Sponsorship Guru

Erik Gensler: Jim, thank you so much for being here. I’m really excited to speak with you.

Jim Andrews: Happy to be with you, Erik.

Erik Gensler: I know you’re a theater fan and a lover of the arts, which is one of the reasons I wanted to have you on the podcast in addition to your expertise in corporate sponsorship.

Jim Andrews: A longtime lover of the arts from starring as Tom Sawyer in my sixth-grade play to being a long-time board member of About Face Theater here in Chicago, as well as having been able to work through our consulting areas here at the company. Some great arts organizations.

Erik Gensler: How should theaters think about approaching corporate sponsorship?

Jim Andrews: There are a lot of different angles to take when you’re thinking about sponsorship and I think among the most important are to, of course, approach it from a very realistic standpoint. If we look at a lot of theaters and other arts organizations that we’re either familiar with or have worked with here at IEG and ESP properties. typically, the amount of their revenue that’s coming from sponsorships, corporate sponsorships, is pretty small. So, I think that should kind of color the (laughs) the judgment there a little bit. It’s never going to be a major revenue source. I think it’s always going to be a minor one. knowing that just being realistic about this could be a very, very nice revenue stream. It could also be more than just revenue. if you have the right types of partners, they can be great promotional partners and help you in your outreach whether it’s ticket sales or other things that you’re trying to do in the community. Just being (laughs) very, very realistic and recognizing that you have to devote some time and effort into, ah, real corporate partnerships, if we’re going to call them that. you can sell what passes for sponsorship (laughs) and twenty-five hundred dollars, five thousand dollars that are basically not much more than giving somebody some logo recognition. that doesn’t take much. That’s really the low hanging fruit. But recognizing that if we want to talk about, getting, five figure amounts in the door through sponsorship, there is, a kind of commitment of time and effort and resources, that’s going to really require, a dedicated effort. and looking at the opportunity cost of that. (laughs) what could those resources be better deployed in terms of boosting ticket sales or some other, part of the revenue stream?

Erik Gensler: And the challenge, I guess, is that the universe of people that sponsors want to speak to is typically smaller when you’re looking at an arts organization than say a sports team or entertainment property.

Jim Andrews: Absolutely. And I- I think we’ve done a disservice and I’ll take some of the blame (laughs) for that when we’ve been talking about sponsorship as I have for longer than I’d like to admit. we f hold out the examples of well, look at what these large sports and entertainment organizations are doing The NFLs or the AEGs and live nations of the world. we say and if, you, follow that model and just do it on a smaller scale. What we’ve come to realize over time is there model doesn’t work because it is all based on numbers. to approach a corporate sponsor, if you’ve got a subscriber base of two thousand or four thousand, whatever it might be, and try to talk to them about putting that company in front of this audience and reaching this audience. if you’re talking about it from a marketing standpoint, it doesn’t make a lot of sense from where they’re coming from. The approach has to be different. And that it’s not to say that it can’t be done, it just requires taking a different path to get there.

Erik Gensler: Because the impressions just aren’t enough to make an ROI for their marketing investment.

Jim Andrews: For the most part. Yeah. And, you know, again, and everything is scalable and to some degrees if you’re talking to a local business, you’re talking to a bank branch instead of the bank corporate office, they might be willing to give you a small amount of money to reach what is, for them a small audience, but again that’s probably not going to be worth the time and effort required.

Erik Gensler: I think there’s often confusion between sponsorship and corporate giving. Can you explain the difference and why that sometimes is confusing for individuals and how organizations should, should think about those separately or together?

