Sponsorship Proposals

If you’ve done the hard work of prospecting and soliciting sponsors, and got some of your prospects to engage with you, you may be forgiven in thinking your job is done.

Actually, that’s where the real work begins - understanding your sponsor’s needs and closing the deal with a sponsorship proposal that hits all the right notes.

So, how do you get into your sponsor’s head? How do you put together a sponsorship proposal that clicks with them, while maximizing the value you get out of a potential deal? And how do you gather clues on what a sponsor might be willing to pay, before you actually submit your proposal to them?

That’s what we’ll be discussing today with returning guest, Green Cactus CEO, Teresa Stas. It’s a pleasure to have Teresa back on the podcast after our very popular chat back in episode 40 last September on finding and approaching sponsors, and today we’re taking the next step on the sponsorship sales journey to look at the challenges and secrets behind researching, preparing and delivering a winning sponsorship proposal. 

Among other things, we’re going to be looking at the all important discovery session, where you get to spend time understanding the sponsor’s needs before submitting your proposal, as well as some very useful tips on efficiently drafting customized proposals, and navigating the negotiations that hopefully will get to follow your proposal submission. 

In this episode:

• The importance of holding a discovery meeting with sponsors before sending out a proposal
• Preparing for your sponsor discovery meeting
• What questions to ask during the discovery meeting
• Getting a feel for a sponsor's budget expectations 
• Easily customizing sponsorship proposals 
• The layout of a comprehensive sponsorship proposal
• Dealing with sponsor radio silence and/or rejection
• Negotiating sponsorship fees
• Drafting a robust sponsorship agreement
• Using sponsorship brokers

Thanks to RunSignup for supporting quality content for race directors by sponsoring this episode. More than 28,000 in-person, virtual, and hybrid events use RunSignup's free and integrated solution to save time, grow their events, and raise more. If you'd like to learn more about RunSignup's all-in-one technology solution for endurance and fundraising events visit runsignup.com.

You can find more resources on anything and everything related to race directing on our website RaceDirectorsHQ.com.

You can also share your questions about sponsorship proposals or anything else in our Facebook group, Race Directors Hub.

Transcript

Panos: 0:07

Hi! Welcome to Head Start, the podcast for race directors and the business of putting on races. If you've done the hard work of prospecting and soliciting sponsors, and got some of your prospects to engage with you, you may be forgiven in thinking your job is done. Well, actually, that's where the real work begins - understanding your sponsor's needs and closing the deal with a sponsorship proposal that hits all the right notes. So, how do you get into your sponsor's head? How do you put together a sponsorship proposal that clicks with them, while maximising the value you get out of a potential deal? And how do you gather clues on what a sponsor might be willing to pay, before you actually submit your proposal? That's what we'll be discussing today with returning guest, Green Cactus CEO, Teresa Stas. It's a pleasure to have Teresa back on the podcast after our very popular chat back in episode 40 last September on finding and approaching sponsors, and today we're taking the next step on the sponsorship sales journey to look at the challenges and secrets behind researching, preparing and delivering a winning sponsorship proposal. Among other things, we're going to be looking at the all important discovery session, where you get to spend time understanding the sponsor's needs before submitting a proposal, as well as some very useful tips on efficiently drafting customised proposals, and navigating the negotiation that hopefully will get to follow your proposal submission. So, if you're at that stage in your sponsorship discussions where you need to submit a sponsorship proposal, or you feel your game might be falling short in that department, stick around for an episode packed with tips and practical advice from our resident sponsorship pro! Now, before we get into all that, I'd like to give a quick shout out to our amazing podcast sponsor, RunSignup, race directors' favourite all-in-one technology solution for endurance and fundraising events. More than 28,000 in-person, virtual, and hybrid events use RunSignup's free and integrated solution to save time, grow their events, and raise more. And we'll be hearing a bit more from this great company a little later in the podcast. But, now, let's dive into our discussion on sponsorship proposals with Green Cactus CEO, Teresa Stas. Teresa, welcome back to the podcast.

Teresa: 2:31

Oh, thank you very much for having me.

Panos: 2:33

Thank you for taking the time to join me again on the podcast. I really appreciate it. How have you been?

Teresa: 2:38

We've been great, super busy, but having a great time. And I say "we" like the royal"we". But I've felt very lucky because, after the last podcast, you've had several listeners reach out and say hello and ask questions, and it's been great.

Panos: 2:52

Well, it was an awesome episode. We're going to be touching on that in a sec about what we went through there because I think it's going to be a great introduction for what we discussed today. Before that, tell me how things are going with Hood to Coast. I think you were telling me it's just around the corner - the event.

Teresa: 3:08

Yes, Hood to Coast is just around the corner and it's bigger and better than ever. So, we're very excited to see how that's gonna develop. And they've also had a lot of the different races too - the spin off races. So, really excited for that one happening in August.

Panos: 3:24

I mean, we should remind people who are not aware of this Hood to Coast in the Pacific Northwest. It's the biggest relay in the world. It's quite an amazing event and I think they've spun it off -- right? I think they're doing--

Teresa: 3:36

Yes, it's been franchised out now. It's international too. There's several different versions of it all over the world. So it's very exciting. It has a waiting list of 30,000 people, just to give you a perspective. They actually have to do a lottery ticket to be able to pick those who get to run it. So it's a really exciting event.

Panos: 3:55

And sponsorship-wise, I wonder, because you work with those guys for quite a while, is there anything kind of new going on for 2023 or is it bread and butter stuff, same stuff as last year kind of thing?

Teresa: 4:08

There's always something new with that event. And I think with a lot of our events, there's always some new innovations, different ways of doing things. I think the biggest trend that we see with that event as well as just overall in general is more of the cause marketing, having brands that align with the cause of the event or, like, in this case, the race. Cancer research is really important to them, so a lot of the brands are aligned with that or have some way of helping raise funds for that. So, cause marketing has been a really big trend for the last couple of years that I've seen events lean into.

Panos: 4:46

And for a large event of that size and prestige, do you guys get non-endemic sponsors apart from the usual running stuff and this and that? Like, do you get any banks or any kind of insurance companies?

Teresa: 5:01

Yes, absolutely. Well, I mean, one of the big sponsors for this year for Hood to Coast is First Tech Credit Union, which is a credit union. Then, there's also, like-- we just partnered up with UBCO, which is this amazing electric-- it's like an electric motorcycle. So, a lot of people wouldn't think of it as necessarily something you would apply to a race because it's this bike - basically a motorcycle - but it works out great because the staff use it actually to set up the track and the trails that because it's 200 miles - this race is - so it's hard to set those kinds of things up using cars all the time. And that audience tends to want to do adventure in all aspects, so that's something that's a great fit that is just coming in. So we see a lot of different things and understanding your audience, like I always say, is the way to find out if it's a good fit. And sometimes, it doesn't seem like something you would be, like, automatically associate with the group, but we found that, yes, you can get all kinds of sponsors, especially for events like this.

Panos: 6:13

Indeed, understanding your audience, your first pillar, that we touched on the previous episode. So the previous episode, when you last came on, was - I just checked - back in September of last year 2022, if people want to look that up. But for those of us who are joining us on this episode for the first time, do you want to maybe remind us all what you do and what Green Cactus does, and all of that stuff?

Teresa: 6:38

Yes, of course. So a lot of people in the industry know me because I'm the author of the book, "Sell your event." It's the easy-to-follow guide, practical guide to getting sponsors. We also have a workbook that comes along with it. I'm the CEO of the live event sponsorship agency called Green Cactus and we are basically everything an event would need for sponsorships, when it comes to the live event world. We do races and things, but we don't do pro sports, and there's a lot of that too. I mean, it's either pro sports or you're on your own. So we focus on midsize and large events. And we're brokers - and we can talk a little bit more about what that does or how that works. We also help manage sponsorships on site at large events as well. And then, I'm a national speaker and I go around and teach people about sponsorships, and how to get the most out of those for their different live events. And so, we handle live events from all over from, like-- music festivals are our specialty, but we do have, like I said, Hood to Coast and their race series as well. So we are familiar with that market too.

Panos: 7:58

Indeed. And I have to say, as we were discussing also before we came on air, that the last episode we did was super popular with people. You said people were reaching out to us saying thanks--

Teresa: 8:10

Yeah, it was nice.

