Sponsorships: Hidden Gems of Incremental Revenue
Maximizing revenue for associations is more than just searching for additional membership dues. Within each association, there are multiple opportunities for additional revenue streams. Incremental revenue is created by adding value to existing products or services to increase exposure for your customers to gain non-dues revenue (NDR). NDR is one of the most easily forgotten methods of increasing total revenue.
Optimizing sponsorship packages is one such source of additional revenue. By leveraging association assets, the packages that are sold to organizations trying to reach your audience can be increased.
Types of Sponsorship Packages
Sponsorship packages can exist in many forms. A few examples for NDR are shown below.
- Allow sponsors to access members at a conference
- Display sponsor advertising inside an association newsletter
- Display sponsorship materials at a networking event
- Invite a sponsor to co-host a webinar
- Display sponsorship messages on the association website
- Post sponsorship messages to association social media sites
Sponsorship opportunities can be attached to virtually every interaction an association has with its members. By offering sponsorship packages, additional revenue streams are realistically achievable. It is vital to remember that something of value needs to be created for the potential advertisers, but more importantly for association members.
In the 2018 update of the Association Communications Benchmarking Report by Association Adviser and Naylor Association Solutions, it was shown that 46% of associations surveyed “felt their ability to generate non-dues revenues (NDR) from their communications was a serious or significant challenge.” This is a 6% increase from the 2017 survey results where 40% of respondents indicated a significant challenge.
For sponsorship packages to be successful in generating revenue, the organizations purchasing the packages must see value in what is being offered. Just as marketing professionals test their email marketing campaigns to maximize engagement, some experimentation in the types of packages being offered will be necessary to develop something valuable to clients.
Develop Packages that Clients Want
It is best not to introduce “different” advertising opportunities outside the spectrum that the organizations are already doing. As an example, create advertising space on your website. Most organizations are buying web advertisements, so this doesn’t introduce a new idea. However, for this to be of value to sponsors, the website needs to be a site that members visit repeatedly and consider their most trusted source for industry information.
This means that content on an association website needs to be up-to-date and refreshed frequently. To persuade members to revisit an association site, the site needs to have new and interesting content posted daily. For an association that is manually posting new content, this can be a huge undertaking. It is advisable in these cases to seek out an AI-based content curator. These curators use artificial intelligence algorithms to locate suitable content and also have the ability to customize content to align to the interests of association members.
A common practice for associations is to sell sponsorship inside the e-newsletter that is sent to its members. Newsletter sponsorships must be something that is of value to both the sponsor and the members receiving it. The sponsorship could be an ad targeting individual members with new job opportunities or educational offerings that further their industry knowledge. It could also be a posting for a new product or service where sponsors need to reach association members that are key decision makers. Since e-newsletters are sent to members on an ongoing basis, whether that’s weekly or monthly, they serve as a constantly renewed location where sponsor messages can be sold. This revenue channel is frequently overlooked, yet it is available every month of the year.
Like the web site example above, an e-newsletter is also a place where the importance of fresh, relevant content should not be underestimated.
Leveraging Outside Experts
Associations are often under-resourced when it comes to managing marketing efforts such as email campaigns, website content and social media postings. Since it takes additional resources to sell sponsorship packages, it is not surprising that the 2018 Association Communications Benchmarking Report indicated that advertising sales were the second most likely function to be outsourced. This is primarily the case because the association sales team is focused on selling memberships or sponsorships for trade shows. They do not have time to sell advertising.
Organizations such as Association Revenue Partners (ARP) allow associations to outsource all their sponsorship sales to a group of experienced professionals. Professional sales teams like ARP are able to connect to organizations immediately and start selling. This means that an association’s staff can stay focused on members and shows, while the external sales team acts to drive additional revenue for the association. Using a third-party sales team allows associations to tap into experts with a proven record of not only selling sponsorships but also in delivering ads that are visually stunning and conceptually interesting.
Don’t Leave Money on the Table
Sponsorship packages are a stream of non-dues revenue available to every association. Virtually every touch point with members provides at least one opportunity to sell a sponsorship placement. These opportunities are also an additional avenue by which to provide valuable third-party products or services to association members and to increase member engagement. Don’t leave money on the table by ignoring the possibilities of sponsorships.