Jim Andrews: maybe it is together because we consider there to be a difference, (laughs) but not everyone does. it gets into a very gray area. the way we define sponsorship when, we started out thirty years ago we tried to make a distinction between, dollars that were coming out of, a marketing budget, a promotional budget, it could be called a lot of different things, but the important aspect to it was that those dollars were meant to serve a business purpose. They had to achieve a business objective. As opposed to, on the other side of the line that we were drawing, the philanthropic dollars. which could be used strategically, of course, but their ultimate goal was not to drive product sales or achieve something tangible that kind of fell to the bottom line. But as you point out, those areas are very, very blurry within companies. You have some companies who talk about strategic philanthropy and what I think is most important is this is part of the reason this takes time and effort to do these things is one of the things you have to do is find out how the company that you’re talking to, approaches this. And where they are most likely to fund a theater or an arts organization because that the answer to that question is going to be different from company to company as you go down the street. so, it takes a little bit of that homework and research to find out what the approach of any given perspective sponsor is. Going back to what we were just discussing in terms of being realistic. If the company, has a sponsorship budget and its very marketing focused. that’s probably not going to be the best point of entry for a smaller organization, local organization, something like that. there you might be looking better off and probably going to end up, in the end with more dollars coming in if you’re talking to those kinds of companies about a donation or a grant. something more philanthropic.

Erik Gensler: So sports teams, as an example, do sponsorship quite well. And, while I’m not much of a sports watcher myself-

Jim Andrews: (laughs)

Erik Gensler: When I do watch sports or go to sporting events, you just see such, such a high volume of corporate integration.

Erik Gensler: Is there anything that the arts can learn from sports?

Jim Andrews: we’ve seen some really interesting things being done in sports sponsorship that volume that you mentioned, is, kind of unique to sports. That they are able to get away with the amount of clutter (laughs) in their arenas some of the sports organizations are trying to pull back from that and take a less is more approach. you start to get some backlash from fans when every moment of, every game is being sponsored or every inch of the arena is covered with signs apart from that and apart from the focus on just that exposure and the signage and the naming rights and all of that. I would ignore those aspects and look a little bit deeper at what’s some of those sports teams and leagues and buildings are doing in terms of really delivering and partnering with their sponsors on content. everybody is interested in in content these days. they’re doing a very good job of exploiting, if I can use that term the relationship that they have with their fans. What the smarter sports organizations and others have really focused on is not just offering a company the opportunity to stand in front of a group of people, our audience, and just kind of show up. but really to take advantage of the fact that we have a deep relationship with them. Can take a number of different factors- you’re tapping into the loyalty and the passion and the interest that people have for their favorite sports team, and hopefully for their (laughs) favorite theater company or whatever else it might be. And getting kind of that rub off effect of, you know, standing shoulder to shoulder and saying, hey, we’re part of this, we’re helping these opportunities to be brought to you, whether that’s, by funding something that’s a particular event that’s happening, but just, being part of something that people love and are passionate about. nowadays, we also know that that relationship extends to really understanding who those, fans are.

Erik Gensler: you mentioned content and I’ve been asked this, and our team here has been asked that before from some of our clients, which is, how can they use their social media to provide exposure to their corporate supporters? Have you seen examples from the arts world or from the entertainment world or from the sports world that are particularly notable and how an organization used their social presence to help their corporate sponsors?

Jim Andrews: we- we’re seeing – as you mentioned with the sports world, a lot of really interesting things being done in in terms of content. usually the channel for getting that out there is social. We did some work last year with a formula one team, auto racing team, based in Europe, the McLaren team. they are not (laughs) not a terribly successful team on the track right now. But they have, a couple of drivers who are very well known and have their own social media following and what the team has done is said to their partners, look, we will partner with you to co-create content using, in some cases the drivers. So, one of those sponsors of the team is Hugo Boss. they have produced really, great little vignettes with these two drivers. wearing Hugo Boss, clothes and going to different places in all of the cities that the formula one circuit visits. they go to some pretty exotic locations around the world. so fans get to experience those cities through the eyes of these drivers and obviously get to see, the outfits (laughs) that they’re wearing, too. But and then they’ll do that for different sponsors in a totally different way. So, they have Shell motor oil as a main sponsor. They’re producing video content that is geared towards the folks who are into cars, the gear heads. So, it’s all about the engines and it’s all about the mechanics and showing what’s going on in the garage before the race. the beautiful thing about digital content and social is, connecting that to the data piece, they can send those out, to the targeted audience. So only the folks who are interested in the lifestyle aspect, of formula one racing, get the Hugo Boss content and the people that are interested in the cars, get the Shell content. There’s obviously an investment on the part of the team, to, help produce some of this content with those sponsors. because the sponsors are willing to make bigger commitments to, to have that content that they can put out on their social channels, which is I think sometimes equally important. and sometimes we forget about that, these brands are looking for something to distribute through their own social, as well as, kind of attaching themselves to the content that’s being put up on the organization’s social media.

