In DEpth Corporate Hospitality Sheds Recession-related ... · Corporate Hospitality Sheds...

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October 12, 2010 800/834-4850 | www.IEGSR.com

In DEpth

Corporate Hospitality Sheds Recession-related Stigma, Renews Focus On ROI Formalized approach to measuring return from hospitality includes reporting and tracking mechanisms.

Following a couple of years where corporate hospitality became a phrase to be whispered furtively and a tactic to be undertaken quietly, the business-building practice has begun to step back out of the shadows as the economy improves and the specter of government bailout funding fades.

Although many companies reduced the scale of client entertainment efforts due to belt tightening and/or public relations concerns over the past two years, most continue to view hospitality as an effective way to build relations with clients and prospects outside of corporate meeting rooms. thus sponsorship-related hospitality activity is expected to rebound alongside an overall economic recovery.

“As the economy bounces back, we are seeing a loosening of purse strings and more investment in the on-site event experience,” said Keith Bruce, president of SportsMark Management Group, which specializes in creating and managing hospitality programs.

But whether as a result of recession-related fiscal responsibility or simply a more sophisticated approach to hospitality, those who work on client entertainment projects are noticing a change in approach on the part of many marketers—one that emphasizes unique, one-of-a-kind experiences aimed at smaller, more targeted groups of people, and with more focus on the ability to measure return.

Experiences, Not DestinationsMore companies than ever before are looking for unique, money-can’t-buy opportunities around which to entertain clients and prospects.

“People expect more than the typical golf outing in Orlando or Hawaii,” said Murray Schwartz, a partner with RPMC, a firm specializing in hospitality.

“In every rFp we respond to companies use the term ‘unique, one-of-a-kind event experience,’ ” said SportsMark’s Bruce. “There is definitely a strong desire on the part of sponsors to infuse those types of experiences into the overall event experience. Is that a brand new trend? No, but it definitely has had a resurgence.”

Below, five examples of how companies are leveraging sponsorship with hospitality experiences that go beyond tickets and tents.



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the common denominator: access, whether to athletes, entertainers and other key stakeholders, or to exclusive locations, such as usually restricted areas such as locker rooms and backstage.

Aon/Manchester United. Aon Corp. (“Why Aon Chose to Aim Big With Manchester United Deal,” 12/07/09) jump-started its new partnership with British soccer club Manchester United last fall with Skills and Drills, a five-city U.S. tour that featured coaches and players from the Man U soccer school.

The professional services firm used the events to host top clients and their children, who participated in a half-day soccer clinic. the company accommodated 40 to 50 families at each event.

“It was a very compelling opportunity for an Aon broker or account manager to spend time with his or her clients in a very unique setting,” said David prosperi, the company’s vice president of global pr.

Sony Ericsson/WTA Tour. Sony Ericsson Mobile Communications AB leverages its sponsorship of the women’s pro tennis tour by offering clients and prospects the opportunity to participate in tennis clinics led by pro tennis players, among other one-on-one activities.

“It’s one thing to go to Wimbledon, but it’s another thing to meet athletes and participate in different functions,” said rpMC’s Schwartz, whose agency developed the program for the wireless phone manufacturer.

“that helps differentiate the event from a regular tennis tournament, and people will talk about the experience.”

Janus Capital/Ironman. Janus Capital Group Inc. uses its sponsorship of eight Ironman triathlons to gain a point of differentiation from competitors offering hospitality at more mainstream events.

“We don’t do anything in golf and tennis because our competitors are there; we want to stand out from the pack,” said Casey Cortese, Janus’ vice president of sponsorships & community relations.

The global investment manager activates by offering financial advisors the opportunity to participate in the race experience, including serving as wetsuit peelers in the transition area and awarding medals to winners.

SIDEBAR

Janus’s Internal Hospitality Program Evaluation FormBelow, the survey given to Janus Capital Group Inc. employees to elicit feedback on specific client entertainment events, such as sponsored Ironman triathlons. The company also directly surveys financial advisors and others entertained.