Panos: 8:11

--for a few things. Yeah. And I also got lots of comments about how helpful it was. It was, like, really great practical advice - hopefully, very similar to what today's episode is going to be.

Teresa: 8:21

Yeah.

Panos: 8:21

So it's great to have you back. You take a very methodical approach to the sponsorship process, which is also reflected in your book. So you break it down in steps. Because we're going to be sort of, like, picking up where we left off on the previous episode in terms of the process, I just wanted to remind people what we discussed in our previous chat, so people can perhaps go back and listen to that. I would actually strongly advise that, if they haven't. So, the very first step of your approach which we sort of touched on a minute ago is understanding your audience, and we spoke quite a lot about that. Basically, what information you need to know about your audience and how to obtain that. So you build, like, a good understanding of who it is that you can bring to the table. And then, it's building an introduction deck, and this is something that you see some people-- like, it's sort of in some people's process and not in others. I think it's a great idea. This introduction deck, as we discussed in the last episode, is not quite a sponsorship proposal. In fact, it's very different to a sponsorship proposal, although some bits of it may go into the sponsorship proposal, right? It's more of a kind of, like, general brochure, like, "This is my event. This is my audience. This is kind of the assets." Right? A little bit "about us" kind of kind of deck. Lots of nice photos in there, particularly for races. That's what we mentioned last time round, right?

Teresa: 9:47

Yeah.

Panos: 9:48

And then we also spoke about prospecting, which is, I think, one of the toughest bits of the whole sponsorship process, which is how to research suitable sponsors, whom to approach, and all other kinds of stuff.

Teresa: 10:06

Correct.

Panos: 10:07

And then, where we sort of wrapped up, which is a great place now to pick up from, was making that first approach, which is also quite important. And you have some great examples, both in your book and your workbook that I remember reading on, about cold-calling scripts and cold-emailing scripts and all of that stuff, because I know people are-- I know I would be quite terrified of cold calling in general, let alone sponsors where people are even more reluctant to reach out. So it's a really important question. And actually, not only what to say in that first approach, but also finding the right contact, which is another hurdle that people sort of, like, stumble over, right? Like, whom do I reach out to? What does the role say? How do I know who to contact? So for anyone who hasn't listened to that episode, I strongly advise going back to it and going through all of these areas. So now, we're going to be picking up from there. So, essentially, we've picked up the phone, we've sent our cold email, right?

Teresa: 11:13

Correct.

Panos: 11:14

We haven't got the door shut in our face, quite. So we have one foot through the door. People are sort of interested. And now we want to move into getting more details from the sponsor in order to reach the point where we can actually put a proposal to them. So I'd really be keen to hear from you- because I know this is a step that some people would be tempted to try and get around - why having this discovery session is that important?

Teresa: 11:48

Yeah, so a lot of people tend to create their proposal and then they just mass email it out to a whole bunch of people, or they mass email out their levels to a whole bunch of their prospect lists that they put together, and they don't actually engage or have a conversation prior to. And I think the thing that people need to realise is that, yes, you can definitely create all these packages or these levels and send them out to everyone as a group and, maybe, if you send out 100, you might get five that buy into it. But the thing is that you, at this point, have now told-- when you do this, you're telling that person on the other end that you do not care what they need, or what their goals are, or what they're trying to achieve from their investment, because this is not a donation, and we have to make that distinction very clear, especially in races. A lot of times in the race world, there's some sort of nonprofit tied to this. But when you're asking for sponsorships or asking for them to make a marketing investment in your event, you're not asking them to just donate. So, when you're doing any kind of marketing or any kind of brand or company is doing marketing, they are trying to understand what their goal is and what they're trying to achieve out of that. And when you just send off a proposal or a three-pager with a bunch of levels on it, what you're saying is, "You have to fit your goal into one of these packages." And what happens is, a lot of times, they look at the four options and they say,"Well, that one, I don't want to spend that kind of money. I don't need a whole bunch of logos on stuff." Or maybe their goal is completely different and they need some sort of space or whatever. And so, instead of going back and trying to talk to you about a different options or things like that, they just shut it and move on to the next one because you're not engaging or trying to find out how you can help them, because it is a partnership in some regards, because you're trying to help them to reach a certain marketing goal. And all marketing goals are different. Like, for instance, Red Bull. Red Bull can be a part of a lot of different races or adventure activities, things like that. Red Bull doesn't like their logo on stuff. So, if you send them a proposal with a bunch of stuff that has to do with logos, they're most likely going to say no because that is not a priority for them, nor do they really like it. They don't like to be in what they call a logo soup. So there are different goals for different brands and if you don't take the time to find out what it is that they like to do, then you are immediately shutting the door for them 90% of the time. The other time is the discovery call allows you to find out what things they can do, what things have been worked out for them. It gives you a chance to get an understanding and you might end up getting more money than you thought you would get because that's the other thing is. We don't ever get any large dollar amounts sold because of levels - never. We'll always get more because we actually have a conversation with them and we tailor it to them, if that makes sense.

Panos: 15:30

And I think there's also a kind of, like, human principle involved in all this. People use this kind of example, also in the context of any kind of negotiation, which is invested time by both parties. It's part of getting to a deal. I mean, when both parties engage time in it, they feel more invested in something when they start down that road.

Teresa: 15:53

Yeah, absolutely. And the thing is you know too if they're willing to spend the time and take the time to make the call, then there is a real interest there, which is why we do what we call-- I mean, a lot of people just call it a deck. I identify it as an introduction deck because I want to make it clear that you don't put prices or create a proposal or do packages in this deck. It gives them a chance to understand what they're looking at and a chance to engage with you in ways that they can be a part of your event in a successful way, and then it helps you put something together where they will be successful. Because if you're just trying to cram them into a box or into a level, then it may not create success for them. And if it created success for them, then they will continue to stay with you and you won't be reselling everything every single year. And that's the other part of it.

Panos: 16:42

And in your opinion, what is the best way to get a sponsor that I've got on the phone or chatting over email to actually spend the time with me on a discovery call or on a follow-up session to actually go through all of these questions? How do I get them to agree to that?

Teresa: 17:00

So what we have discovered in years and what I've learned too as well is that if your event is a good fit, or if the brand is interested in looking at your event, which is why you do the introduction deck, a lot of times, they are willing to spend the time. The thing I would make very clear is that you want to make it short. I would not spend more than-- aim to try and take only about 15 minutes. If they're engaging with you, the conversation might end up at 30 minutes, but it shouldn't really be more than that, and have a good understanding of what you're trying to achieve from them. Those that are interested in your event and are willing to take most of the time, they will be willing to take the time. It's the ones who don't respond to you or who won't take your calls, or like, "We were really busy. We don't have time for this," I'm gonna be honest with you, they're probably not really interested. Because if they are, then they are 90% of the time willing to take the time. Sometimes, we can send it to them in an email but, a lot of times, it's a really quick phone call. They tell you what they're interested in, what they like, what they don't like, and that kind of thing. And I have some questions, you can ask them to kind of get yourself in that conversation. But if they're not willing to spend the 10 or 15 minutes, they're probably not interested in your event to be honest, to begin with.

Panos: 18:25

Sponsors sometimes drop the ball as much as rights holders, right?

Teresa: 18:29

Oh, yes.

Panos: 18:30

Could it be I'm talking to someone, perhaps, who doesn't understand the etiquette or doesn't understand the value of a discovery session themselves, and they're all like, "Yeah, just send me what you got" kind of thing? Or is that the only way to interpret that they're not interested or they want to just dismiss you?

