How to Effectively Price Event Sponsorship Packages
Event sponsorship packages are key ways to raise revenue so you can create an incredible experience and pay your team well. Depending on the size of your event budget, you may depend on sponsors just to get paid at all.
Event sponsorships are also powerful because they can actually help you promote the event. Your sponsors will do some marketing for you. For example, if a local business sponsors your event, they will undoubtedly tell their customers and fans, which ultimately increases your exposure.Event sponsorships are key ways to raise revenue so you can create an incredible experience and pay your team well. Click To Tweet
Of course, this all hinges on your ability to price your sponsorship packages well. If you price your packages too high, sponsors will look for other opportunities. If you price your packages too low, you run the risk of not being able to afford the event or pay you and your team.
In this article, we will help you find the right balance for your event sponsorship package prices.
Determine Your Audience Size
When you sell a sponsorship package, what you are really selling is access to a certain audience. Your job is to help sponsors generate leads and sales from that audience.
In order to price your sponsorship packages, the first thing you need to know is the size of your audience. The larger the audience, the more you can charge for the event sponsorship package because you’re exposing your sponsor to more people.
In most cases, your audience size is the same as the number of people who register to attend your event. If you don’t take pre-registrations, you’ll need to estimate the number of people who will show up. If your sponsorship package includes digital media options or direct mail, you’ll need to know those numbers as well (number of Facebook followers, email list size, etc.).
Outline Your Sponsorship Packages
If you haven’t already, now is the time to create a detailed outline for each of your sponsorship packages and determine what is included in each package.
For instance, you may offer silver, gold, and platinum packages. Create a column for each. In each column, list all of the assets a sponsor would receive if they purchased that package. Here’s an example:
- Logo on sponsor board at entrance
- Logo and copy on event itinerary
- Coupon distributed to guests via email and event app
- Special thank you during opening announcements
- Inclusion of freebie in swag bag
- VIP tickets for four people
- Meet and greet with [big name guests]
Do that for each of your sponsorship packages. This will help you plan (so you don’t forget to give your sponsors something you promised) and help you understand the cost of the opportunity.
You’ll also find it helpful to build out your sponsorship packages with assets that don’t cost you much, if anything at all. These boost the value of your packages without incurring any more costs. You could offer social media shoutouts, email blasts, naming rights (the “Athena Beauty Skin Science Talk”), and logo placement on printed materials.
Look Up the Market Rate
If you simply guess the value of your sponsorship packages, there’s a good chance you will either ask for too much (and scare sponsors way) or ask for too little (and short change yourself). So this step is extremely important.
You can get pretty close to the optimal package price by simply looking at what other events charge for similar opportunities in their sponsorship prospectus. This is especially true if you look at events that are similar to yours and have had a long time to optimize their price points.
For instance, if you look at five different packages and they all charge between $4 and $8 to include a giveaway item in a swag bag, that should give you a pretty good idea of what you should charge. Charging $20 for this asset, for instance, would scare off potential sponsors. Asking for $2 would leave money on the table.
Look at as many data points as possible during your research. If you don’t find much publicly available information, try reaching out to those event organizers and asking to see their sponsorship prospectus. Don’t mention you are a competitor, of course.
It’s also important to keep in mind that sponsoring your event is only one way sponsors can reach your audience. This means you’re competing with other forms of marketing that your potential sponsors might invest in. You’ll want to know what the market charges for those as well. For example, if you offer to promote your sponsor in an email blast to your guest list, you will need to know the price of that service outside of an event sponsorship package.
Consider the Actual Value of the Package
What you should charge for an event sponsorship package shouldn’t come from a formula. It’s simple to ask for 50% over cost, but that isn’t how your sponsors decide whether your packages are good deals for them.
Think about your sponsor’s perceived value of the sponsorship. What will they get out of the deal? How impactful is that to their business or cause?
For instance, if a sponsorship package costs $500 and creates $100,000 in sales, your sponsor got a really good deal. They would have probably paid far more than $500 for that opportunity. On the other hand, the sponsor will probably be upset if that $500 package only creates $75 in sales. In both of these cases, the cost of the package and its value don’t align well.
Ideally, there should be a substantial difference between the value your sponsors get from the package and what you charge. This is an investment, after all, so it should be beneficial for them. And if they make good money from the deal, they’ll definitely sponsor your next event. But don’t make the package so cheap that you make nothing.
Be Willing to Negotiate
Sometimes your sponsors can’t – or won’t – pay your asking price. They may not think you can deliver the value you promise, they may not have the cash to pay your bill, or they may haggle out of habit.
Some sponsors may have unique needs, as well. For instance, a sponsor may know their products and services have a particularly low conversion rate so they can’t pay as much. Or a sponsor might ask for a particular type of promotion that doesn’t fit into your pre-built packages.
It’s always important to leave yourself open to negotiating. Don’t discount your prices too much (or people will take advantage of you), but take sponsors’ offers seriously. 90% or 80% of your asking price is better than nothing at all, right? In fact, you may want to pad your prices with an extra 5% to compensate you for the inevitable discounts you’ll have to give out.
Adjust Your Price Points Over Time
Every event and audience is different. It’s nearly impossible to find the exact right sponsorship price point for your first event, especially if this is your first time taking sponsors. Don’t worry about finding the optimal point right away.
Instead, focus on fulfilling the promises you made to your sponsors. Make sure they get the value they paid for. Solicit their feedback after the event to find out if they felt sponsoring was worth their investment.
Then, tweak your event sponsorship package prices for the next event. Raise the price if you think your value calls for it or if sponsors clamor to sponsor you. Lower your prices if your value is less or if you have trouble finding sponsors.
Over to You
Now that you know how to price your event sponsorships, start putting packages together today. The sooner you sell sponsorships, the sooner you will create more room in your budget and more money in your pocket.