POST EVENT SURVEY

Overall, do you feel the event has/will lead to an increase in business? Yes____ No____If so, how? Comments:

Do you feel that the event has/will improve your relationship with your clients? Yes____ No____Comments:

Did the event provide an opportunity for quality business discussions? Yes____ No____Comments:

Did you leave the event with a confirmed future point of contact? Yes____ No____Comments:

Did the event help secure any new prospects? Yes____ No____Comments:

Did the client open the door for increasing the amount of business they do with our firm? Yes____ No____Comments:



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Office Depot /NASCAR and Stewart-Haas Racing. Office Depot, Inc. leverages its sanctioning body and race team involvement by hosting clients and prospects at each of the Sprint Cup Series’ 38 races.

the retailer offers three hospitality programs based on the size of the account and the opportunity to sell incremental products or services, among other factors, said Kari taylor, the company’s director of global accounts.

For large customers, Office Depot offers a VIP experience that offers the opportunity to attend the nASCAr drivers’ meeting, watch the race from pit road and meet other sponsors.

the company also offers a hospitality experience that includes food, pit tours and a meet-and-greet opportunity with driver tony Stewart, as well as a race package that features a pre-race and grandstand experience

Bank of America/NASCAR. Looking for a platform to engage customers and employees, Bank of America Corp. in 2007 asked nASCAr to develop a hospitality platform around its end-of-season Champions Week celebration.

the sanctioning body responded with the nASCAr Evening Series, a dining experience featuring a nASCAr-inspired menu created by a celebrity chef. “they wanted customers and employees to taste and feel their nASCAr sponsorship,” said Matt Schulman, nASCAr’s director of business solutions.

The 2010 event will be held in Las Vegas and feature Wolfgang puck. previous chef participants have included Mario Batali and Emeril Lagasse.

Isolating Effect: Measuring The Success Of Corporate HospitalityEven though it is aimed at achieving a quantifiable result—increased business or cooperation from those entertained— practitioners say it can be a challenge to evaluate hospitality’s impact.

According to both sponsors and their hospitality advisors, the primary difficulty—some say impossibility—is singling out the effect of hospitality from other factors that go into a customer’s decision to take incremental action.

Sponsorship analytics firm SSG Marketing works with clients to compare sales lifts among customers entertained at an event against a control group of customers that did not attend.

Did the event help you secure a face to face meeting with a higher level decision-maker at a client company? Yes____ No____ N/A____Comments:

Did the event help convince a client who was on the fence to keep their business with our firm? Yes____ No____ N/A____Comments:

Did the event improve and enhance client’s image of our firm? Yes____ No____Comments:

In your opinion, what percentage of your clients were highly satisfied with the event? ____

In your opinion, what percentage of your clients were not satisfied with the event? ______ Other comments/feedback on how this event could better assist you in building our business?

Source Janus Capital Group Inc., Tel: 303/333-3863



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“If a client increased their spend five percent over three years, and someone who attended an event increased their spend by seven percent, we will take that two percent uplift and attribute it to the event,” said terry Millis, account director.

And sales may not be the ultimate objective for every sponsor. When measuring success, Bruce believes sponsors should begin by considering the many strategic reasons for client entertainment—including and in addition to product sales—and determine what it is they truly hope to accomplish.

“Many times clients say, ‘I’m not relying on this experience to have a customer purchase more products; I’m using it to make sure they don’t leave our company.’ I’m amazed at all the different business rationales.”

At a minimum, offering a unique guest experience can provide a point of differentiation, something that can go a long way in highly competitive categories.

“I’ve been in sales a long time, and there is no question that we are all seeking to stand out,” said tyler. “Business is still conducted by people, and we use nASCAr as a platform to interact with customers and build relationships away from the office.”