Teresa: 18:46

No. You bring up a good point. What we find is that ones that tend to really push to get-- "Send me your options or just send me what you have and we'll look over it" or whatever, those that tend to really push that are either (A) not interested, (B) they tend to be more local sponsors, more localised because they do not deal with this kind of ask on a regular basis, or they do and it's all for the same size kind of event. That's where they've always done it. They don't really know. They're what we call community sponsors. They're gonna pick anywhere from-- they're willing to spend $500 or$1,000, maybe, but they're not going to invest large dollars, those kinds of things. So yes, you could potentially have those. We do have them every once in awhile that are really pushy, like, "We don't care. Just send us something." When that happens, sometimes we'll send maybe a couple of options that we've thought they might be a good fit for, and we'll send those over, but I would tell you, 90% of the time when that is the case, they don't buy it. But you can definitely do that or you can say, "Here's some options that we've kind of put together that we thought you might-- but we're taking a stab in the dark. So please feel free to chat with us about it. Or we can tailor it to fit your needs." And every once in a while, they'll look at something and be like, "Okay, that's kind of cool. That's sort of interesting. Can we adjust this or can we adjust this?" But I think it means that you really need to understand what that brand is to the best of your ability and come up with something that what you think would be a good fit for them. So, that's kind of the thought I would have with that. But in our experience, a lot of times, if they're not willing to spend the 10 or 15 minutes on a call-- and you could just say, "I just want to take 10 or 15 minutes so we can find out the best ways that we can work together or the best ways we can partner together, or what's a good fit for your brand, or what are your goals, or what are you guys trying to get out of your sponsorships." That's kind of how we start with it. So that's sort of my rule of thumb. But yes, we do get people who really do push back and they're like, "Please, just send us something or give us a couple of options, and we will-- we don't ignore it." I know some sponsorship people are like, "If you're not willing to spend the 10 minutes or 15 minutes, it's probably not a good fit and then they don't do it at all. We'll always kind of take a stab at the dark on it. But if we're not getting engagement at all, then we don't waste our time putting it out there.

Panos: 21:34

Okay, crystal clear. And in terms of the questions you would ask the sponsor during that meeting and sort of the objectives of the whole thing, what should you be thinking about?

Teresa: 21:47

Yeah, so a couple of things I always recommend to people is, first of all, make sure you understand the brand and what it is or what it does, or what it's trying to fulfil as far as the need that the brand is trying to fulfil. So you don't have to go in with a tonne of research. I know there's some sponsorship people who understand all their marketing and things like that. I have found that, a lot of times, what may be publicly considered their marketing plan is not always internally what they're aiming for, moving forward. So I try not to come in with too much expectation of what I would get out of them because, that way, I can hear what they're trying to say. So the main questions I always try to ask is, "What are your sponsorship goals? What do you hope to achieve from sponsoring our event?" So you want to understand what the goal is and what they're trying to achieve? Are they trying to get leads? Are they trying to get data? Are they trying to get awareness? Are they trying to entertain guests? I mean, what is it that they're trying to do while sponsoring? Because they are all very different. So if you're trying to get data and leave-- let's say, a big common one is, collecting sales leads or something like that. Let's say it's a car dealer and they want you to collect people's information who might be interested in buying a car, then it doesn't necessarily mean that their logo needs to be on everything. So you want to tailor that kind of stuff. The next thing is, can you share an example of a past sponsorship that you consider successful? So what has worked in the past and what hasn't worked in the past? Understanding the kind of things that they've done before and things that have worked for them versus things that haven't worked for them will help save you time, so that you're not trying to recreate the wheel every time. They say, "I did a contest and it worked really well for us." Well, then maybe you create a contest. If they say, "I did a contest and it was terrible, and we hated the experience," then you know to eliminate that out of your proposal. The next one I say is how will you measure the success of this sponsorship because that's a big hiccup that a lot of events don't realise. An example of that is, like, if I said, "I'm going to give you 100 coupons to put inside your race bags." And then you are so excited because you're like, "Oh my gosh, we actually gave out 400 coupons when we were only going to do 100." 400 of them went out and you're like, "Oh, this is great. This is a success." So you're happy with it. But then, what happens is-- let's say that they were measuring it by how many people actually went into the restaurant with those coupons. And let's say, they only got 10 people or something. So 10% or whatever. So for you, you might have thought, "Oh, we distributed 400 coupons. That's a success." And for the brand, they might have said, "Well, we only had 10 coupons redeemed, so that's a fail." So if you knew at the beginning, that the way they're going to measure it is how many coupons have been redeemed, then you can be more strategic in the way you issue those. So maybe you're doing, like, a pre-party at the restaurant to get more people to use the coupons or, maybe, it's-- so you can come up with ways to actually target what the actual measurement tool is, versus just assuming that that's how they're going to measure it. The next question is, is there anything from the asset list or is there any sort of things that you like to have in your sponsorships? What are important to you? Are tickets important to you? Are activation spaces important to you? What are things that you will really want to see in your proposal? Because we'll get a lot of sponsors who don't really care about their logos being on everything. I mean, that, honestly, is probably the biggest one. Or we do a lot of music festivals, like I said, and we have a lot of big brands. People assume that, oh, by giving us a stack of tickets, that's considered a sponsorship, but most of our national brands could care less about the tickets. So valuing those tickets inside of your package is not of importance to them. So understanding what's important to them is another thing. And then the last one I'll always ask too is, when do you expect to see the proposal by? What you want to do is after you have that call with them, you repeat back what you heard. Like, "What I'm hearing from you is that logos aren't important, tickets are important. You'd like to see your name on a race bib and you want to do a contest to capture leads." Then they'll say, "Yes, that works for you?" And you say, "Okay, if I can get the proposal to you by next week, does that work for you?" And sometimes, they'll say,"Well, if I had it by Friday, that'd be better because I'm going into this meeting," or they'll say, "Oh, yeah, we got plenty of time. You can get it to us next month." That gives you sort of a point of how important it is. So those are my main questions when it comes to that. You can also ask about budget if you wanted to, as well.

Panos: 27:15

Yeah, I think that's a great point - again, a more general point about lots of things - which is summarising back what you think you understood to the person giving you the information, right? It's so easy. And by definition, it's something you don't pick up on to misunderstand something, or you think that you understood something, but not exactly in the right way. So basically, as you say, saying some stuff back to the sponsor, "I'm hearing this and this is what I understood," it's really important to, sort of, avoid misunderstanding down the line. Budgets, you mentioned, obviously, a very sensitive topic when you're preparing a sponsorship proposal. It's almost like asking the other party to strip bare or something, right?

Teresa: 27:55

Yes, exactly.

Panos: 27:57

Is that something you would advise doing during the discovery session - basically, prodding, I guess, like, general budgetary type tolerances from the sponsor?