Erik Gensler: Can you talk about an example of an innovative or notable corporate sponsorship you’ve seen with an arts organization?

Jim Andrews: Sure, there are a couple that come to mind. one in that’s connected to this digital idea is we worked with the, the Rockettes in Radio City and their sponsorship with Chase has a lot of traditional elements to it. around the venue and the Rockettes themselves. But what I thought was very, very smart move on the part of the Rockettes was to do a lot of research, it’s so important to have them, you know, real deep knowledge of who your audience is. And there are lots of different ways to get that and we can talk more about that, in this case, they did some pretty simple market research just to find out what people’s interests were just beyond knowing that we know you’re buying tickets to our shows and you’re following us on social media, but what is it about the Rockettes that that really drives your interest and what would you like to see and those types of things something very ease that easily bubbled to the surface was that, this audience wanted more information about the individual dancers. And they wanted the behind the scenes stuff. How do they train, how do they how do they get to, that place where, you know, that we see them on the stage? Knowing that, The Rockettes approached Chase, who were already a partner at that point, and said, we would love to develop some, some content for these folks who are, basically asking for it or we’ve (laughs) asked them what they wanted, and they told us. This is it. and Chase said, that sounds great to us. And again, it was something that Chase could have to, to put on, to put on their social channels because most people are not, you know, jumping, at the chance to, to go to the Chase Facebook page or whatever it might be. and they developed some really, really great behind the scenes content. It .. ultimately it led to Chase liking that so much they turned into one of their actual television commercials with, it’s a part of a series with Julianna Margulies as the voice over. and, you know, that ran for quite a while. So, I, you know, I just again, taking, taking that information on the audience and sharing that with the sponsor and saying, what can we do? We- we know this audience wants more of this. Let’s give it to them. There’s kind of a tenant of sponsorship, which is something that everyone should ask. Whether it’s the sponsor or the organization being sponsored is will this sponsor be missed if it were to not be a part of the organization next year? missed by the audience. you know, are we doing things as partners that are enhancing the experience of being, a fan of The Rockettes or a fan of the Brooklyn Nets or whoever the property, the organization being sponsored might be. and I think in that, you know, in that instance that was a really interesting example.

Erik Gensler: I recently received the New York City Ballet’s subscription for next year and they have a partnership with Puma.

Jim Andrews: Yes.

Erik Gensler: Who provided the active wear featured in the season campaign. These gorgeous photos and the dancers are all wearing Puma and there’s, you know, #firstcomessweat, which is connected with the campaign. And I thought that was really smart integration.

Jim Andrews: I’m so glad you mentioned that ’cause I’d almost forgotten about it and I actually talked about it at this year’s, IAG conference in my opening (laughs) remarks and use it as an example. it’s a great partnership and it’s this idea of, just getting creative it’s a drum that we constantly beat here. (laughs) you’ve got, think about things that are not traditional. And I love some of the stuff that Puma, has done with, the New York City Ballet. Last summer they had a bunch of the dancers out on the Plaza at Lincoln Center leading fitness classes. So just like you would, you know, go to at your local gym there they were out on The Plaza, it was the type of thing you would expect, Puma to do with maybe some of their, sports properties and athletes that they endorse. but to say, hey, we can use these incredible (laughs) athletes, I mean, the dancers you can think of as athletes, obviously. Use them the way we would you know, any of our traditional sports partnerships, you know, which they’ve been involved in for, you know, forty, fifty years, I thought was just very, very smart. And again, that also was used for digital content. If you Google that, there’s a YouTube video of, of what that looked like, last summer. So yeah, very, very creative.

