Here’s part 2 of my interview with Frank Pudarich, owner of bespoke automotive marketing company Octane Garage.
In part 1 of the interview we covered:
- Leveraging your sponsorship dollars
- Marketing 101 – What to include in a sponsorship proposal
- Delivering sponsorship value and managing expectations
Sponsorship objectives: business-to-business and business-to-consumer
Kym: There’s different types of businesses that use sponsorships for different types of reasons. For example if you were a manufacturer and distributor of batteries and battery-related products, what would your major objectives be, or what equates to a return on investment for you? Is it purely about more units being sold or are there other factors?
Frank: There’s other factors. It’s similar to when I was working in car care, most automotive industries are the same, they’re very similar in their customer base and their areas of distribution; so you’d have the automotive service and retail chains, and you’ve got the individual workshops, and you may have wholesalers.
- Create demand – you create demand with people who are actually your customers which are automotive technicians, automotive enthusiasts, D.I.Y. people that would walk into an automotive chain and buy your product. That’d be the same for most automotive products.
- And on the other side it’s business-to-business, your percentage of presence with the dealers.
Kym: Creating unique experiences theoretically in a business-to-business sense, they may stock more of your product, they may recommend it more often and your products may have a better position within their retail space?
Frank: Yeah, that’s exactly right. You may have other accounts coming to you because they can see you’ve created demand, they’d want to stock your product.
Kym: Given that in your sort of set up and the business model, is it better to target the business-to-business, or business-to-consumer?
Frank: I don’t think you can do either or, it’s got to be a joint effort to satisfy both. The Australian population and the number of sales I don’t think you can be in a position to do either or. I’ve kept that basis through every marketing decision in every company I’ve been with.
Kym: How important is it in your eyes that a sponsorship seeker has an established brand?
Frank: It makes it less of a risk. If you know they have a social media presence, if you know they’ve done media before, especially if it’s a program where you’re lifting what they’ve done previously and packaging it and using a lot broader scope, you want to be able to know they can actually meet those obligations and work in front of a camera or write a good press release.
So it reduces the risks somewhat. I also like to speak with previous sponsors and find out what were the pros and cons of the relationship. It stops people promising the world and then not delivering and moving onto the next season. The proposal looks fantastic on paper but when you do your background and you actually talk to people, there is a history there. It just makes it a less risky situation.
Kym: So to summarise some of the keys points, having your own brand reduces risk for the sponsor, builds trust but you can expect to be reference checked?
Frank: Yeah, yeah, for sure.
Under promise and over deliver
Kym: What’s your take on the theory of under-promise and over-deliver? Does that work in a sponsorship sense?
Frank: It does, but you’ve still got to promise enough to have the company engaged and want to take up the opportunity. Lay it all out on paper so there’s no misconceptions, everyone’s clear on what their expectations are; but over-delivering can be something as simple as taking the time to call somebody after hours. It could be something as simple as that, but you do want to exceed the sponsor’s expectations.
It’s a little bit hard to know what their expectations internally are, and they might sign a program and not really expect much out of it, and then you completely over-deliver and blow them out of the water, and it’s a fantastic relationship, but you always want to try to do this on a case by case basis.
Kym: Would you recommend once a sponsorship proposal has been signed, sealed and delivered that the sponsored party keep some of that investment aside to take advantage of an opportunity that hasn’t been planned for?
Frank: That’s where I’ve sort of like to factor in paying in instalments rather than lump sums because it sort of forces that into the project. They’ve got to plan, you’re not getting all the money in lump sums, so it’s spread out over the course of the year so it does make you budget better.
Take motorsport for example, damage, and running costs may increase, and that could apply to all sorts of activities, or a sponsor pulls out at the last minute. So the budget that you have is now in question. You’ve definitely got to put money aside for things that may change during the year, whether they’d be opportunities or the negatives.
Kym: Should you include your running costs in a sponsorship proposal?
Frank: To me they’re not really relevant. I would not put the running costs in the sponsorship proposal. I don’t want to know exactly how much money it’s costing you to run your program for the twelve months, because nine times out of ten it’s going to be very similar to the budget you’re going to be asking me for at the back page as a sponsorship investment.
It can just put you in a bad state of mind when you’re reading it. Concentrate on value for the sponsor. The whole point of the proposal is trying to do that first impression, like on a job resume, like the cover letter on a job resume; really trying and get the person’s attention, get them interested and excited about the program; doing things like that can just put a negative spin on things rather quickly.
