The Sponsor: The sponsor is the end customer. The sponsor’s key competence is aligned with their core business, whether it be manufacturing cars, writing software, consulting businesses, banking or designing handbags. The sponsor makes decisions on building new factories, hiring employees or launching marketing programs, based on that project’s investment yielding a positive Net Present Value (NPV).
The Activator: This is typically an events agency such as Momentum, Octagon, or IMG. They work for the sponsor to build all of the auxiliary activities upon the sailing property platform.
The Property: This is the sailing team. It provides the base for the activator to build a positive NPV business development program targeted at the sponsor’s core business. The end goal of the sailing team is to manage the sporting operations, while supporting the activator’s plan.
I’ve read a lot of team sponsorship proposals over the past 5 years: Volvo Ocean Race, America’s Cup, World Match Racing Tour, European IRC, and Med Cup teams... Most sponsorship proposals lose sight of, both, the customer and the product. When I read most sponsorship proposals, generally, my first thought is ‘Hey, I’d love to sail for this team. This is going to be fun.’ The proposals talk about the race, adventure, prestige, competition, sailing team members and the program’s management structure - all of the key elements to winning a sail boat race. While this type of presentation does have a place in the sales cycle, it does not focus the product to the customer. The product that we are selling is a platform for corporations to leverage their core business goals.
Remember, we are selling the activation plan, and not the sailing team. The reason for this is straight forward; If a sponsor only financed the sailing property and did not make a further investment into activation, they would, most likely, just barely recover their costs of the property's sponsorship cost. However when the property is coupled with a sophisticated activation program, then 2 things happen; Not only is the activation the source of the most significant returns on investment, but also, the activation, through network effects, brings more attention to the sporting property, thus increasing the returns that the sporting team generates. The following illustration gives a basic insight to this principle.
Since we've examined the marketplace (in part 1), understand how commercialized sailing projects are structured, how sponsors financially justify their investments, and where the real value is generated we are now ready to look at the sell cycle....stay tuned for part 3 of this series.