Teresa: 28:07

Yeah, I know that if you're not used to doing it, this can be an awkward question or you're not quite sure how to bring it up, and the way that I handle it-- the biggest reason why I asked about budgets is not so that I can tap out someone's budget or come up with the biggest sponsorship that's going to take all the money or something like that. Because your pricing should be pretty much a pricing. You should already have that kind of established. But the reason why I do it is because I have learned the hard way, in my many years of doing this, that there's, oftentimes-- especially when you're dealing with a brand or a sponsor that is newer, that you haven't worked with very often, there's oftentimes this sort of breakdown where you may be talking about a sponsorship after talking to them, and you're maybe suggesting ideas or you've got some stuff going on, and you're in your head, and you're thinking oh great, this sponsorships going to be, let's say, $20,000. And in their head, they think the sponsorship is going to be $2,000. And when you go back and you pitch something like that and you have a disparity that disparages against those two right there, it's very hard to come back, it's really hard to bridge that gap between 2,000 and 20,000. So, when you're so far off, majority of the time, they'll just not take it at all. So for me, having an understanding of what they're thinking versus what I'm thinking helps save you time all around. So we have several events that have minimums when it comes to sponsorships. Like, a majority of our events, we don't even start at sponsorships-- the minimum is $5,000. That's very common for a lot of the events we do. And we'll sometimes get new brands. And as I'm talking to them, I'm like, "Oh my god, they love all the things we're coming up with," and then I'll realise, "Oh, they think that this is going to be, like, a$3,000 or $4,000 sponsorship," and we don't even start at that. So I don't want to waste my time putting together a proposal, if they're not prepared to spend that kind of money, and I don't want to waste their time having to go through all of this and it'll not be the same. So what I try to do is, when you get better at it, the more you do it, the better you're gonna get, but when you get better at it, what I like to do sometimes is I'll listen to everything, what they're kind of saying, and sometimes I can kind of talk off the top of my head and say,"Okay, what we've discussed right here, that's probably going to fall somewhere between$5,000 and $10,000. Does that sound reasonable to you?" And if you do it like that, that a lot of times, they'll say, "Oh, yeah, that should work." And if they say, "Oh, yeah, that should work," and they don't really blink much about it, then you know that you could maybe go up some or maybe give them a couple of options that are a little more expensive. If they're like,"Oh, no, no, no, that's too much money. We're really--" It's kind of funny because, a lot of times you say, "Do you have a budget and you would like me to work within?" That's the other nice thing when you're doing it customised. You can do it as a favour to them. Is there a budget you'd like me to work with? And sometimes, they think you're going to take whatever they give you and you're going to spend all of it. And let's be honest, a lot of salespeople, that's what we're going to do. I mean, if I hear a budget, then I'm like, "Well, maybe I'll give them an option that goes up that high." So when you do it that way, when you say, "Is there a budget want me to stay within?" And sometimes they're like,"Well, we just want to see what you put together," then that's when I'll go into, "Well, what we're talking about kind of sounds like a $5,000 to $10,000, or it sounds like a $20,000 to$30,000." And then if they say,"Oh no, that's too high," then you have a better understanding of what you're working with. And a lot of times, funnily enough, when that conversation starts like that, then they'll tend to say, "Well, I kind of want to say something under $5,000." At that point, then they start to tend to give you a budget to stay with them. And then, if they say, "Oh, no, that sounds great, or that's perfect," then you kind of know that you have a little leeway. So I really do suggest asking that question. I know, it's an awkward question. And if you do it more as a just,"I'm trying to help you out. Let me know so I can keep within your budget." As you're trying to help, make sure that you're creating a proposal that is beneficial to them so that they can get what they need - their goals - within their budget, then that is very helpful. If you decide you don't want to do a sponsorship that's $1,000 or$2,000, maybe it's too much work or something like that, then you can say, "Oh, I get that. Unfortunately, a lot of our sponsorships start around the$4,000 mark, around the $5,000 mark," then it can help you eliminate the time that is going to waste if you are like, "I'm not going to spend my time on a bunch of $500 sponsorships." Then, at that point, you can step away and, now, you haven't wasted your time sending it off, you haven't wasted time developing a proposal, that kind of thing. But it is a skill set that you have to keep practising to make it natural so that you don't feel like you're asking-- but the majority of those people are fine with it, and nobody is going to take it-- they'll just tell you straight out if they have a budget or they don't have a budget, or they just want to see what you have to put together. So I think that's the biggest key is it just helps save time and also make sure that your proposal is going to fit within something they can actually do.

Panos: 33:47

I think that makes sense. And it goes back to the whole point about - that we discussed earlier about - even asking the sponsor for some time to go into the discovery call to begin with, which is this is all expected in kind of, like, in sponsorship negotiations, right? I mean, a professional, on the other end, would take this in a nice way because, presumably, they've been there before, they've been asked that question before, and they understand where you're coming from, right?

Teresa: 34:13

Yes.

Panos: 34:14

When you get weird reactions, it's almost, like, a sign, as we were saying earlier about, like, asking for a call that you're probably have someone on the other end who may be a little bit more junior or not very familiar with this stuff.

Teresa: 34:27

Yes. Yes. This is all very common, very common. Yes.

Panos: 34:31

So you've got all that information, which is super valuable. And one more thing, actually, I would say, in defence of the whole discovery call - and most race directors would appreciate this - is that even getting to the stage is already such a rare occurrence that you just wouldn't want to waste the chance to go on a discovery call, right? I mean, how many shots of this you're gonna get? So if you've gone this far, you may as well just take the time and do things properly. Moving then on to the sponsorship proposal, again, you've cleared quite a few hurdles, you definitely don't want to be sending out, like, a generic tear packages type thing with no personalization whatsoever to the sponsors goals, right?

Teresa: 35:21

Right, absolutely. So once you have the information, then the goal here is to create a proposal that is tailored to the information that they have told you. So that's why you're repeating it back. That is going to aim to achieve their goals. And so that's the biggest thing about this proposal. Now, when I tell people that I do custom proposals, that our agency only does custom proposals, they think that every single proposal is started from scratch and that we build it out every time, and that is not the case. So we do have, like, an asset, a detailed inventory of our assets, and we do this with all of our properties. And we do have pricing for them. And we do have certain sponsorships that we're trying to sell. A lot of times, we'll have different categories that we're focusing on, like a music festival just for general. But we'll have, like, "Okay, we know we want to do a stage sponsor. Maybe we want to do a bar sponsor. Maybe we have a silent disco or something we're going to brand, or we want to make sure our parking lot is maybe sponsored - free parking by Lexus - or something like that." So we'll have different ideas of different areas that are important to the property that we are trying to pitch. So I'm a big fan of real estate. So when I do sponsorships, I tend to tie them into some different types of real estate on a foreign event. So maybe it's a bib sponsor or maybe you're doing race pack sponsors. You can have different categories of what you're trying to aim for. And we do what we call asset sheets, and we develop out what those look like. So, here's the stage sponsor. If we're going to do a stage sponsor, then this are the things that we are going to get or these are the things we can offer them - not necessarily that they have to take them all, but this is what we're going to offer them. Having these kinds of things kind of pre-prepared, which are similar to having your levels on the back end is fine. But then, you're going to go and you're going to pull those pieces and put them into this proposal, so they fit what they said. Because like I said, let's say you're talking to Red Bull, and they're like, "We want to do a sampling activation or we want our team to be able to give out Red Bulls as people are running or whatever." Then, that way you're making it clear to what they're trying to achieve and you're taking out the parts that they don't want like the logo placement on the T-shirts or logos on the bibs or whatever you would put in your regular levels. You take that stuff out. Don't give them stuff just for the sake of giving it to them. You want to make them tailored. That way, you're also making the people who do want logos on stuff, you're making that more valuable to them because you're not putting 25 logos on the back of a T-shirt. You're making it more valuable to the people who really do want that kind of thing. So tailoring it actually helps everybody involved not just that brand, but also all your other brands too because you're not just throwing stuff on it to make it seem like it's a value.

Panos: 38:39

Yeah. And I guess sending someone a ready off-the-shelf proposal after you've had the meeting with them is doubly criminal, right? Because it says, "I spent 10 minutes with you, and I just still sent you that generic thing." Right? I mean, that's even more criminal.

Teresa: 38:55

Yeah. And we've had calls where we listen to them, and then it's like, "Oh, well, this pre package that we already have actually fits for them." So we pull it out, and we'll put it in there, but it doesn't look general generic. It's not like,"Okay, we've just talked to you. Now, here's a list of my bronze, my gold, silver bronze options. Pick one of those." It's not like that. It's like, "Here's yours. We'll do option A, option B," kind of based on what they say. I always, in my proposals, do three options, normally, unless it's very specific what they're looking for. If there's something very specific, then we'll do it that way. But I tried to do three options. I try to keep them somewhat within their budget. Maybe, it's the very basic bottom of the budget. Then it's mid-level, which is pretty much usually what they'll end up taking. And then maybe something that we think is a good fit that maybe we didn't necessarily discuss it with them, but we thought, "These are a couple of things they're looking for. So maybe we'll give them-- maybe a stage sponsorship is worth looking at." And the reason why we do options too is very interesting. There's a book- I think I brought it up in the last podcast - called The Science of Selling, and there's been a lot of behaviour science that is tied to how people make decisions. And a lot of times, if you give them three options, then they tend to choose one. If you give them one option and they don't like it, then they just tap out. They're not a part of it. And sometimes, with the two, I always give an option, always. I mean, I would always choose two because, with the research and everything, it seems to be that the choices are usually made when there's three. So if you have two, that's fine, but then they sort of your brain picks itself on which is the better one but, for some reason, when it's three, they it feels like it's making a better decision. It's kind of an interesting thought. So we always have to do three but I always give them some options just so they can kind of see different ideas or different ways that they can incorporate their brand into our events.

