Measuring ROI

Measuring ROI

In the past six months, we have had an onslaught of brands and sponsors approach us for help in measuring ROI on their sponsorship investments. Measuring ROI is critical. It is truly the only way you can know if your investment with a property or rights holder was good or not. And yes, you can measure beyond “sales” and lead generation, and as the research companies like to measure (which I am not a big fan of), by “propensity to buy.”

You can measure community engagement, brand recognition, employee engagement, employee retention levels, recruitment, and member/customer satisfaction. You name it and you can measure it. I thought I would provide some general thoughts around ROI measurement. Here are five basic critical elements to understanding sponsorship ROI measurement that are the basis of our discussions with all of our clients.

  1. Determine what you are measuring. What were your goals with this investment (sales leads, revenue lift, case lot sales, employee satisfaction, brand image etc.)? You could have more than one goal.
  1. Know that, of what you bought in assets, the rights fee is the value of the assets that you bought, not the return on investment or ROI. Just because you acquired naming rights and 30 other assets for a total investment of $50,000 does not set the bar for your ROI at $50,000. That is crazy—it is like giving your stock broker/investment advisor your stock portfolio worth $50,000 and saying, “Just make sure I get that $50,000 back at year’s end.”
  1. To measure success, you need to set benchmarks. If you are looking at heightening brand awareness around the active participants at the event you sponsored, you need to know how many of them recognize your brand prior to the event—then after it. Then you see if you met your goal of increasing brand awareness among users by 11% or whatever was the goal. Without benchmarks, you cannot measure success! It is that simple.
  1. Ensure you budget for ROI measurement—above and beyond your rights fees, part of your activation dollars, or specifically research dollars.
  1. Know that your activation has worked as well—that needs to be measured in addition to the outcome on your asset investment.

I hope this helps brands and sponsors to better understand measuring ROI. I also hope that properties understand this. Because it is how you will be measured!

 

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