Partnership through sponsorship
A Royal & Sunalliance case study

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Page 2: Reasons for sponsorship

Royal Sunalliance 2 Image 4There are many reasons why corporate sponsorship has grown over recent years. Today’s businesses pursue a range of objectives which reflect the complexity of social relations within a modern society. Big business is not just about making profits, but also has to take into account the interests of the communities it serves. Sponsorship helps organisations to reflect these wider community interests and, as modern sponsorship deals have become increasingly flexible, allow organisations to target sponsorship projects more carefully. This in turn has provided an ever-growing range of benefits for sponsoring companies. These include:

Sponsorship can be used as a form of advertising. One area which attracts sponsorship is sport. Sponsorship on a team rugby strip may be viewed by the crowd watching the game, on television, posters and in the press. When people buy team strips, they are perpetuating this sponsorship process by helping the names of sponsors to be seen in parks and streets. This type of sponsorship is particularly valuable in terms of coverage and frequency and can be much more cost-effective than money spent upon more conventional advertising.

Targeting involves making sure that the right people receive the required message. For example, the targeting achieved through sponsorship can be directed to a group far more efficiently than other forms of advertising. Using the rugby football example again, if a company manufacturing a rugby kit were to sponsor a rugby team then their name/emblem would appear on kits where it would only be seen by those interested in rugby; those not interested would not be watching the game! The profile of the company and its products would therefore be raised amongst the section of the population most likely to purchase the product.

Communicating Corporate Values
Most companies present an image to the public at large. The resulting image may not always be accurate or the image may pre-date the reality as the company moves on. For example, the public perception of accountants may bear little relationship to today’s reality! Sponsorship may therefore be used to convey the values for which the organisation stands and the way it currently conducts its business. Communicating values helps an organisation to influence its perceived image. There are many reasons why organisations might want to do this and these may not always be related to increasing sales. Partners in sponsorship need to be carefully chosen. The image of the sponsor will be impacted by the activities and events related to it and vice versa. For example, though the image of Formula 1 motor racing - fast, dangerous, courageous, thrilling and risk-taking - may be a suitable sponsorship vehicle for many organisations and products, it may not suit organisations who wish to project other values - steady, sure-footed, considered and safe - such as an insurance company. The marriage of a company’s business objectives and the nature of the event requires much consideration. The pursuit of maximum publicity, no matter what the event, is not always the best policy.

Building Business to Business Connections
Companies are often approached to participate in sponsorship by other organisations with whom they deal. In insurance this would include intermediaries, brokers and independent financial advisers (IFAs). In addition to achieving the objectives related to the sponsorship, working with the other organisation to co-ordinate and participate in a sponsored event or activity, strengthens the working relationship for the individuals involved from both organisations and projects a co-ordinated team approach to the public at large.

Corporate hospitality
Corporate hospitality is normally one of the benefits associated with a ‘sponsorship package.’ So, for example, the sponsorship of a concert would confer a number of complimentary tickets for a performance. These are then used by the organisation to entertain clients. The event would be used to recognise and further develop personal relationships between individuals from a number of organisations. For some sponsorships, the opportunity to use certain facilities for corporate hospitality are highly prized, as that venue would not be available through any other channel.

Stakeholder benefits
Sponsorship is now being used more and more to offer benefits to a range of company’s stakeholders. In the case of Royal SunAlliance, these include shareholders, policyholders and staff. Recent sponsorships have included discount price entry tickets for all stakeholder groups at the sponsorship of the Nelson Exhibition and the National Maritime Museum and special staff open days at the National Trust’s Uppark. This has the advantage of associating all the groups with the event and communicating the level and nature of the company’s sponsorship.

Finally, it is useful to mention that many of the benefits of sponsorship are felt within the organisation. Sponsorship helps an organisation to position itself within the marketplace in relation to its competitors. It also helps to reassure and influence staff and may even improve morale, particularly when the organisation they work for becomes involved in some form of community sponsorship.

Royal & Sunalliance | Partnership through sponsorship