By James M. Personius
Few things appear to be as entrenched in the association mindset as the widespread commitment to the platinum-gold-silver-bronze (PGSB) tier structure of sponsorship offerings. While varying across associations, the PGSB structure almost always involves precious metals or gem stones denoting a hierarchy among sponsors (with a related hierarchy of prices). Many associations have embraced PGSB with almost religious-like zeal. In fact, we have seen many signs of extreme resistance to change where PGSB is concerned. However, we strongly recommend that all associations review their use and commitment to the PGSB structure and truly ask whether PGSB is helping or hurting their sponsorship marketing.
No one knows who invented PGSB or where it came from, but the ease of copying the structure and modifying it for a new association’s prices and offerings makes it a simple and compelling entry-level structure in sponsorship marketing. Its widespread use seems to validate it as a useful tool. It is not difficult to understand and relatively easy to implement. PGSB has become a de facto standard in the association industry.
What is wrong with that? Simple, understandable, easy to implement, and inexpensive are all good things. However, our research shows that PGSB is undermining associations and sending the wrong messages to sponsors and members/attendees. This is a serious problem and is hindering sponsorship sales for most associations. Where associations perceive PGSB to be successful, we found associations severely underpricing their sponsorships and leaving significant money on the table.
What is wrong with PGSB?
PGSB is association-revenue centric; it says one thing: “We want money.” It places the money discussion front and center in the sponsor discussion. This is a negative start to any business conversation.
Prices are set by how much the association wants/needs, not what sponsors want or are willing to pay. PGSB probably scares off more small and medium sponsors than it attracts big sponsors.
PGSB is pre-defined, general, and untargeted. It is more like a restaurant menu of offerings that some (any) sponsor might want, rather than flexible structures that meet the needs of specific sponsors. Most sponsors have unique needs and goals and are willing to pay for customization that helps them access the audience.
PGSB sells prestige, rather than access. With higher prices and a hierarchy in names (platinum, diamond, etc.), PGSB emphasizes the prices sponsors pay as a sign of sponsor value; it creates a hierarchy of perceived prestige across sponsors based on sales amounts. PGSB is inherently biased toward larger, established companies over smaller companies or new entrants. Yet, most innovation and new solutions emerge from the latter category.
PGSB insults lower-level sponsors as second-class. PGSB creates a ranking among sponsors that says higher-level sponsorships are more prestigious than lower-level sponsorships. This turns off many potential sponsors who are interested in sponsorship activities but do not want their brand to be diminished by the perception of lower-level tiers. Many potential sponsors fear sending a subtle negative message to the exact audience they are paying to reach if they buy lower-tier sponsorships. Most associations cannot afford to alienate potential sponsors or damage the messages sponsors want to communicate.
Where is the sponsor ROI? PGSB never discusses sponsor ROI and instead focuses on pre-defined offerings of questionable value and perceived prestige. Businesses make an investment when they buy sponsorships, and they want to know they will get a return on that investment.
Sponsors want to be seen as partners to the association, not donors. Sponsors value the implied endorsement of the association sponsorship. Sponsors prefer that the sponsorship process be somewhat discriminating and private (and perceived to be competitive). PGSB prostitutes the association by selling sponsorships to anyone with money and eliminating any potential value of implied endorsement.
Where is access? Access is the most important thing to sponsors. Most PGSB structures ignore access entirely and focus on trivial things like banner font sizes, logo positioning, and sponsorship level while striving to increase the prestige of the sponsorship to justify its price. Desirable sponsor access is almost always a unique and negotiated quality that is difficult to predefine and price.
Where are the member benefits? The best sponsors focus on their solutions to member problems and needs. Successful sponsorships help associations, members, and sponsors. PGSB focuses primarily on association needs.
PGSB says the association does not understand the value of its membership or what sponsors want to buy. PGSB is a sign to potential sponsors that the association is not business savvy; it does not know or understand its demographics. PGSB does not speak the language of business in discussion with sponsors. PGSB also says the association wants anyone with money to be a sponsor, rather than specific, targeted companies that benefit the membership. Almost everyone intrinsically understands that when buying an ad on TV, you want to know the audience size and demographics. Yet, most associations do not take the first step toward business value and audience demographics when asking sponsors to “advertise” in their spheres.
It is time for every association that wants more sponsorship revenue to take this opportunity to review their sponsorship structures. The recipe for success is simple: Sell what sponsors want to buy. Successful associations solve member problems. Profitable sponsorships should be a major element of associations helping members solve their problems.
James M. Personius is the owner of Personius & Company and Smart-Promos.com, a boutique management consultancy and promotional products distributorship. His firm specializes in helping associations with their sponsored logo products for conferences, conventions, and other major events. His book, Secrets and Techniques of Sponsorship Marketing: What every association, conference, convention, and seminar needs to know to effectively sell and grow their sponsorships, is available on Amazon.com.