Whatever the goal, it is important that measurement tools are customized to each sponsor’s situation, that they incorporate sales and behavior forecast assumptions and financial models already used and accepted by the company, and they account for opportunity costs as well as cost savings derived from the sponsorship to accurately gauge roI, said Larry Albus, senior consultant for IEG Sponsorship Consulting’s measurement and evaluation practice.

Hospitality Measurement Best PracticesRegardless of specific objectives, taking the following steps can assist marketers to more accurately gauge hospitality ROI.

Systematize reporting. rather than relaying on anecdotal feedback, sponsors should create a database to track who was invited to the event; what and when they attended; who from the company hosted them; whether or not they were an existing customer; and their purchase history before and behavior after attending the event.

For Office Depot, the first step in measuring success is determining who showed up.

“right out of the gate, we ask ourselves if the right person from the right organization attended the event,” said taylor, noting that many Fortune 500 companies have policies that prevent procurement staff and other employees from attending hospitality events.

Acquiring the necessary information can sometimes be a challenge. Although the sponsorship staff is most often responsible for measurement, they must rely on the sales department to supply the information.

to collect all of the necessary information, sponsors should develop pre- and post-event forms for salespeople. pre-event forms should require information on each prospect to be invited.

For existing clients, the form should include total business over the prior three years and sales projections for the next year. For prospects, the form should indicate where in the sales process they are, as well as short- and long-term revenue projections if the prospect becomes a client.

post-event surveys can help the sales team record immediate informal feedback from guests, such as what they thought of the event and the quality of the hospitality. they also can be used to track no-shows, including reasons why they did not attend and information on anyone who may have attended in their place.



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“We use a brief survey measuring how the guest’s overall experience was, and we also ask them their perceptions of Janus and if they would recommend us as a result of their experience,” Cortese said.

the company uses a separate survey to gain feedback from employees who hosted customers and prospects, including whether or not they believe the event will lead to incremental business, if it helped improve their relationship with clients and if it provided an opportunity for a quality business discussion (see Sidebar).

Establish ongoing tracking mechanism. Because the impact of hospitality on guests’ behavior is not likely to be immediate, sponsors must ensure that measurement is appropriate to the sales cycle. this involves having the sales force submit forms at regular intervals updating where the prospect is in the sales cycle.

Some sponsors have sales staff submit forms every month, while others ask for forms at three-, six- and 12-month intervals.

Sources Aon Corp., Tel; 312/381-1000 Janus Capital Group Inc., Tel: 303/333-3863 Office Depot, Inc., Tel: 561/438-4800 IEG Sponsorship Consulting, Tel: 312/944-1727 SSG Marketing, Tel: 248/207-0884 SportsMark Management Group, Tel: 415/461-5801 NASCAR, New York City office, Tel: 212/326-1800



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SELLInG

Change In Positioning Creates New Sponsorship Opportunities For ING New York City MarathonProperties should examine their positioning to determine if there is room to expand scope, attract additional interest.

Demonstrating that mature properties can reap significant benefits by revisiting how they position themselves to the public and to sponsors, the InG new York City Marathon has posted a double-digit increase in sponsorship revenue after launching a new marketing effort earlier this year.

Event owner new York road runners created the “I’m In. We’re In” campaign to broaden the event’s reach by leveraging the emotional connection to the race not only among participants, but also their supporters, other spectators, runners, new York area residents and casual fans.

nYrr has leveraged the broad appeal of the campaign to offer sponsors a health and wellness lifestyle platform, as opposed to selling tie-ins centered solely on the marathon.

IEG SR recently spoke with Ann Crandall, nYrr’s executive vice president, business development and marketing strategies, about the marketing campaign and the marathon’s new sponsors.

Below are edited excerpts from the conversation.

IEG SR: When did you launch “I’m In. We’re In”? What was the thinking behind it? And how are you incorporating sponsors into the initiative?