Panos: 41:03

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Teresa: 42:54

So if you had listened to the first podcast, we talked a little bit about the introduction deck - what I call an introduction deck. A lot of people just call it a deck. So you would want to put the pieces that are in there. So we always want to do a cover. When you're doing that, make sure you're putting your contact information clearly on there. Your event, the date, all of that is on the cover. But your information is key because, a lot of times, those proposals are going to get separated from your email. They're going to get printed off, they're going to get passed around. So you want to make sure that no matter where they're at, they can just look down and get your number or email address. So then you'll want to make sure you have all of what I call the sort of information they need to know - all your basic stuff. First you'll have your "about us", little quick briefing. It's maybe a paragraph about the event, how long it's been around, and that kind of thing. And then you'll want to make sure you include all of sort of your stats of-- like, if you are raising money for an event-- I mean for a nonprofit that, you'll want to put, like, how much you've raised or maybe a little bit about the nonprofit I would put a whole paragraph - I wouldn't put a whole page or anything about that - how many people attend, how much it costs to participate, how you sign up, how you participate, and the kind of the general information you would find on a website about your event, but you just don't want them to separate and have to go searching for that information. Then, you may want to put in some general need-to-know info like, if you have a concert, perhaps you're going to put your lineup and things like that. If it's a race, you're gonna put maybe some interesting information about it or you don't include anything, that's fine too. Then, you'll want to make sure you have your demographics in it - as I always say, about your audience, what do you know about them, that kind of thing. And then after that, you're going to put in your proposal, and the way that I always suggest doing that is you do a page or two, depending on how many options are doing with clearly marked Option A, and then you clearly list what they're going to get. And if you have weird names for stock, because people do-- like, maybe they're calling it the-- maybe it's like the bullpen - because we have a festival that has that - or , like, well, what is it? If I don't know anything about your event, I'm like,"What is a bullpen? I don't know what that means." So you want to make sure you make it really clear what they are. And then if they have a weird name like that, explain a little bit what that is, maybe. And then you kind of list out overall what it is you're going to get with the price tag. Now, let's say, I say bullpen sponsorship and then I want to describe what that is and share pictures and things like that. So what I will do is just say, "See asset page for details." And then the asset page I connect underneath or behind it will be all about what that is. Like, the bullpen is a premier area right in front of the stage and it has opportunities for you to brand these fence lines or it includes this kind of stuff, and then with pictures. So that way, you have one page that sort of overviews what your proposal is all about and how much it costs. And then if you have special details about like what the bullpen is or what your T-shirt has, or sometimes, I'll do a T-shirt athletes page that has a T-shirt and shows, like, what the logos look like on it, or I'll show pictures of all the people running in those shirts or things like that, and then put some details on it. But you can add that to kind of flush out some of those bigger assets. You don't necessarily need to do it for every single thing on the line. Like, I don't need to put every single social post in the back of an asset sheet. But I can say, three social media posts - that's the other thing. You need to say numbers. You need to tell them how many. You can't say "Inclusion in social media posts." That's worthless to most people. You need to tell them what they're going to get. So are they going to get a minimum of three social media posts? Things like that. Then that works. Is it going to be social media posts inclusions? Or is it going to be content that they provide? So is that three posts for sponsor-provided content or it's included in three posts promoting the event? So those kinds of things as distinctions make a difference, and also make a difference in pricing as well. So those are things to keep in mind. So then, once you kind of do the overall, sort of, this is what you're going to get for this price tag, and then you have your sort of your asset sheets and maybe describe some of those things. And of course, I just put another page at the end that iterates the contact information, how they can get a hold of us, and we go from there. So that's kind of what you should be looking for. And if people, I'll also give you a link for some resources where you can actually download, like, a guide that shows you how to do that kind of stuff.

Panos: 48:07

Awesome. So you mentioned there you have a kind of, like, summary page for the proposal. You list the stuff, almost like an appendix. You can elaborate on it a little bit. On that page, you mentioned showing a price for that proposal, right?

Teresa: 48:24

Yes, yeah.

Panos: 48:24

Are you breaking out individual--

Teresa: 48:28

No.

Panos: 48:29

So it's, like, one line item, $4,000, whatever. That's it?

Teresa: 48:34

Yes. I suggest having those prices on the back end, 100%. I would totally suggest doing that so that you know what your value to each of those assets are, and you can definitely-- for us, a lot of times what will happen is we will put those together. And I would say, 75% of the time, if I put all the assets together and added them up, they're actually more expensive than if we price them as a group. What I tend to find out is that if we itemise things like that, then people start to go through and mark out the pieces that they are willing to lose in order to drop the price.

Panos: 49:22

Like a shopping list?

Teresa: 49:23

Yes, exactly. And it isn't a shopping list because a lot of your pieces have to work together to achieve that goal. So you have to do it as a package that, as a whole, is what's going to help achieve the goal that you're after. If you start marking things out, it's like baking a cake. If I go through the list and I'm like,"The eggs are too expensive, the oils too expensive," then all of a sudden my cake crumbles. So you have to have all the ingredients to make that marketing plan work. And if you have things that you can just start removing and it's going to work fine, then you're probably not putting together the right kind of combination. So I highly suggest you just do it by price. This also helps you later when you need to negotiate because, right now, we're at a starting point.

Panos: 50:14

And in fact, like you said, yeah, I mean, I guess you do have to have those line items when you do your kind of, like, asset audit, right? Because you need to know when you put them together, unless it's finger in the air on how you're going to price the bundle, right? You need to know what each of those worth and to be able to defend it, as you say, if the sponsor comes back, and they're like,"Why $10,000 for all of these kinds of things?" You can have an argument for that. There's a question I had within this context of what you described, which is kind of, like, I think, what most people would be more familiar with when thinking of a sponsorship proposal. If I have a really cool off-the-charts"can't put into a single roll" type of initiative, I want to do something really, really special for the sponsor, and I want them to know that I'm sort of, like, going out of my way, I understand their objectives, and I have an awesome idea. How do I present that in there?

Teresa: 51:11

That can sometimes be challenging because, once you've stepped out of the sort of generic or the general, "These are the 20 pieces of things I can offer you that are very traditional to what you've always been doing," then when you want to create some sort of activation, we have a few events where we get-- the majority of the really large money comes from creating these activations or developing something just for them. So when you're dealing with things like that, trying to put together-- using pictures or narrative to kind of give a story of what it is you're trying to achieve will be helpful. So instead of just listing a bunch of stuff, for example, we started with this bank brand - it was a credit union brand for another music festival - and they were like,"We want to develop something that will encourage people to--" they were just coming into this market and they wanted to encourage people to sign up for their credit union or their bank. And we want to come up with a great way to do that. Well, how do you do that with a music festival? It's kind of a weird mix. Having them sponsor an ATM, that makes sense. Having them be on a stage, maybe, that makes sense. But how do you get people engaged and want to be a part of a bank while they're at a music festival? So we had to create this idea, and the idea we created was that we would do an area that was a specialty, sort of, viewing area, like a deck that their members could go in and watch the show and have a place to sit down. So we created this whole new zone for them that wasn't part of the festival, and that we had to describe and explain to them what we were trying to achieve out of it. And then, they would get what we call member perks. So maybe they get a 10% discount off of the tickets originally, and then maybe they get a chance to come into the zone. And then, maybe they can win upgrades, things like that. So coming up with that, we had to pretty much draw this picture of what was going to happen. So when we presented it, because we'd never done it before. I didn't have photos of it. So what I did was we looked at different sorts of VIP areas that we've seen at other events. We worked on the line, we came up with some ideas, we priced it all out, we figured out how much it was gonna cost to build it out, and we used photos to kind of showcase, "This is sort of what we're thinking," and then we wrote out the narrative like,"Be a part of the Chartway members zone. This will allow your members only to be able to enjoy the show." And we wrote it out so that it was kind of, I guess, sexy, and then also explained how it would work. And then we use photos to kind of showcase what our thoughts were- how we would plan it out. And doing that is what got them. They've now been doing that for-- we're in our fourth year now with that programme. So showcasing it like that can help do it because it can be somewhat difficult when you're trying to pitch an idea that sort of out there. The other thing I will do too is, if it's something like that's a little bit more complicated, I'll send it ahead and then say, "Here's the proposal. If you have some time, we can hop on a call and I can walk you through it or explain it to you." And a lot of times, when it's something like that, they will definitely spend the time to do it because once they read it, they're like, "Okay, this is quite interesting," and they have questions. And so they'll make the time to walk through it like that. And I always offer that to anybody. When we send a proposal, we always say, "If you have any questions, concerns, want to change anything, want to adjust anything, let us know. We can call and make adjustments. Or if you want more of something or less of something else, we can work through it."