Provide sponsors with investment options
Frank: I would definitely try and include the varied levels of investment, because for example, there’s a program here at the moment that I’m looking at which I wouldn’t invest in at the gold level but I’d definitely look at the silver. But there’s aspects of that I would want included. So then you go back to the project manager and go, “Yes, we’re interested but I like XYZ,” and that just starts a bit of negotiation. It doesn’t have to be set in stone, but it just gives you an indication that for this amount of investment this is what I’m proposing.
Obviously that particular program manager would come back to me with an amended list, and there’d probably be an increased price which I’m aware of. So, I’d try to include a couple of different levels. I know from a big business, there’s nothing more insulting than when you have a proposal and all they offer you is the naming rights for sponsorship because they think you have a couple of million dollars in marketing budget that you can just spend on the program. So they don’t offer you any alternatives, it’s like either yes to that or nothing.
Kym: Can you take a different approach and ask a potential sponsor how much they’re looking to invest and then tailor a specific package for the sponsor? So rather than providing options based on a best guess, actually asking the sponsor for a budget, how much they are looking to invest?
Frank: You could, I know for example, Ford’s marketing agency, I get the impression that that’s how they engage clients. “Look, how much are you willing to spend to be involved in an NRL team or a television advertisements?” and they all put together packages based on that spend.
Personally, and I can only base it on my experience, I would presume that this approach would work better with national programs like major sporting teams and television and radio. I don’t know if that would really work with smaller programs.
Five common mistakes sponsorship seekers make
Kym: In your opinion Frank, what are five common mistakes sponsorship seekers make?
- Failure to understand the company that you’re negotiating with
- Failure to understand their business structure
- Failure to understand their customer base
- Not being flexible with the proposal to meet the sponsor’s requirements
- Not being prepared to negotiate the deal
Kym: On that last point, you should expect to negotiate the details of the sponsorship proposal?
Frank: Yeah, because it’s got to be incorporated into our marketing program. In my experience it’s never been successful to have five or six different marketing programs running completely separate and isolated from each other. So to be a successful in creating demand you’ve got to address your marketing mix; your product and your position, your price and your place.
So all marketing has to be consistent and integrated and leveraged together. In my personal opinion, that has been one of the reasons why the brands I’ve worked with have been successful, because we’ve been able to generate that consistency, and having all the programs working together and in the one cohesive program is the key to the success.
If I have a proposal that was either just a cold call or someone’s actually approached me and organised a meeting, they’ll present, and this would be the same whether it’d be a V8 Supercar team or a high school Netball team. They’ll give me a proposal and I’ll go through it, I’ll put it up against my marketing program, see what I like, what I don’t like, how to integrate it, what opportunities there are, and I’ll go back to them with a yes or no, and if it’s a yes, it’s a, “Yes, but I would like XYZ,” then they go away and have a think about it and say alright, yes we can do that or no we can’t. So it’s a negotiation, it’s like buying a house; they’ve made the offer and I’ll reply, it’s a to and fro.
Three golden rules for a successful sponsorship proposal
- Be flexible
- Provide options
- Concentrate on the return on investment for the sponsor
I’ll just throw one more. If you’re going to email it, send it as a locked PDF. The easiest most accessible format that everybody has is Adobe Acrobat. So you just save it as a PDF if you’re going to email it.
Kym: What’s your position on receiving lumpy mail which is sending you a printed copy with something to grab your attention inside an envelope as compared to receiving an email? Do you have a preference?
Frank: Me personally, even if I do get it in an email I print it. I like to scribble on it and make notes. So it doesn’t bother me either way. I suppose with a printed proposal, if for whatever reason they might’ve already allocated their marketing budget, with a printed version they’re more likely to put it into the cupboard and pull it out if something comes up during the course of the year , they’re likely to revisit it.
I know it’s expensive, but the biggest thing that I would like to see is product pictures and renderings using the company logo. The ability to provide examples of what your car would look like if it had the sponsors logo on it.
Even for someone that doesn’t necessarily understand marketing, or a managing director, that’s something that can jump out. It’s got the wow factor and they can see it rather than you having to explain it to them. I think that’s invaluable and I’ve included them in every proposal that I’ve done. It’s a little expensive but at the end of the day I think you’ve also got to spend a little money sometimes to make yourself look a little bit more professional and increase your chances of generating that relationship.
Well that concludes part 2 of my interview with Frank Pudarich of Octane Garage.
Read part 1 of my interview with Frank Pudarich.