wrong conversations with the wrong people. I’ve told you what the right conversations are, but not the right people. Stop talking to marketing people. Talk to business owners, entrepreneurs. These are the people who invest in your festival for reasons beyond marketing ROI.
Let’s dive further into the four reasons local businesses will support your festival.
Sponsors Sponsor Because They Align With and Support Your Mission
About half of your sponsors will be looking to see if your festival’s mission and core values line up with theirs. This doesn’t need to be a 1-to-1 match, their core values may include “giving back,” or “supporting the local community.” If so, your festival is a great way for them to give back in a way they and their employees can really see. It’s a way they can feel like they have a major impact on their community by being a part of an economic driver that supports so many small businesses in the community.
Sponsors Sponsor Because They Want to Support the Local Community
Many of the people who have built businesses in your area have only been able to do so with the help and support of other businesses and community members. If it wasn’t for the small businesses buying from them, they would have nothing. There’s a small town near me that has a population of less than 2,000 people. In that town is a wealthy businessman who owns a large plot of land. Every year, he spends his own money to put on a fireworks show that rivals any city nearby and even puts them to shame. He does it because he recognizes what his community has given to him and this is his way of giving back. Businesses and their owners long to give back, they just need to know how and why.
Sponsors Sponsor Because They Want Recognition
This one is a little less benevolent than the others, but it doesn’t make it any less true. Sometimes business owners want to be seen as magnanimous or generous. Sometimes, they just want to be seen, regardless of what impression they give. Regardless of why, many people will support your festival if it makes them look good in front of their peers. Find ways to make sure your sponsors have special access and recognition in creative ways.
Sponsors Sponsor Because of Their Relationship With You
The last, and most important reason organizations will sponsor your festival is simply because they know you, not the festival, but you as an individual, and they like you. Find creative ways to connect with your prospective sponsors without making an ask. Spend time getting to know them, understand them, and talk to them about things that interest them, like their families or hobbies. Then, when you’ve built a trusting relationship, simply make the ask. They’ll either give you an honest “no” with an explanation, or they’ll give you more than you thought they would.
The Wrong People
By now, you know you shouldn’t be talking with the marketing department about the amazing advertising opportunities they’re missing out on and you should, instead, be talking to the business owners themselves. But I also told you you shouldn’t be going after restaurants, hotels, and small shops. So what type of businesses should you be looking at?
This will seem counterintuitive (like the rest of this post), but let me break it down for you. About ⅓ of sponsors are B2C (business-to-consumer) companies, about ⅓ are B2B (business-to-business) companies, and about ⅓ serve both consumers and businesses. Let’s drill down a little more.
Manufacturers/Construction
About ⅕ of sponsors of a healthy festival are manufacturers and construction companies. These companies have no perceivable advantage for advertising to visitors, let alone a bunch of people who likely aren’t their customers. They sponsor because it makes them look good in the community, and makes them look like a good place to work. Don’t be afraid to approach organizations that seem unrelated. You might be surprised.
Banks and Financial Institutions
Chances are you already have a bank or two on your roster of sponsors. This is because banks are keenly aware of the value of reputation in the community. They aren’t advertising to the guests, they’re signaling to the locals about what great community investors they are. Expand on this by going after more banks and even investment groups and financial institutions.
Commercial/Professional Services
This sector is surprisingly overrepresented in the sponsorship pie. This is a sector that is signaling to other local businesses that they give back to the community and are trying to earn business from other local businesses. They also want opportunities to meet your other sponsors. The more you can provide those opportunities, the more sponsors from this sector you’ll have.
If you’re struggling with sponsorship and you’ve found it’s because you’re having the wrong conversations with the wrong people, try this approach instead. Try having conversations with unexpected partners and focus on shared values, community support, connecting with peers, and building relationships. You’ll be able to earn more sponsors and ask for higher rates.