Crandall: We launched and presented the marketing platform to our corporate marketing partners at the end of March.

the objective is to illustrate the magnitude of the marathon and celebrate those who challenge themselves to run 26.2 miles. It also illustrates the inclusiveness of our property, including fans and friends of runners, spectators, new York City agencies and our partners.

Many people have a story about the marathon. the event galvanizes a broad spectrum of people, which is something the new marketing platform illustrates.

After we launched the platform, we gave a presentation to our corporate partners. We gave them around 35 to 40 activation ideas, and we asked them for feedback on how they could work together to support the campaign, both financially and promotionally, over the next two years.



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they voted on ideas that met their business objectives, and we tallied those results over the next month and a half. We presented the new assets June 22 at the nYrr upfront meeting for 2010 and 2011.

IEG SR: What role does the new marketing platform play in securing new sponsors?

Crandall: twelve to 18 months ago we looked at how we were positioning the marathon. We are now selling against the lifestyle of runners, as opposed to an individual event. We are an organization that is selling health and wellness through running, and we happen to have this tremendous product that communicates that.

It represents a shifting of positioning, and it is more of a lifestyle discussion with our partners instead of event specific.

that is the reason why partners are responding: running is a lifestyle, and it changes your life considerably. If you are running a marathon, you think about it for a year, you have a training schedule, you eat differently, you meet new people and your weekends change considerably.

We are talking to partners about six-month to year-round relationships based around the world’s greatest marathon. their ability to talk to their target audience is much broader than before. our partners understand what we are trying to do, and they are very enthusiastic about it. our hope is that other partners will want to jump on the bandwagon.

IEG SR: What new sponsors have you brought on this year, and can you share how they are tying in to the new campaign?

Crandall: We have four new sponsors. our newest partner is nissan (“nissan north America Expands Sponsorship program,” 04/02/10), our official automobile sponsor. They are using the partnership to promote Leaf, their new electric vehicle.

nissan will present the nissan Swag-n-Wagon tour. they are activating their association with the marathon, more so than with just runners.

The tour starts ten days before the marathon, and it will tour the five boroughs of New York City. The goal of the program is to get people excited about the marathon and get them to come out. A number of our partners are contributing swag for the tour.

We brought on tata Consultancy Services (“tata Consultancy Says hello to new Sponsorships,” 07/09/10) as the marathon’s official technology partner. They are a B2B partner, and they are using the marathon to showcase their technological capabilities to runners, who represent an upscale demographic.

Tata will present our athlete tracker, which allows friends and family to find out where a runner is located. They also will present our VIP brunch on marathon day for 3,000 guests.

We have brought on Subway, a relationship we are incredibly excited about for a number of reasons. First, they are a national partner, promoting the marathon at 22,000 restaurants across the country.

their spokesperson Jared will run in the marathon this year. It’s a great story: he’s 32 years old, he just got married, and he’s running to shed some weight. It’s a genuine story that running is a great way to get in shape.

Subway is promoting the sponsorship through a national TV campaign, dedicated radio spots and a tremendous amount of point-of-sale material. they are putting sandwich offers in goody bags, and they also will offer catering to people who plan to host viewing parties.

We also signed a new partnership with Unilever, which represents a category we have been working a long time. they are using the sponsorship to showcase the importance of health and fitness.

they will talk about their corporate brand and four products, including Dove and Axe. they are contributing product to our goody bags, and employees will run in the event.

Source New York Road Runners, Tel: 212/860-4455



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SponSor proFILE

Pepperidge Farm Supports Key Products Through Brand-specific PartnershipsSponsorships drive online consumer participation for packaged goods brands.

Like other snack foods aimed at children, pepperidge Farm, Inc.’s Goldfish cracker line is careful to promote a healthy lifestyle in addition to promoting its brand and products through advertising, marketing and sponsorships.

that is certainly the case with the Campbell Soup Co. subsidiary’s two-year-old promotional partnership with the nBA, a tie it recently renewed in a multiyear deal on behalf of Flavor Blasted Goldish, a line extension targeted at six-to-12-year-olds.

