Should Sponsorships be Part of Your Marketing Plan? Reviewed by Momizat on . How do Sponsorships Rank as a Strategy for Business Development? How effective are sponsorships developing business leads? Sponsorships provide visibility to a How do Sponsorships Rank as a Strategy for Business Development? How effective are sponsorships developing business leads? Sponsorships provide visibility to a Rating: 0
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Should Sponsorships be Part of Your Marketing Plan?

How do Sponsorships Rank as a Strategy for Business Development?

How effective are sponsorships developing business leads? Sponsorships provide visibility to a captive audience and ideally convey the firm’s commitment to the cause or event. In this article, Dr. Frederiksen shares his findings on this subject, as well as discusses findings involving the pay to play sponsorships and the community sponsorship models.

sponsorshipFor professional services firms, one of the most widely used marketing practices is event sponsorship.

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It is easy to understand why.  After all, sponsorships are so easy: you just write a check and boom, you’re done.  People will see your logo on materials or signage for that particular event, and by sponsoring other events over time, you will start to build mindshare.  Eventually (the theory goes), your name starts coming up on the short list when a potential client is looking for a new accounting or financial services provider.  Sponsorships are easy and help you get noticed, so what’s not to love?

The short answer is that paying for sponsorships may work, but only to a limited degree.  To see why, let’s look at the data collected in two recent studies.  The findings make it clear that although many accounting and financial services firms invest in sponsorships as a key marketing activity, the strategy does not really work very well.

Understanding Sponsorships

Let’s start by looking at how most firms invest in sponsorships.  According to a joint study of marketing priorities at accounting and financial services firms that Hinge Research Institute conducted with the Association for Accounting Marketing in 2015, after the cost of marketing staff salaries, the biggest marketing expense was the category of sponsorships.

But what is more interesting is when you compare the priorities of High-Growth firms (the fastest growing 20%, which averaged 24% annual organic growth) with those of Low-Growth firms (the slowest growing 20%, which shrunk by an average 1.65%).

Our study found that although High-Growth firms spend a little bit more on marketing as a percentage of revenue than small firms (3.2% vs. 2.6%), they spend their marketing dollars differently.  In particular, High-Growth firms spend much less on sponsorships than their Low-Growth counterparts—while spending more on websites and search engine optimization, among other efforts.

So if you believe in the strategy of following best practices, this data suggests that prioritizing sponsorships in your marketing plan places you at a disadvantage.  Doing so would make your marketing plan more like that of slower-growing firms.

Do Sponsorships Drive Referrals?

So now consider the results of another study—one that focused not on sponsorships per se, but on which factors were most important in helping firms grow by generating referrals.

Sponsorship2Even more interesting, when a firm has established its Visible Expertise, referrals need not be only from current and past clients.  In fact, referrals can also come from people who have simply heard about your reputation and expertise in the market.When we asked High-Growth firms to identify the main drivers of referrals, we found that sponsorships ranked extremely low—less than 1%.  In contrast, 37% of these firms said that Visible Expertise was the key driver.  Activities that create Visible Expertise include: publishing educational content, speaking at conferences, and showcasing successful projects.

When you gauge the value of a sponsorship through this lens, the problem is obvious.  Typically, what you get from a sponsorship (in exchange for a sometimes hefty fee) is the appearance of your firm’s name or logo on the event’s marketing materials, signage and website, and a brief mention during the introductory remarks.

The problem is that in none of these payoffs is the expertise of your firm the focus; rather, it is simply your name or logo.  Therefore, there is no compelling reason for a company to make a referral based on that sponsorship.  They still know next to nothing about you, and they are unlikely to risk their credibility in referring you based solely on the fact they saw your logo or heard your name.

So are Sponsorships Ever a Good Investment?

Based on our research, there are two primary instances where paying for sponsorships does make sense from a marketing perspective:

  • Pay to play sponsorships. In some cases, a conference or trade show will require any company wanting to speak at the event pay to be a sponsor.  This means that in addition to getting your logo in all the usual places, you also have an opportunity (if the audience is right) to make a compelling presentation about a topic that is important to your decision-makers, influencers, and other sources of referrals.  In your presentation, you can demonstrate your expertise to a highly strategic audience.
  • To show you are part of a community. Another example of when paying for a sponsorship may make sense is when it is part of a broader effort to demonstrate that you are part of a particular community.  For example, if you have a strategic goal of building your presence in the construction industry, sponsoring an event attended by CEOs of construction companies could make sense, especially if it is supported by parallel efforts at reaching them through various other marketing channels.

There may be other situations where a sponsorship may make a certain amount of business sense.  Consider the example of a marketing firm whose VP for sales is approached by a client who tells her that if her firm wants to remain a client, they need to be an event sponsor.  It might make business sense for the firm to pay for such a sponsorship…but I urge you not to consider this a marketing expense.  In fact, its real impact is to discount your services.

Where to Go From Here

The big takeaway is that not all efforts to be visible in the marketplace are created equal.

Sponsorships may provide a tangible and relatively easy way to get your firm’s name and logo in front of potential clients.  But, the impact of that visibility on generating quality leads pales in comparison to demonstrating your Visible Expertise to decision makers.  Doing the latter requires a more sustained effort across a variety of channels, including your own website, content marketing, and social media.  On the other hand, its impact on growing your business is also far greater than creating mere name recognition.

Lee W. Frederiksen, PhD, is Managing Partner at Hinge, the leading branding and marketing firm for the professional services. Hinge conducts groundbreaking research into high-growth firms and offers a complete suite of services for firms that want to become more visible and grow.
Mr. Frederiksen can be contacted at (703) 391-8870 or by e-mail to

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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