Panos: 55:20

So let me try and translate that last bit, which I think is quite smart. In kind of, like, race terms, it's almost like getting a bank to sponsor, like, a physio tent at the finish line or something like that where you have, like, an HSBC or a Chase or someone, and they sponsor that and, basically, only their customers can go in there. Right? And they get involved in the event that way, which is quite interesting, actually. When you send out this sponsorship proposal, sort of what happens next? I guess it should take some time from the sponsor to get back to you. Are they supposed to tell you-- or is it a good sign if they told you immediately upon receipt of it that, "I'll get back to you in a couple of weeks?" Like, how do I handle radio silence? I've reached that point. I'm really eager. I think the sponsor likes this. I think they're engaged because we've been through the intro deck, the call, the discovery session, all of that stuff. And then, it all sort of, like, goes silent for two or three weeks.

Teresa: 56:24

That is the worst.

Panos: 56:26

Is that something that happens?

Teresa: 56:27

Yes, it does happen, and it happens to us, and we've been doing it for years. And we even have a lot of these agency relationships already. So a lot of times, it's like, you know the person on the other end, and they still aren't getting back to you, it can be frustrating. I will tell you that, I would say, probably 80%, once you have the discovery call, I would say the average is probably 80%, they get back to me. Now, it may not be the answer I wanted. It may be I know. But once I've had that engagement with them, the likelihood of them completely ignoring me from that point on, it goes down a lot. They tend to at least say, "Oh well, not this time." Because you'll find later too that a lot of the brands are represented by agencies who make these kinds of decisions for them or work with them. And so, they'll come back and say, "This isn't gonna work for this year," that kind of thing. So you'll hear back, especially if you use a discovery call. It is more likely that you will hear back from them if you've had a discovery call versus when you have that. But if it happens, we continue to follow up. So you just say, "Hey, Suzy. Checking in on that proposal I sent last week. Wanted to see if you had any feedback." Suzy doesn't get back to you for another week or two. Email again, "Hi, Suzy, just checking in one more time. I know you guys must be busy. Just curious if you have any interest in this." Nothing back. I would do it again. I mean, if we've done a discovery call and we reached out four to five times afterwards, we still don't hear anything, then we will sometimes write it off. But in the same book, the "Science of Selling" book that I was talking about, it usually takes seven touch points before people will buy in. So we've had cases where we have totally written something off, and then they come back and say, "Sorry, it took so long. I was trying to get this approved," or whatever. And then they're all in. So that has happened before. I mean, that happens actually more than I thought it would, but it does. You don't hear from them forever and, then, all of a sudden, they want to do it, or they're trying to figure out their budgets. But most of the time, if they've had that call with you, it may not be that they get back to you right away. But if you keep following up with them, they're gonna get back to you and tell you one way or the other. On the flip side of that, when they do, if it's a no, or not this year, or the client is not really sure if this is a good fit, or we don't have the budget or whatever, ask them. If they don't tell you the reasoning behind the decision, I always suggest going back and saying,"Oh, totally understand. Thank you so much for spending your time. If you wouldn't mind, could you share the feedback as to why this wasn't a good fit for you just so we know on our end?" And a lot of times, that feedback is-- there are some salespeople who like to sort of argue sales with somebody when they say no, then they're like,"Well, you're missing this and this." I don't get very aggressive on stuff like that. I feel like they've sort of made a decision and, when you do that, all you're doing is pissing them off 90% of the time. You're not usually turning them around. But if you can understand what the pain point was or why they didn't do it, then you can always keep that in mind for next year when you follow up with them. Oh, well, they thought it was too expensive, or we're too late in their budget, so we need to make sure that we pitch earlier. And the other thing I'll always ask too is, like, "When's a good time to reach out for next year?" Things like that. So keeping them engaged, having the conversation, being polite when you get the rejection and not just ignoring that too, because I always try to-- when they take the time to tell me one way or another, I always try to engage with that because they took the time, and we all know how annoying it is when you don't hear anything. So having them come back to you and say,"Sorry, we're going to pass this year." And you're saying, "Oh, totally understand, can we ask what the feedback was on it, and why you want to pass." Then, a lot of times, you find out later that it has nothing to do with you. It has nothing to do with your event. It has to do with budgets, or maybe the timeline of where your event is. So knowing that kind of stuff also helps you in the future.

Panos: 1:01:09

Yeah, and I also agree that, in most cases, trying to argue with a "no" is pretty pointless. I mean, it's not going to get you anywhere. In fact, what's going to happen is that, because you sort of put someone on the spot and they maybe feel a little bit uncomfortable, they won't even, I think, in some cases, give you the true honest reason why they decided to not go with it, right? They'll give you something to just get rid of you. Whereas I think the best you can do in those situations when they've decided to not take the sponsorship is to at least, which is very valuable-- to at least get them to give you some good feedback which, as you say, you can use next year or on another sponsor. And you need to make them comfortable that saying no, is going to be totally respected for them to get to the point to actually open up about why these things didn't work out. In the event that someone comes back wanting to negotiate price, they want to haggle a little bit - and some people, actually, I think they do this as a sport, almost, right? Even if they're gonna go ahead, they want to try and maybe feel like they're getting better value, and they'll say,"$10,000? I was thinking more, like, eight or seven, right?" They give you a deep discount on something. How do you handle that?

Teresa: 1:02:37

So for us, we kind of decide on what it's worth because this does happen a lot. I mean, this happens with our national brands. They'll come back and they'll say, "Okay, the client wants it, but they only have a budget of $8,000." And let's say what I pitched was$10,000. Then what we normally do-- there's a couple of ways to handle it. I'm a big proponent of adjuster assets. Don't give them the same thing for a cheaper price. You don't want to do that. Now, if they're buying a bigger package, like with our with Hood to Coast and with what we work with-- like, we have a series plus we have the big race and, sometimes, what we'll do is, maybe-- the whole big package is $20,000, let's just say, and they come back and they say, "We only have $18,000." Then we might say, "Okay, because it's the bigger package, we'll go ahead and discount it by the $18,000 for this year." Or just so you can check us out so that we know that you can-- because if you do that if you set a precedent of that from the beginning, it will become incredibly hard to get those sponsors who are negotiating it down to move up. So, if you do not take away assets from what you're proposing for the price, you're devaluing those assets. So what we'll do is say, "We can adjust it to $18,000, but we're going to have to adjust how many social media posts you get. Maybe you're only going to get one email blasts. Like, yes, we can make your budget work, but this is the couple of things we're going to have to remove from it to make it work." A lot of times they're fine with it. Or what we'll do sometimes, too, is behind the scenes, it's like,"Yes, I would totally sell that for $18,000." So in your head, you're thinking, "Yeah, that's not a big deal on our end." But what you want to do is retract those items so that you can actually grow in the future. If we're giving them that same price and they know at that point that they're always going to be able to negotiate those prices with you. The other thing you need to be willing to do also is understand that value of your time and also understand the value of your event, and be willing to say no as well. Just because someone says, "I'll give you $1,500 for this" doesn't mean you need to take it. So that happens to us quite a bit too. Like, I mean, I just had a deal that was a $10,000 deal with a really major brand, and they came back to me and said,"We want to do this, but we only have $1,500." Well, it's not gonna happen. So I have to come back and say, "There is not a package that I can put together for you that's $1,500. Our event minimum is $5,000 for sponsorships." Because, at that time, you need to be quite blunt, it's just too much work. The event isn't making any money off of $1,500 because of the size of that event. So although you think you may be doing a favour by giving us three cases of water, it's cheaper for us to just go buy the standard water than it is for us to do the work for $1,500 because the work is the same. I mean, sometimes, the smaller sponsorships aren't as tedious, but you're still doing the same amount of work that you would do for a large sponsorship that you would do for small sponsorship a lot of times. You still have to collect all the logos. You still have to make sure all those brandings are correct. You still have to fulfil their sponsorship. You still have to get the agreement. So sometimes, I think what happens is events get so wrapped up in making sure they have cash, that they don't realise it's probably sometimes not fiscally responsible to even take the deal. So that's something else to think about as well.

Panos: 1:06:48

Yeah. Again, broader, I guess, life lesson here. You need to be able and comfortable to say no under certain circumstances. I mean, obviously, it's easier said than done in some contexts when there's lots of pressure and you need to meet goals and all that. I mean, I understand it can be tough. But, it's the A and Z of going into any kind of negotiation - being able to say no in entertaining the option that you have, and to be able to say no at some point. As you say, you gave someone $10,000, and they and they come back and you accept $1,500, I mean, what does that say about your pricing? You know what I mean?

