Racing Sponsorship 101...
An Evolving Guide of Sponsorship Tips for Racers
Tip #4: How Much To Ask For & What It Means to Your Partners
We'll start with this... There is NO RIGHT ANSWER because every team is different and the capabilities of every racer to provide effective sponsorship are different. So, let's approach it by asking this question instead:
Whatever dollar amount you decide to ask for, do you understand what that dollar amount you ask for means to the sponsor you're asking for it from!
Ultimately, when you start your sales pitch without knowing what YOUR NUMBER means to that business, you're just a salesman selling a product.
When you start with a number, but no understanding, you are no longer a race team with marketing opportunities. You are no longer a potential partner who might help you new sponsor build their business. You are now just like any other racer or salesperson walking through the door trying to sell the product of the day.
Like we said in our last tip (haven't read it yet? CLICK HERE to catch up), you have a better chance at bigger deals if you are treating your sponsors as PARTNERS, not just customers buying a sponsorship package.
Buying Vs Investing: Partners INVEST!
HERE'S THE MINDSET WE NEED TO CONVEY ON THIS ONE: Ultimately, whatever you ask for from any partner is an amount that they are INVESTING in your race team. If you want them to be happy and potentially continue as a partner, you have to understand how they might be able to achieve a POSITIVE RETURN ON THEIR INVESTMENT. Believe it or not, it's incredibly simple to figure out and we're providing another worksheet that will help you do it.
When you're done with this worksheet, you will be able to make this statement about the partnerships that you propose:
"If I ask __________ for $1,000 in sponsorship, they need to see at least ____ new sales more sales to earn back their investment"
Click Here to download this worksheet
To have a conversation about RETURN ON INVESTMENT with potential partners, you first need the following information:
Average Sale: When the typical customer does business with your potential partner, what's the average total sale when they walk out the door
Average Gross Margin: What percentage of the retail price is profit to the business when they sell it.
Those 2 will get you started, but this one will really take you to another level:
Average Closing Rate: What percentage of customers who walk into the business actually do business with them
Now, what you need to know is that getting this information may feel uncomfortable, but if you don't have it and you can't understand what your partner needs to justify their investment, then you're at a disadvantage to be able to deliver a successful program and end up with a happy partner.
The key to this worksheet is that you have got to make sure that you can understand what any investment in your race team truly means to the partners you are showcasing.
If you're too scared to ask for these figures, that's alright, too... we'll cover that in an upcoming tip, too!
How it all plays together...
As we talked about in Tip #2 (CLICK HERE if you haven't read it), you should have a long list of ways that you can Expose, Communicate, Showcase and Introduce your sponsors all year long. Once you do this worksheet and truly understand THEIR business, then you can really design the right components into their partnership package to make sure you're doing eveyrthing possible to help them meet enough customers to MEET or EXCEED their initial investment and turn their sponsorship of your team into a successful investment in their business!
We're going to leave this one right here and let you spend some time thinking about this as it applies to your race team. Go ahead, dive right into it!
Odds are, you may realize that you may not know any of these 3 pieces of information about any of your sponsors. That's OK... because this is where you have a chance to start taking YOUR SPONSORSHIP SEARCH to 'The Next Level'! For now, we'll leave you with a question for some group feedback.
A QUESTION TO ANSWER...
With over 1,000 racers following these tips, we know that there are some great ideas and experience out there. So go ahead, give us your answer to this question and maybe your experience will help another racer that's just getting started! Just answer the question in the Facebook Comments Box below.
What's the most effective program component you've ever built into a partner's sponsorship program & how did it help grow their business?
By the end of this week, we'll post a couple CASE STUDIES for you to see how this is used as well. So, if you haven't registered for our Sponsorship Tips newsletter yet, there's one more reason!
Remember.... This Sponsorship Tutorial will evolve with another tip every couple of weeks from September of 2014 though February of 2015. If you don't want to miss one, make sure you sign up to receive them all directly via e-mail.
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