Erik Gensler: I believe I met you when I went to an IEG conference, oh, God, more than ten years ago-

Jim Andrews: (laughs)

Erik Gensler: When I worked in sponsorship for arts organizations-

Jim Andrews: Right.

Erik Gensler: And, the conference spent a lot of time or I remember sitting in workshops where we learned how to value sponsorships and I was hoping you can, obviously, without going into all the details, but just sort of broadly sketch out how that works.

Jim Andrews: we talk about all of the (laughs) the fun stuff. The activations and the content and all of these examples that we’ve been talking about. Part of the hard work that goes into building these partnerships certainly is reaching that common ground on what should the sponsor, realistically be expected to pay. We’ve always looked at that then boiling it down and oversimplifying it, you know, two-step process. and the easier part is saying, we can we can list all of the tangible benefits that a sponsor is going to get. So, some of that’s kind of the more basic elements of sponsorship. They’re going to get, you know, this amount of, signage, at the venue. And they’re going to get recognition in the program. And they’re going to get tickets or they’re going to be able to rent our facility for a discounted price. And we put, easily put, relatively easily put dollar values on those things. But then we have, we should if we’re doing (laughs) it correctly and we don’t want to leave money on the table, account for the intangible factors. So, all of those things we were talking about earlier in terms of, and this is where I- I always encourage any organization, for particularly non-profits and arts organizations, not to sell themselves short, because the intangibles are really what sets you apart. You are offering these brands an opportunity to tap into all of the loyalty and the goodwill and the interest and the passion the people have for what you do. It’s about letting them tap into the relationship that you have. You know, that could be, obviously, though, tricky in terms of what is that worth? What is the loyalty of your audience or the passion of your audience worth to these brands? I don’t want to go down into the weeds of, of how do we figure out, you know, kind of a multiplier to put on the tangible benefits that accounts for the intangible, but that’s essentially what our process is. It’s important that that be part of the conversation. It does not have to get into putting a line item down for every benefit being offered. I think it’s more of a general conversation about, you know, let’s talk about the tangible benefits that you’re going to get. And what we think those are worth. you know, x amount but then we also need to at least acknowledge (laughs) here that there are other benefits that are that are not easily quantifiable, but that’s those are going to go into what we feel is kind of the fair market value, for the sponsorship, fee that we’re asking for.

Erik Gensler: What are some of the categories that you’ve seen as good opportunities for arts organizations?

Jim Andrews: I’ll answer that in two ways. I- I will first of all say, tell you the ones that show up when we do our research. and it is overwhelmingly the financial services, industry. And that’s all the different aspects of that. it’s banking, it’s investment service, it’s a credit and credit card companies, it’s also insurance those are the accounting services, as well. after that kind of financial services umbrella you’ve got, airlines. retail, particularly, more be upscale department, types of stores. h, utility, companies you got your electric and, and gas companies and folks like that. So those are kind of the traditional players in the art space. you have an emphasis there on companies that are, fr- in many of those cases, looking at arts sponsorship, maybe with more of a philanthropic lens than a marketing lens. you’ve also got a lot of those companies who are business to business marketers, as well as, in some cases, business to consumer. so that’s an important distinction to make when you’re talking to a bank. you know, why are they interested in your organization? Is this about their retail branches, in the city or this about, some of their private banking and high net worth departments where it’s going to be much more of a kind of behind the scenes, how driven by hospitality and, and talking to a very small number of people rather than kind of mass marketing? those are kind of the usual suspects if you will. there’s an opportunity to kind of break out of that because, we can only go to the well, so often. And there’s obviously a lot of competition, when you’re talking about, you know brands and categories and Bank of America and United Airlines and Chase and American Express and all those types of companies. We’ve been seeing just, not in sponsorship, but just in the brand world over the last few years is really the rise of a lot of direct to consumer types of companies. small companies that didn’t exist a few years ago. just to give an example, in case people don’t know what I’m talking about in the, razor and shaving world. you’ve got, Harry’s and Dollar Shave Club, selling razors, you know, at much lower prices than Gillette, which has obviously been the king of that category for many, many years that’s happening across, lots of different beauty and fashion and other categories where there are a lot of these upstart direct to consumer companies, that are really stealing the market share from some of the bigger players. And I think there’s a real opportunity, with some of those types of companies, because if they are still establishing themselves. They’re still establishing their brands. Some of them have, further down that path, than others. they can use some of those basic benefits of sponsorship. They’re, you know, the ones that are going to be interested in some of that exposure, even if it’s to small audiences, as long as it’s a tailored audience. to say, hey, you may have never heard of us, but here we are and using a whether it’s a theater or some other type of organizations. Kind of get the word out about, you know, the fact that they exist and exactly what they do. Get creative in prospecting for partners. You get out of the rut of going back to, the banks and the airlines and the credit cards and those types of companies.

