Our global study shows the increasing importance of service to sponsors.
Why investigate sponsorship service
Between 2018-2021, we conducted the ‘first of its kind’ research¹ to define what constitutes sponsorship service and the role it plays in the commercial relationship between sponsors and rights holders. In this global study with leading sponsors – conducted in collaboration with Loughborough University London – we looked at what happens in the cycle between contract signature and renewal and investigated the factors that drive service quality and sponsor satisfaction. One of the prominent top-level findings is that:
of sponsors consider service a factor in signing or renewing a commercial partnership.
However, over many years of working in sponsorship, we felt that service wasn’t particularly regarded as a key area through which rights holders could create more value and increase their competitive advantage. Value in sponsorship is, in fact, predominantly understood as the value of the rights and their impact, but that doesn’t tell the whole story and this is one of the reasons why we wanted to research this topic in depth.
“If a sponsorship performed well but the service wasn’t at a high enough level, I would seriously consider terminating/not renewing. For me, the two are equally important.”
Manager, Financial Services (ID 357)
The scarcity of useful literature, case studies or managerial frameworks that would help produce any meaningful improvement was also a motivation. But, most importantly, service is where we consistently notice areas of discontent in the relationship between sponsor and rights holder. This is often caused by misunderstandings on what level of service is good enough to carry out the partnership successfully, and can be detrimental to a longstanding relationship.
Sponsors are already evaluating service level
For most industries in which we have provided strategic advice, service is a fundamental part of the offering. In particular, for B2B products and services, where the decision-making process is complex, involves and affects multiple stakeholders and different business areas, not only is evaluating service an important pre-purchase consideration but it is assessed throughout the contract. Sponsorships are no different.
“It is the decider between staying with that partnership or moving on. If the service provided has been below expectations it is unlikely to improve so what is the point in staying?”
Manager, Hospitality & Leisure (ID 281)
We said earlier that our study focused on the post-purchase phase of sponsorship, but it is worth pointing out that, whilst most sponsors consider service as instrumental for renewal, many others are starting to evaluate it at the pre-purchase phase. They know that the level of service they will receive will be a major influencing factor in how they can leverage their investment.
Service tends to become a point of contention between parties when business results are not there, but we see more and more brands making sure that rights holders have the necessary servicing infrastructure as part of their selection process.
“Client service from a rightsholder plays a big role in our renewal decisions, and it is increasingly a component that we want to diligence when we are exploring new partnerships.”
Director, Technology Manufacturer (ID 104)
As sponsorships evolve, service becomes even more critical
of sponsors say that the importance of service will grow or stay the same in the next 5 years.
Our data shows that sponsors already identify service as an important factor in driving satisfaction, but also that its importance will increase. As sponsorships are becoming ever more sophisticated in the way they are used to achieve business objectives, how rights holders support sponsors in leveraging their investment is going to become critical.
The value of service is not only to the benefit of the sponsors. Rights holders should see service as a value generator too because excellent service can be translated into higher retention levels, more opportunities for upselling, but also to increase their appeal and stand out from other competing rights holders in the sales phase.
Being strategic about service starts with an analytical approach
As with any other business area that generates value, sponsorship service is something that should be constantly monitored and researched to find opportunities for improvement and to increase the competitive advantage. However, the typical methods used to gather sponsor feedback are not adequate to produce in-depth and reliable insights that can be acted upon.
Our study shows very clearly that service doesn’t just mean delivering on contractual obligations. It’s a complex area that evolves over time and where expectations vary from sponsor to sponsor.
That’s why we turned to science to address the importance and complexity of sponsorship service and developed Sponsor View. It is a purpose-designed research methodology that allows rights holders to measure and understand their sponsors’ satisfaction drivers and service performance so they can meet and exceed expectations.
¹’What drives service quality in sponsorship’. A global research study conducted between 2018-2021 by Millharbour Marketing and Loughborough University.