Service is central to sponsorship – it affects performance and trust.
The data gathered in our three-year study on sponsorship service¹ paints a very clear picture. Sponsors are fully aware of the importance that the service received from rights holders has on the success of their sponsorship investment.
In a previous article, ‘The role of service in sponsors’ decision making’, we showed the relevance of sponsorship service.
4 out of 5 sponsors consider service a factor when deciding to renew an existing partnership or to sign a new one.
But we wanted to dig deeper and see what the relative importance of service actually was.
For sponsors the importance of ROI/ROO over service is marginal
We asked sponsors to define the importance that both reaching financial/business objectives and sponsorship service have in regards to their sponsorship programmes and we found that:
There is only a 6% difference between how important ‘ROI/ROO’ and ‘Service’ are to the overall sponsor satisfaction.
It wasn’t surprising to see ROI/ROO scoring very high as a sponsor satisfaction factor, and also scoring higher than service. After all, reaching specific objectives should be the reason for sponsoring in the first place. What we didn’t anticipate were both the absolute importance of the sponsorship service (8.5/10) and its relative value against ROI/ROO (which is only 0.6 higher).
The leverage value of service
The proximity between performance and service can be explained by the existence of a direct relationship between the two. Excellent service, in fact, is a major contributing factor in the achievement of the objectives set for the partnership.
Through service, rights holders provide the necessary support for sponsors not only to access the commercial rights but to leverage them to their highest potential. Sponsors identify service as a broad range of factors occurring in the after-sales phase, including attitudes, behaviours, business process, interpersonal relationships and, importantly, the expertise the rights holder brings to the table to help sponsors be relevant to their audience and effective with their activation.
How the rights are utilised is, in fact, as important as the selection of the property and the quality of the rights themselves.
The risk of service passivity for rights holders
As service influences the quality of activation, a hands-off approach by rights holders could bring the risk of giving up ownership of the sponsorship’s leverage value completely. It means losing their pivotal role in the value generation to only retaining the function of rights providers and policing their permitted use.
The problem is that, when the activation value predominantly resides with sponsors and their third party agencies, the success of the ‘sponsorship product’ is largely out of the rights holders’ hands. Having little or no control over activation performance should raise a big red flag for the security of their revenue because, ultimately, dissatisfied sponsors will cut the sponsorship investment or find alternatives.
Whilst rights holders cannot be solely responsible for the success and the measurement of activation, a proactive approach to service can help them regain influence over the success of their sponsorship offering. By providing a high degree of attentiveness, support, expertise and coordination, they can, in fact, facilitate easier and more effective sponsor activation.
“While results can’t always be controlled, service can. In years and seasons where results aren’t where we would all like them to be, good service can be the difference in deciding to give it another shot, or parting ways.”
Manager, Banking & Capital Markets (ID 701)
Importantly, where business outcomes aren’t clear – and the widespread difficulties with adequately measuring sponsorship impact make this a likely scenario – service could play a fundamental role in preventing non-renewal or early termination. A high degree of collaboration over the achievement and the measurement of the desired business goal can give rights holders more reassurance over the sponsorship performance, allowing them to find effective solutions before the investment is irreparably perceived as unsuccessful.
Bringing sponsorship to life is a mutual commitment based on trust
The importance of service is not only related to the impact potential of sponsorship. If we look at the sponsor-rights holder relationship, there are two main levels at stake. The business relationship between the two organisations, which includes elements of strategic alignment, processes, efficiency, effectiveness and governance, and the interpersonal relationships with the individuals involved in the management of the sponsorship, which involves attitudes and behaviours.
Whilst on the business level excellent service allows better alignment, efficiency and the achievement and measurement of the desired outcomes, on the personal level it helps build a strong rapport necessary to overcome the hurdles that will occur along the way.
“Having been both a rights holder and a sponsor I have experienced the juggle of both positions. Delivering a first class service can, when necessary, overcome many stumbling blocks.”
Manager, Insurance Company, (ID 676)
Excellent service is, ultimately, a commitment to helping the sponsor succeed and this generates one of the most important business currencies. Trust is, in fact, a fundamental element of any lasting relationship between sponsors and rights holders and it needs to be present both at the institutional and interpersonal levels.
“Rights holders should understand that keeping a high satisfaction level will help them build a competitive advantage and will strengthen their relationship with the sponsor.”
Manager, Banking & Capital Markets (ID 611)
Understanding sponsor service quality and satisfaction to protect your sponsorship revenues
Sponsors identify service as a major factor contributing to two critical aspects of the sponsorship relationship, performance and trust. For this reason, and in order to maintain and increase the value they provide, rights holders should make a priority of understanding the sponsor’s expectations of service and how well these are met.
Taking a proactive and analytical approach to this matter becomes essential. It will allow them to understand sponsors at a deeper level and to build strategies for easier and more efficient sponsor management that drive a higher satisfaction level, higher perceived value and, ultimately, higher retention.
If you are interested in finding out how to take a scientific approach to researching and measuring sponsor satisfaction and service quality, we designed the first-of-its-kind service that does that – Sponsor View.
¹’What drives service quality in sponsorship’. A global research study conducted between 2018-2021 by Millharbour Marketing and Loughborough University.