Erik Gensler: Let’s talk a little bit more about cultivation. You mentioned being thoughtful about the kind of organizations you’re going to go after. So, let’s say you make a list and you find all the companies that are in your city that may be good prospects and so you have a list of forty companies. What do you do next?

Jim Andrews: This goes back to something that we discussed at the very top about, being very realistic and focusing, because to do this the right way and to really, get to the point where you’re talking to, somebody who’s going to make a significant commitment. it’s going to require time and effort. And again, large organizations may have staff to kind of put towards that. I know a lot of the arts organizations (laughs) that I have worked with, you know, don’t have the luxury of full-time people. It’s just something that somebody is doing in addition to a lot of other responsibilities. so, it really might be, it taking that list if you if you built a list of forty and saying, let’s, let’s concentrate on the top five. So, and if you’re going to do that, obviously, you want to make sure that you’re prioritizing, the right five. And really going, deep with those. So, but, you know, and saying, we are now going to spend our time getting to know these five companies, and that means getting to understand exactly what their position in the market place is, what their products and services are, how they go to market and then understanding, you know, who are the players, who do we need to speak with? – I think concentrating your efforts, this doesn’t necessarily happen as linearly as I- I’m making it sound, but to get down to that five part of that process is looking at your audience and saying, who would want to reach these folks? and again, if you have any of the data that will tell you, our audience drives this type of car or banks at this particular institution. those are the kinds of things that are going to help you figure out who should be at the top of that list. And then going to them with really, crafting and again, people in the arts, should be good at this. a story around this solicitation or cultivation. that’s going to put you in a much better place rather than, developing a very lovely brochure or digital piece that talks about the organization. That gives an overview of the audience and, you know, just trying to send that out. to, as many people as possible and hoping somebody bites. We have found is really, you know, not (laughs) not the way to work. You know, I’ve used the equivalent there that, you know, that’s kind of like if you were cultivating individual donors. it’s similar to walking into a very nice restaurant and just going table to table and asking, would you like to, give money to this organization? People are going to look at you and say, you, you know, why are you here? You’re not invited. You don’t even know who I am. And that’s kind of similar to that, scatter shot approach to sending out sponsorship proposals. I would really, really concentrate on who you can identify as being your best prospects.

Erik Gensler: So it’s deep rather than broad. Do your research. Figure out who really the best prospects are. prepare something very tailored and customized. Come to them with benefits and then be open to customizing it further based on their marketing needs.

Jim Andrews: Absolutely. Yeah. No, you said that perfectly. And I think that the other thing, too, is if you can, of course, like with any cultivation, if you if there’s a way to make that first contact with them a warm call rather than a cold call, all the better. So that’s where I think it is about, as part of identifying who those prospects might be. where are their relationships, whether they’re personal relationships that people in the development department might have or board relationships. so, and again, we always encourage the folks that we work with who work for any type of property. Seeking sponsorship to be part of their communities and be part of business organizations so that, it’s again, you’re meeting people who work for these kinds of companies and even in they’re not sponsorship decision makers you know, they are a way that you can get in the door rather than just you know, sending a cold email. Although sometimes that ah, that is what we have to do. If we really think we’ve got (laughs) the right prospect.