Teresa: 1:07:26

Yes, absolutely.

Panos: 1:07:30

I mean, there, it's gonna be crazy after that - I mean, accepting an 85% discount. What does it say about your proposal and your approach to things?

Teresa: 1:07:39

Right.

Panos: 1:07:39

So assuming that you clear that hurdle as well, both parties are happy which is great, how about documenting everything? I think I was reading your book and you take a very by-the-book approach to this in terms of drafting agreements, and being really specific about stuff. Just for a sec, tell me what would you recommend for smaller events who may not have the ability to go and retain a lawyer and get them to, like, draft a custom agreement. Like, is there a line maybe to be drawn and all that? So basically, you do document things quite rigorously, but without maybe having to put up a couple of $1,000 for a lawyer?

Teresa: 1:08:26

Yes. Okay, so I guess the thing that I want to start with is, in this day and age, especially in the US and in other areas, if you're having a large gathering event, you really should have an agreement because you need to be able to protect yourself and more aspects than just the sponsorship itself. But events should be very aware of their liability and different situations, as well as making sure they have insurance that is covering them and some of these other aspects too. So if you don't have those things in place, they're very, very important and they're worth the investment. If you can't make that investment, it may not be the best thing to do - to have a large gathering or any kind of gathering like that. So with that said, the other flip side to that is, with the pandemic across the world, we learned the hard way because we spent a full year just on educating events all over. I think I did, like, 52 webinars with associations across everywhere on how to unravel your sponsorships when the events were cancelled. So that was a big red flag of how many events did not have themself situated. Now, not that I think there's going to be, I mean, hopefully, another pandemic that's going to shut stuff down, but what it did is it made it very clear that a lot of events don't have an understanding of what to do when their events get cancelled. It could be anything. It could be for any reason. The other thing too is that if you're involved in brands, you could find out later that the brand you're involved in is one you don't want to be associated with, like, if something happens, this is probably a complete-- and this is why this is on top of mind is because I was I was just watching this documentary about Jared from Subway and he ends up having to go to prison. But the thing is if you had Subway as your brand and then something like this happens, and you don't have a contract, and there's a lot of other things going on, I mean, you could actually step away from a brand like that because of the morality clause or whatever. So, agreements not only protect your event in all kinds of situations, but they also make sure there's no breach of contract, and it also makes sure that all of your stuff is very clearly stated. So I don't know how many of you-- because I worked on a lot of events at the beginning. I dealt with a lot of sponsors who, at the last minute, started asking me for all these extra things, especially with the music festivals. It'd be like, "Can I get more tickets? Can I get a VIP? Can I get this and this?" And when you have an agreement that's clearly outlined, I mean, that stuff goes away, for the most part. The other thing too is that you're very-- this notion of, "Oh, you're on social media post," it clearly states what they're getting that kind of stuff. So I guess, in a roundabout way, what I'm saying is, yes, there can be a sort of middle line for events that probably don't have the kind of money that they have that it would take to get a lawyer to draft it up, but I think it's worth the investment because it will save you in the long run. A lot of those brands have their own agreements, and if you do not understand how they read, I would tell you that 90% of them are going to favour the sponsor. So for instance, I had an event that had a very large sponsorship with a brand. They signed an agreement that the brand gave them, and then the brand cancelled on them 15 days before the event. Well, in their agreement, because they weren't there, they had to give back the money, and then they didn't have enough time to sell to another sponsor. So this happens a lot. I mean, we had a very large insurance brand for one of our music festivals that paid everything, that paid the money and everything, and then they cancelled on us on a tour which left an empty spot in our event for us in our festival. But the thing is that we got to keep the money because we had an agreement that protected the festival. People don't think it's going to happen, and I'm here to tell you it does. It does happen, and it will happen when you're not prepared. So a couple things I would say is, one thing, and this is not a push-- but I knew events have this problem. So they don't exactly know what kind of agreement to do. They don't exactly know what to include in their agreement, that kind of thing. So one thing we did is I had our lawyer draw up a template agreement. Now, we don't endorse it as a "Catch all you need to go." You should take it to your own lawyer, but we've had them draw it up. If you get the workbook which is $20, that agreement which cost us anywhere between $2,500 and $3,000 is in there. So you have something that has been vetted that you can use. Now, I am not endorsing that it's perfect for every state or out of country because it was written in the US, but it is a guide, it is a template of what you can use, and essentially it'll cost you $20. Now, if that doesn't work, I suggest taking it to a lawyer - it'll cut down the time too because they don't have to go through everything - to look at that. The other thing is you can do a generic one. You can kind of do sort of a simplified version if you want to, but you want to protect yourself in some major areas and some of those things-- like, if you have a sponsor out there and they do something stupid, liability-wise, you want to make sure you're protected. Maybe, they have a tent that they didn't stake properly and it gets windy and it blows away and hits somebody or things like that. You need to protect yourself from those things as well, not just making sure that you're offering-- that you're getting paid what you're supposed to get paid and that you're offering the same items that you're doing. But this does also hold you accountable as the event to make sure you fulfil those items and that those items are taken care of because that's the other thing I find with a lot of smaller events. Their fulfilment process tends to be all over the place, and that's the biggest issue as far as resigning sponsors too - when they don't actually fulfil their things correctly.

Panos: 1:15:34

I'm sort of mentally reserving space for a whole episode on fulfilment, which is a whole other thing, I guess.

Teresa: 1:15:41

Yeah, it is. It can be a whole nother thing, yes.

Panos: 1:15:44

But it's some wise words. And I'm always reminded how litigious our societies have become these days. A good legal agreement always comes handy. Okay, so I want to wrap up on a slightly tangential topic, but I think it's really important because we've been essentially giving people lots of information through this podcast- and the one before it - arming them with some basic skills, a good understanding of the whole process, how they can go about it on their own, and some people actually reached out asking me about sponsorship brokers and marketplaces and all kinds of stuff. And obviously, you guys, Green Cactus, you act in some capacity as a sponsorship broker or a sponsorship agency. We'll go into the differences between those things. So I wanted to, like, quickly go over that. So people also understand their options with regards to brokers which, I guess, is someone doing lots of this stuff on your behalf. So do you want to give us a quick definition of what a sponsorship broker does in this industry?

Teresa: 1:16:53

A sponsorship broker basically tends to have-- a good one tends to have a lot of relationships with agencies and brands already. But the idea is that they go in and they broker the agreement between the festival or the property or the race, and the brand itself. They help facilitate that deal, essentially. And so, for most events, sponsorship brokers like us-- there's agencies, and there's brokers, there's probably more brokers, which are just the individual than there are agencies like ours. So ours handles everything related to sponsorships, even the management on site. So we can have brands that will have events that we can call us and ask us just to manage all their sponsors at an event or something like that. So we do a lot more than just the actual brokering. But there are lots and lots of individuals out there who call themselves sponsorship brokers. And essentially, they say, "I'm gonna go in. I'll make all the sales for you. And then I'm going to take a commission." There's a lot of scams out there. So that's the biggest thing I tell people a lot. I cannot tell you how many times I've had people call me because they were scammed or they hired a broker, and then they took all this money up front, and then they never heard from them again. I mean, there are brokers who have ended up in prison because that's what they do. Or they go in and they sell a whole bunch of events and take their money and then they're done. So you have to be very careful that you hire a reputable broker. And a couple of red flags, I would say, for brokering is making sure that you have somebody with a reputation. Ask them for their references. Ask them if you can talk to some of their clients or find out who their clients are. Make sure they have a really clear presence online. Because I'll get emails or-- what happens a lot of times are events will get emails from individuals who are, like, "We'd like to help you sell or we've got these clients lined up who want to be a part of your event," or things like that, trying to get them to maybe look at them for brokering or they're trying to broker some specific deals. Go and look for those people. See if you can find them on LinkedIn. Are they connected to a lot of different people? Are they connected to brands? Do they have a reputation? So checking in on those kinds of things. Do your research. Don't take their word for it. The biggest thing for us, like, the biggest-- to be very honest, if they're soliciting you, I would be cautious. And the reason why is that there are not a lot of reputable brokers and agencies out there. Like, for me, for instance, for us, we have not actively sought work in probably four or five years. So I have not gone to any event and tried to get them to let us broker for them. Like, they are coming to us, or we are hearing about other events through word-- like, they're getting referred to us. Like, other events or referring them to us. We are not out there looking for work. So if you have people who are emailing you directly, this is a red flag. I would look for it because there's just not a lot of us out there, and we are most likely turning people down, not trying to find more events. So that's kind of a weird red flag, but that is one of the things. Now, not to say that everybody is like that or that there aren't some good ones out there that maybe are trying to sort of start their business or whatever, but that's a big one. The other thing too is commission-based - how that works, fee-based, retainers, all those kinds of things - are also things you need to be aware of and understand. So, as far as retainers go, most brokers will take a retainer. For us, we have a retainer, but our retainer is minimal in comparison to those that are kind of scamming. Now, some brokers depending on what type you're looking at-- if you're a property broker, which means that you're doing, maybe, pro sports or venues, things like that, it may be a little different. But for the race industry and for sort of your mid-level, large event kind of thing, small events, you're looking at anywhere from 15% to 30% on commissions. It used to be no more than about 20% to 25%, but because everything is costing more commissions are going up a little bit as well. So 15% is the minimum. If someone is wanting to do a 10% commission or 12%, I mean, I would be a little weird or interested to see that. But be prepared to pay anywhere from 15% to 25% or 30% on commission. So that basically means that they're going to sell something in and they're going to take 15% to 25% or 30%.

