Entrepreneurs face myriads of challenges, including raising capital, creating scalable products and services, managing risks and achieving long-term business growth. In addition to tackling these challenges, small and medium-scale entrepreneurs (SMEs) have to find innovative marketing communication approaches to achieve visibility for their products and services. In this article, I would like to propose sponsorship as a strategic marketing communication tool for SMEs who have limited marketing budgets.
Wikipedia refers to sponsoring something (or someone) as the “act of supporting an event, activity, person, or organization financially or through the provision of products or services.” Sponsorship is among the key elements of the marketing communications mix. The other elements are advertising, public relations, sales promotion, personal selling, direct marketing, and events. Identifying an effective marketing communication mix requires organizations to have a good understanding of who their target audience and customers are.
Sponsorship is an element of the promotion mix, which companies with large marketing budgets use to maintain visibility and get their brands and messages out to their target audience. Multinationals and other large organizations use sponsorships to build long-term brand equity, consumer loyalty and generate revenue. Many of these organizations are headline sponsors of sporting events and various programs in the entertainment sector.
The British multinational investment bank and financial services company, Barclays plc, was the title sponsor and banker of the Premier League between 2001 and 2016. The relationship, which continued until the end of the 2018/19 season of the top-level English football league system, has been extended to the 2021/22 season, following a new deal that was signed in March of this year. Apart from being a title sponsor, there are other opportunities for sponsorship in different aspects relating to the same event. For instance, Coca-Cola is the official soft drink partner of the English Premier League.
In the ongoing reality TV show, Big Brother Naija (BBN) 2019, Bet9ja, a Nigerian sports-betting company, is the headline sponsor of the show. Amongst the category sponsors are Heritage Bank Plc, Nigerian Breweries Plc, Pepsi and Oppo Mobile Nigeria.
But it would be a misconception to think that sponsorships are the preserve of multinationals or large corporates. SMEs can also tap into the opportunities that sponsorships offer for business growth. And to be sure, these opportunities do not have to be earth-shattering, or on TV like sporting events or television shows. What is vitally important are the branding opportunities that sponsorships provide, no matter how small the event.
Sponsorships can also enable SMEs to attain niche marketing. Also called micromarketing, niche marketing is about creating an opportunity where businesses can identify and satisfy the needs and requirements of a target audience whose needs are not being addressed by other firms.
Been able to develop products or services to fulfill and satisfy the needs of an untapped market is an ongoing process. Sponsorship of events and other activities becomes an important tool to keep the conversation going between the SME and its niche market. There are various forms of sponsorship opportunities SME entrepreneurs could consider to boost their business bottom line. A few of them are as follows:
Book marketing events: SME entrepreneurs could look to leverage events such as book readings, book reviews, book launches, literary exhibitions, etc. But before an organization can decide to utilize such opportunities as effective marketing communication tools, the events must align with the value propositions of the SMEs and also be of interest to their target markets.
The advantage of sponsorships is that they provide access to a captive audience for the businesses to be able to meet one-on-one and carry out direct marketing to their target audience. At such events, data gathering is important and a much easier exercise to undertake. Collecting contact information of participants is necessary for subsequent engagement with the target audience.
Movies/cinemas: Opportunities for sponsorships abound in the entertainment industry, particularly with the movie and cinema ecosystem. SMEs can partner with film promoters and owners of cinemas to activate and promote their products or services, particularly during the premiere of new films. An organization or brand that supports the production of a film at any particular stage of the filmmaking process can have the opportunity of having its brand logo mentioned in the end credits of the films.
Trade associations: These are very relevant business membership-organizations that provide opportunities for regular meetups. Such meetups are fertile grounds for networking, creating visibility, making presentations and speeches, merchandising materials, etc.
SME entrepreneurs have to see trade associations as very important and strategic to the growth of their businesses, apart from their personal and professional exposure such organizations can provide. Hence, it is important to support such events through sponsorships. However, entrepreneurs would have to join trade associations that are relevant to their areas of business pursuit.
The Nigerian-American Chamber of Commerce, Nigeria-British Chamber of Commerce, Nigeria-South Africa Chamber of Commerce and Lagos Chamber of Commerce and Industry are some of the chambers of commerce SME entrepreneurs can consider becoming members of.
Championships: Nigeria is a sports-loving country. While global multinationals with deep financial pockets can afford to sponsor sporting events to maintain their visibility and brand equity, SME entrepreneurs may consider sponsoring local teams during championship events either by providing cash sponsorship or in-kind support where items used by the teams will be branded by the SMEs.
Community events: Entrepreneurs are members of different communities where they operate. Sponsoring events in their communities would be a form of corporate social responsibility (CRS). Nevertheless, such activities would also help in promoting brand awareness of SMEs in those communities.
The essence of this article is to underscore the fact that sponsorship as a marketing communication tool is not only meant for big corporate organizations. The sponsorship space is open and available to every business owner. But it is critical to understand where your business can play with a minimal marketing budget.
The saying, ‘A journey of thousand miles begins with a single step,’ which originated from a Chinese proverb, can be applied to the micromarketing efforts of SMEs. For the SME seeking to enhance its market presence and competitive advantage, having a sponsorship consideration could help in adding value to customers and achieving customer retention.