Erik Gensler: What is the state of sponsorship in the last few years? Have you seen the sponsorship market grow, stay flat, decrease?

Jim Andrews: If you look at it at the very top line, it’s growing. If you drilled down a little bit, and when I say growing, it’s roughly four or five percent growth a year just in terms of sponsorship spending in North America. but when you drill down, it it’s a case of unfortunately, kind of the rich getting richer. The growth is coming at the top end. The growth is coming from big sports and entertainment, and things are relatively flat when you get into areas such as arts and cultural and trade associations and some of the, other, what we talk about as different sponsorship categories.

Jim Andrews: For arts organizations, it’s, you know, the growth has not been, robust. in in recent years, I think that it’s based on some of the things that we’ve been talking about. The fact that sponsors are f committing more and more dollars to those areas where, the properties that they’re sponsoring are going to be able to deliver some of these newer, more, types of benefits that are really going to deliver a return on the investment. sponsors in general, are taking a much closer look at how they’re spending their money. they’re really trying to assess the impact of these types of dollars. unfortunate because of the resources that a larger organization has. it may be easier for that sports team to do the kind of work that it takes to report back and say we know that because you sponsored this particular event with us that it led to these types of results.

Jim Andrews: But that’s not to say that the smaller organizations can’t do that as well. there are certain things that you can do. to become a good partner and to help sponsors figure out what they’re return on investment is, at the end of the day, it’s their responsibility, but, but there are lots of things that, that any organization who is receiving sponsorship dollars, should be doing in terms of just the basic reporting back about if they were included in, in some social media content, how did that content perform? let’s not assume that the sponsor’s going to go and look for themselves. Let’s make sure that we’re, you know, keeping them up to date on what’s happening with that.

Erik Gensler: So it’s about strategic cultivation. It’s about focus cultivation using research. Crafting custom proposals. And then once someone is on board, making sure you’re nurturing that relationship and continuing to prove value to them, so they come back and renew and stay with you.

Jim Andrews: Absolutely. and because typically with sponsorships, what you want is to have kind of those long-term partners who stay with you. Obviously, that takes, the burden off of having to go out and find new ones every year or every two years. (laughs) that gets to be an expensive proposition if you can renew the ones you have and keep them, keep them happy, then you’re going to be much better off. Both parties will be, will be much better off.

Erik Gensler: we’ve come to your last question and we call this your CI to Eye moment. And the question is if you could broadcast to the executive directors, leadership teams, staff and board of a thousand arts organizations, what advice about sponsorship would you provide to them to help them improve their businesses?

Jim Andrews: I would say, first and foremost, make sure that your relationship with your audiences is as strong as possible. before you embark on, trying to cultivate, some major sponsors, we have often counseled organizations who were just kind of starting down this road. I would rather see an organization spend a year or two building that side of things up and that can be everything from investing in their own marketing so that they, have strong ticket sales… and other aspects of audience engagement. because that is the bedrock of what these sponsors are going to be doing. And beyond that, not just building that audience, but understanding who that audience is investing in, the tools that will allow them to analyze, the data that you have on that audience. to really be able to paint a very specific profile of who that audience is. being able to access and analyze your audience data is almost, leveling the playing field with much larger organizations, such as a sports team. If you can show a prospective sponsor or a current sponsor that, hey, I know exactly who these people are. I know that they are either customers of yours or I know that they, are customers of a competitor of yours. And armed with that knowledge, we can plan some really great and interesting activation activities that will either increase their loyalty to your brand or your company. Or perhaps get them to switch. those are the kinds of things that the marketing folks, the people who are controlling those significant marketing dollars are, really looking to do.

Erik Gensler: Thank you so much Jim. This was really helpful.

Jim Andrews: Good. I hope so. And, yeah, happy to any time talk to you about sponsorship, Erik.

Erik Gensler: (laughs) Thank you.