Friday, April 26, 2013

Wide or Narrow: How to Clip a Great Sponsorship Portfolio

Sponsorship can be an effective strategy to connect a brand with its target market. To succeed, it must be just that- a strategy. Selection of a sports or entertainment property with which to link a brand must consider who should be reached (target audience) and what should be accomplished (objectives). Another aspect of sponsorship as a strategy is the thematic nature of a sponsorship portfolio. For example, Bridgestone has amassed a collection of partnerships with major professional sports properties including the NFL, NHL, and PGA Tour. The audience characteristics of the fan bases for these leagues are a good match with the customer Bridgestone desires to serve. Other sponsorships complement the league-wide deals including venue sponsorship (Bridgestone Arena in Nashville) and Bridgestone Invitational (PGA Tour event in Akron, Ohio). Bridgestone has made a strategic decision to cut a wide swath by spreading its sponsorship investment across multiple sports to maximize audience reach.

An alternative approach to crafting a sponsorship portfolio is to adopt a narrow focus, using a single sport (or even a single property) to align a brand with a specific audience. One brand succeeding in developing a narrow sponsorship portfolio is Great Clips. The Minneapolis-based company has more  than 3,000 locations. Great Clips is using auto racing, primarily NASCAR, to reach people who are potential customers. One way in which Great Clips communicates its motorsports involvement is through the Great Clips Racing sub-brand. The website for GCR includes driver bios, a photo gallery, social media links, and news. GCR falls under the company's racing sponsorship portfolio that includes:
  • Title sponsor- Great Clips 300 NASCAR Nationwide Series race in Atlanta
  • Title sponsor- Great Clips 200 NASCAR Nationwide Series race in Phoenix
  • Sponsor- Driver Kasey Kahne in NASCAR Sprint Cup and Nationwide Series
  • Sponsor- Sonoma Raceway, Sonoma California
  • Sponsor- Fast Friday, a preliminary event for Toyota/Save Mart 350 NASCAR Sprint Cup Series, Sonoma Raceway
In addition, Great Clips will activate its Sonoma Raceway sponsorships by having a mobile salon on-site on two racing weekends (for the Sprint Cup Series and IndyCar Series). The mobile salon brings the Great Clips sponsorship to life, enabling racing fans to see and interact with stylists and even get a haircut. This activation is a platform for Great Clips to familiarize fans with the brand and show employees in action.

If students ask which sponsorship portfolio strategy is better- a wide collection of different properties or a narrow collection of properties sharing a common thread like auto racing- the answer is an unequivocal "it depends." The variables making the answer "it depends" are the very ones mentioned at the beginning of this post: target audience and objectives. The more diverse a target audience's characteristics, the more likely that a wide breadth of partnerships is ideal for appealing to different sports interests and preferences. When the target audience characteristics are more homogeneous, finding a single idea around which to build relationships (e.g., college football, action sports, or auto racing).

The wide versus narrow question entails trade-offs, too. A wide sponsorship portfolio could maximize audience reach, but it typically comes at a higher cost and requires more resources to manage and activate the various partnerships. In contrast, a narrow sponsorship portfolio will be more manageable but likely does not create as large of a brand footprint as a more diverse collection of sponsorships. Regardless of which strategy is preferred for selecting sponsorships, their success ultimately depends on what a sponsor does with the relationship once it is owned. Activation is the fuel for sponsorship success. Otherwise, the portfolio is little more than a collection of name brands that are not being utilized to their full potential.

Sports Media Pro: Great Clips Renews Sonoma Ties, Adds Fast Friday