IEG SR recently spoke with neal Finkler, senior marketing manager on the Goldfish brand, about why the company partners with the nBA, how it leverages the tie and what kind of success it has seen.

Below are edited excerpts from the conversation.

IEG SR: Pepperidge Farm and Flavor Blasted Goldfish first teamed up with the nBA in 2008. What is the goal of the partnership?

Finkler: For us, childhood obesity is a big issue. We leverage the partnership with online and experiential programs that encourage kids to be more physically active. As a snack brand, it made sense to find a partner with the same goal. The NBA has a health and wellness initiative called nBA FIt/WnBA FIt, which works well for us.

IEG SR: So how do you activate?

Finkler: We have a section on www.GoldfishFun.com where we share games that kids can play outside. Kids today are playing video games or on computers, and many don’t know what to do outside. the Web site has more than 100 game ideas.

Salty Snack Sponsorships By Number Of Deals

Percentages do not equal 100 due to rounding.© 2010, IEG, LLC. Source: IEG Research

Other 2%Entertainment 5%

Festivals 11%

Causes 13%Sports 70%



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on the site, we are running the team Xtreme All-Star Sweepstakes that encourages kids to join team Xtreme, play outside and log their hours. the kids who play the longest are entered into a promotion that offers a trip to the nBA All-Star Weekend and the opportunity to meet team Xtreme ambassador Dwayne Wade.

We expanded the ambassador program this year with two other nBA All-Stars: Al horford and tony parker. We feature Team Xtreme ambassadors in TV and print ads, as well as in videos on the Web site.

IEG SR: In addition to supporting the fight against obesity, is there a marketing component to the nBA partnership?

Finkler: It’s a combination. the promotion doesn’t call out the fight against obesity, because that message wouldn’t resonate with kids.

IEG SR: the other major element of the partnership is the second annual nBA FIt/WnBA FIt Dribble, Dish & Swish program presented by pepperidge Farm Flavor Blasted Goldfish. Can you tell us more about that?

Finkler: It is a grassroots sports skills event for boys and girls seven to 12. We host more than 200 competitions in nine markets. Kids who earn the best score move on to six regional competitions, and the 12 finalists receive a trip to Los Angeles to compete in the national finals at the 2011 nBA All-Star Game. the winner will serve as a ball kid at one of the All-Star events.

IEG SR: Are you leveraging the nBA platform with retailers?

Finkler: Yes, indirectly. We have two phases of the program. After the All-Star Game we will continue to encourage kids to stay active by offering the chance to win team Xtreme branded apparel. We will also have messaging on packages, as well as more in-store support and account-specific programs.

IEG SR: has the program changed at all over the past two years?

Finkler: When the program first kicked off, there was a creative element where we asked kids to make up their own games for a chance to win a trip. It was more of a contest than a sweeps. Last year we decided to simplify it and share game ideas so that everyone who gets active has a chance to win.

We also added the two NBA stars this year and created some interesting new video content for GoldfishFun.com.

the video shares ideas of how kids in russia, Spain and other countries play outside. It is a semi-educational component that features videos with Dwayne and the other team Xtreme ambassadors.

IEG SR: Given the multiyear renewal, I assume the partnership must be delivering a return for pepperidge Farm. how do you

SIDEBAR

Milano Cookies Leverages Komen Tie To Support New Facebook PagePepperidge Farm’s other major sponsorship is a multiyear partnership with Susan G. Komen for the Cure on behalf of its Milano cookie line.

Below, Geri Allen, the company’s corporate & brand communications manager, explains the gist of the program—which features pink Milano packaging—and how the brand is activating the tie and boosting its social media efforts at the same time.

IEG SR: What are the details behind the Komen partnership?

Allen: It’s a six-year-old partnership on behalf of our Milano line of cookies. This year we are making a $130,000 donation.

