One reason for the steady increase in sponsorship spending is the perceived long-term value associated with an event. A worldwide study of 13,000 people, conducted by Mediaedge:cia’s MediaLab in 2003, found that 45 percent noticed the companies and products that sponsor events, 42 percent believed that the companies and products that sponsor events are of high quality, and 28 percent claimed they would buy from the companies that sponsor these events. For example, NASCAR is particularly known for its devoted fans. Depending on the product and driver, as many as 94 percent of fans purchase the product of the NASCAR sponsor over any other product in the category. They are also more likely to have positive feelings about NASCAR sponsors than about non sponsors of competing products.
For financial services companies (unlike, say, beverage producers), sponsorships are not primarily meant to generate immediate sales. But they do have numerous other benefits:
Build brand awareness by associating a company’s product with an event of importance to its target market. Brand awareness is further extended through advertising, public relations, and other efforts that surround the sponsorship.
Shorten the sales cycle. Getting the company’s name known through events and sponsorships helps purchasers relate the company’s products to a cause or event that customers also support. When given a choice, consumers would rather purchase a product with which they have an affinity.
Maintain and strengthen existing relationships. Events provide opportunities to entertain clients in ways not typically available to the general public. Client-only receptions, celebrity “meet and greets,” and event packages including tickets and parties can be created for clients and key prospects.
Demonstrate to attendees a company’s expertise through seminars and exhibits. Improve employee morale by providing employees with tickets to an event, creating an employee-only hospitality area, or holding internal contests for event-related prizes.
Locally, sponsorships help to identify and link a company to the community it is serving. Sponsorships build credibility, demonstrate a sense of corporate caring and giving, communicate the brand’s philosophy to the general public, and most important, get employees and management out into the community among clients and prospects. As competition among financial services companies grows for share of the consumer’s wallet and mind, advertising has become cluttered, and consumers are less able to differentiate products. Financial companies, in particular, are looking for new and versatile ways to sell relationships, not just products.
A prioritized list of the benefits you are seeking will guide your evaluation of the kinds of events to consider. Bank of America, which spends some $50 million in sponsorships annually, has different goals for different local markets. In regions where the bank is dominant, it sponsors community-based activities, as a means of building relationships and loyalty. Where competitors dominate, BofA looks for higher-profile sponsorship opportunities in order to build brand awareness.
Sponsorships allow versatility, creativity, and interaction so that companies can communicate with their audiences in personal and direct ways. For example, MetLife looks for exclusive sponsorships that permit the insurer to target human resources professionals, to whom it sells employee-benefits programs. As a result, MetLife has become the exclusive sponsor of Workforce magazine’s Optimas HR awards.
The billions of dollars spent annually on events, nearly 70 percent of which goes to sports, is intended to help fans know that Visa, for example, understands sports fans and what is important to them. As the tagline says, “Visa, it’s everywhere you want to be.” Visa’s more than $15 million sponsorship of the National Football League works to drive the point home. Spending by financial services firms on sponsorships has steadily risen over the past ten years. In 2002, nine financial services companies—Visa, MasterCard, Bank of America, John Hancock, J. P. Morgan Chase, American Express, MBNA, Charles Schwab, and Wachovia—together paid in excess of $320 million in sponsorship fees. Financial and other companies will continue to spend more on sponsorships, but the distribution of those dollars is changing. According to the
Recipients of Sponsorship Spending
International Events Group (IEG) Sponsorship Report (2003) “expansion will come as the result of partnerships with a wider array of nontraditional partners.” Sponsors are focusing more on interaction and experiential marketing— not just inviting clients to watch the game, say, but also giving them the chance to participate in some way.
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