Sponsoring a sporting event can bring a company closer to its target market, garner goodwill among employees and customers, and generate free publicity. But look before you leap onto the links or into iron-man competitions; they may be fun, but there's not always a solid marketing victory.
The bottom line: smart companies decide beforehand what prize they want in return for sponsorships, and then track results carefully to make sure they win it.
Shortly after starting up in 1979, $15-million Frozfruit, based in Los Angeles, began sponsoring road races and other sporting events to introduce its frozen-fruit bars and get feedback on products in the lab. "It's the best way to get close to our target customers -- health-conscious adults," says president Charlie O'Brien. He sends his product and reps to more than 100 events a year nationwide, attending a few himself. Race participants pick up coupons, T-shirts, and hats; sample the fruit bars; and walk by a table stacked with short product surveys -- to which the company claims it gets a 50% response rate.
Coupon redemption usually jumps after race events, but the real payoff is the market research. When survey results suggest a new flavor is too tart or too sweet, Frozfruit tweaks it before sending the bars to store shelves. The feedback also helps the company to determine pricing and sell distributors on new products.
The cost? About $100,000 a year. O'Brien says he considers the cost a long-term investment because it goes toward building distributor and customer relations. He targets mostly small events at which Frozfruit will gain more exposure and the sponsorship fees are low.
But for some companies, the payoff isn't great enough to justify the expense, no matter how small. Manco, a $76-million Westlake, Ohio, retail supplier of duct tape, learned that lesson after sponsoring the Indy 500. Race cars were already using Manco's tape, so last May Manco invested $150,000 in an official sponsorship, merchandising tie-ins, and a customer write-in contest for most creative use of the tape.
The contest responses generated a database of 3,000 consumer names, but sales didn't increase the way operations chief Tom Corbo wanted. A few of Manco's retail customers even called to question the value of the program. "Some of the PR worked against us." So Manco passed on sponsoring this year. It's easy to get sucked into sponsoring every event at which your product's used, Corbo warns. "Don't let your ego get into it. We decided we're better off just giving away the tape." -- Susan Greco and Phaedra Hise* * *