IEG SR: There is a new leveraging element for 2010, correct?

Allen: This year we are activating the partnership through Milano’s new Facebook site. (www.facebook.com/pepperidgefarmmilano) We are donating an additional 50 cents for every consumer who shares a “Milano Moment” on the site, up to $50,000 for a total donation of $180,000.

IEG SR: What kind of success have you seen thus far?

Allen: We launched the Facebook site in August, and we now have 31,000 people who like us. They are not just fans—they like the brand. We have seen real success in sharing what’s going on.

SourcePepperidge Farm, Inc., Tel: 203/846-7000



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measure success, and what kind of results have you seen?

Finkler: We judge success by tracking how many kids join the team Xtreme program and the number of hours they log being physically active. those numbers have been much stronger than expected.

Source Pepperidge Farm, Inc., Tel: 203/846-7000



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opInIon

The Global Gap, Sponsorship Willpower, and News and NotesEditorial Director Jim Andrews’ latest observations, insights and advice.

I just returned from Sao paulo, where I addressed a media and marketing conference and met with a number of brand marketers from Brazil’s largest companies. As happens whenever I travel to places away from north America or Western Europe, sponsorship practitioners I talk to bring up “how far behind” their country is compared to the “advanced sponsorship markets.”

I always find this conversation problematic for a number of reasons. For one, it usually comes with an assumption that nearly all the sponsors and properties in the U.S., Canada and Europe are exemplars of best practices when it comes to selling, valuing, activating and measuring sponsorship. While certainly the leading sponsorship practitioners on both the buy and sell sides do come from these areas, north America and Europe are still—unfortunately—chock full of marketers and rightsholders who cling to outdated notions and ways of doing business, whether equating sponsorship with nothing more than exposure or believing that it cannot be measured.

For another, it raises the bigger question of why there should be such a gap at all. When we are talking about places like Brazil or China or South Africa, we are talking about full-fledged business markets populated with large global and local players, vast media infrastructures and fully developed sales channels. Although there are important differences and distinctions in media and marketing practices from country to country, when it comes to advertising, retail promotions and other communications, there isn’t this “underdeveloped market” mentality that exists with sponsorship.

So where does it come from? I believe it is simply a convenient excuse disguising a lack of willpower to make things better. If the major sponsors in a country such as Brazil want the sponsorship marketplace to become more sophisticated, offer them more relevant benefits that meet their objectives, and base rights fees on fair market value, they have the power of their checkbooks to demand it. they also have the ability to hold their colleagues internally to a higher standard of selecting the right properties for the right reasons, leveraging each partnership fully and evaluating return in a meaningful way.

this is not a gap between haves and have-nots, nor is geography really relevant. rather, this is the same gap that exists between those companies and properties in north American and Europe who “do sponsorship” right and those who don’t. It’s not that the latter group can’t do things right—they have the resources and the knowledge—it’s that they choose not to, typically because priorities lie elsewhere.

News and NotesAon Corp. has hired Allstate sponsorship manager—and my former IEG colleague—patrick pierce to oversee its Manchester



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United global sponsorship (“Why Aon Chose to Aim Big With Manchester United Deal,” 12/7/09). Could it be that with its recent $4.9 billion acquisition of hr consultancy hewitt that the company will also look for a domestic sponsorship platform? pierce, who will be based at the company’s Chicago headquarters, begins his new job november 1.

I hear the Central Intercollegiate Athletic Assn. is about to announce a new three-year deal with toyota, replacing former auto sponsor Ford. the conference and its Charlotte basketball tournament continue to grow in popularity among companies marketing to African-Americans. Toyota’s estimated high-six-figures-per-year deal is set to include title sponsorship of all CIAA broadcasts, the CIAA Fan Experience and the CIAA Mobile Marketing tour. Micah Fuller, senior vice president of sales for Cornelius, n.C.-based Urban Sports and Entertainment Group, sells CIAA sponsorships.

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