How Developing a Pricing Model Can Help You Achieve Your Goals
Sponsorship pricing is the #1 industry challenge. Sponsors are planning for 2021 and it’s a difficult process with unknown variables that will undoubtedly impact the process, but sellers can help simplify the decision-making process by providing sponsors with the tools to fully evaluate the opportunity.
Determining and applying a pricing model may seem like a daunting task when the industry has been hit hard, and you’ve been knocked down, but those who have a pricing model will win the day. There is no short-cut or easy answer to pricing a sponsorship, but we’ve created a simple, transparent model.
A key to sponsorship selling success is an unwavering commitment to following a sales process, and while the landscape of sponsorship has changed, the framework on how to sell sponsorships has not. You can learn more about our sales process here.
One of the most important elements of the sales process is pricing and negotiating your sponsorship. We need to make improvements to how we are pricing sponsorships so properties and events can clearly and confidently present the value.
Why using a pricing model will help you achieve your goals:
- Builds credibility
By applying a real-world pricing approach to determine the fair market value you reduce your fear of underpricing, build price integrity with sponsors, develop a plan to make your budget, and strengthen your negotiating position.
- Provides a consistent framework
There are 6 principle elements to determining the value of a sponsorship: creating an asset inventory, calculating value of marketing assets, completing intangible benefits valuation, assessing the cost of the sale, considering price adjusters, and determining the packaging strategy.
- Helps you appropriately respond
It’s important to have an appropriate response to how the price was determined. Demonstrate that thoughtful consideration was given to your brand position, audience association, level of exclusivity, strong social good or community impact, degree of sponsor clutter and market benchmarks.
I get it. Real world situations don’t always allow for the full process to be undertaken. In cases where a faster approach is needed to determine the price, we recommend taking a “street hustle” approach. I’ll be sharing this approach at an upcoming Sponsorship Masterclass on November 9th, 2020 at 11:00pst. The Masterclass “Using a Street Hustle Pricing Approach to Increase Revenue” will dive in to:
- The 5 key considerations when you need to move quickly
- A 6-step process to pricing and packaging
- Determining your brand value
The full series information and registration can be found here. If you aren’t able to attend the Masterclass, Caravel has a plethora of ways we can help! Schedule a consultation with me today to see how we can take your sponsorship efforts to the next level.
About the author: Paula Beadle is the CEO of Caravel Marketing, a national consulting company specializing in sponsorship marketing, and the founder of Sponsorship Mastery, an annual summit and programming dedicated to improving individual and organizational sponsorship performance. She is a results-driven trailblazer with a proven record of developing smart strategies and creatively connecting the right partners. Paula has helped iconic events and major brands achieve their goals through innovative sponsorship initiatives, generating incremental revenue and successfully coaching thriving teams, executives and boards.