Panos: 1:22:51

A sponsorship broker, what bits of the process would they handle? Would they only go out and-- like, would they do the prospecting? Would they do the intro deck? Would they send out the sponsorship proposals? Like, what bits of that would they handle?

Teresa: 1:23:08

That's a great question, actually. I should probably have laid that out. I can really speak from what we do, and I can also speak a little bit about what I know some of my peers do, but I can't speak for every broker. So in general, we charge, like-- I'm just going to use us for an example because I know I can speak to us. We charge a fee for your deck. So what would happen? If you were to hire somebody like us, normally what will happen is they'll charge you a flat fee for what they call a debrief, discovery meeting, whatever. They'll spend a lot of time understanding your event. They will usually help inventory your assets, figure out what you have to sell, help with pricing of those assets, and understand if you're missing the boat on certain things like, oh, why aren't we sponsoring this or why aren't we sponsoring that? Those kinds of things. So we would go in and we would ask that. We'd spend several hours probably with the event trying to look at what you've done in the past, when you've done it, what you should be doing, and kind of also what your overall goal is like, how much do you want to eventually make it to. So once we understand that, there's usually a flat fee for that. Then, normally, some brokers charge you for the deck, some brokers don't. We do charge for the deck because then you get to keep it and you can do what you want with it. So if you want to use it for other stuff - marketing - if you decide later that you want to get rid of us, it's yours. So that's also kind of some people-- we also allow events to create their own decks using our guides and then we'll go in and say, "You need to have just this or just this." So they don't want to hire us to do their deck, that's fine too. So it kind of just depends. Some brokers do not do the decks. They kind of tell you what you want to do and then they'll go have a designer or somebody do it. So once you have that, then your broker should, for their commission, be the ones that do the calling, that reach out to the sponsors, that handle the negotiation parts, that put together the agreement, and then facilitate the signing of that agreement. That is what the commission is for. It's the actual going out, finding the people, doing the cold calling, putting together the proposals, developing that, and then leading you all the way to a signature. Now, a lot of brokers, at the end of it, what they'll do is once you have a signature, then you get paid, then you get your permission. Some more agencies like us will tend to then offer services past that. So for us, we offer fulfilment services, which means we manage everything from facilitating working with those brands at that point, collecting all of their stuff, making sure they hit all their deadlines, babysitting like that, and then making sure the event actually fulfils every single thing in their agreement. That's part of what that fulfilment service does. A lot of brokers do not manage it past that point. They manage it up to the signature point, and then they leave it up to the event to make sure everything happens correctly. And then, at that point, it's up to you to make sure it is handled. If you have a smaller event, that's probably how I would have done it. I probably would just have the broker handle up to the signature and then make sure you've got somebody dedicated to fulfilling everything. And then, on the flip side of that, you can also have services for-- we will do recaps for our events afterwards too, put them all together, reach out to all the sponsors, do their debriefs, the whole thing. So we can run the gamut. And then, there's also people that will go out there and manage it. So I have some clients where we handle everything up to the signature. Once a signature happens, then we send it off to the event and the event handles all the fulfilment and we have some clients that we handle every single piece of it. The brand may never even meet anybody from the actual event. They're only dealing with our people all the way through. Now, that is the smoothest way to do it because, then, your brand is always being in connection with the same person or the same two people through the whole process, and a lot less stuff falls through the cracks. That's the best, but it is the more costly way to do it because, after the signature part, all the other services that are no longer part of that commission, then they are paid services. So it's kind of a combination of both. But a lot of brokers - like, individual brokers - that maybe aren't part of an agency are just handling finding the sponsors, getting the negotiation, putting the proposals together, all that kind of stuff, and then getting it all the way up to the signature of the deal. And then they sort of relinquish it. So brokers also sometimes will have permissions based off of multi year. So let's say they help you sign a three year deal, and the next year, you decide, "Oh, I don't want to use that broker anymore. We can do it ourselves." You're still on the hook for paying that broker for the next three years on that deal, depending on what your deal is between the broker, the agreement there, so make sure you have a really good clear agreement and understanding of what they're going to provide to you, and also what the money is. Do not take a broker who is not willing to sign an agreement with you with all of these things clearly stipulated because scamming is a really big problem with brokering. The other thing too is if you have a retainer, we do charge a retainer. So it's minimal, though. Our retainer is minimal. And then what we do is, at the end of the retainer, we actually take that total amount off the end of what we earn a commission. So if our retainer is $500 a month and you've retained us for five months or something-- let's just say four months, make it easy. So that's$2,000, then, in the end, when we're done, our commission, let's say we made $10,000 in commission, then we take those$2,000 off. So theoretically, you haven't lost any money when it comes to the actual commission side of things, but we have to have that in order to be able to do all these other things. You have to get paid while you're doing it. There are some brokers who will only just do the commission and they'll take it at the end. It just kind of depends on who you're working with. We are not one of those. I've learned the hard way that that is not the way to do it because having a retainer means the event is way more invested in the success of the sponsorship programme.

Panos: 1:30:11

Okay. Well, I don't think I have any more questions on that. It's been very informative. I think you've covered everything on how it works, commissions, and everything. In the very likely case, as we had on the previous episode, that people want to reach out to you, either to thank you for all this information or want to follow up with you on maybe some of these things, maybe for some formal advice around their sponsorship efforts, how can they do that?

Teresa: 1:30:37

So our website is greencactusca.com. The book, if it's easier to remember, is sellyoureventbook.com, and that will lead you to our website as well. We have a lot of free tools, resources, and guides to show you how to do these different things. So you can check that out as well. And my handles are @TeresaStas or@GreenCactusCA. So that's how you can get a hold of us.

Panos: 1:31:12

That's awesome. We're going to include whatever follow-up documents or stuff. You want to send over any links? We had some last time and they were really helpful for people. So if maybe sponsorship proposal templates or whatever you have in mind, that might be helpful, folks can find it on the podcast notes, which is great. And I'm tentatively pencilling in a date to do a fulfilment episode because I think that's the only bit that's left, and it's really, really something that I think most people would be so elated by that point that they don't spend a lot of time thinking about, but it's really important for the future. Right? It's really important.

Teresa: 1:31:51

Yeah, absolutely.

Panos: 1:31:53

Teresa, thank you very, very much again for spending another hour and a half with me. It's really a privilege.

Teresa: 1:31:59

Thanks so much for having me. I really appreciate it.

Panos: 1:32:02

I hope Hood to Coast, in a couple of weeks time, turns out better than last year.

Teresa: 1:32:07

Yeah, that's always good.

Panos: 1:32:09

Thank you very much to everyone listening in, and we'll see you guys on our next podcast. I hope you enjoyed today's episode on sponsorship proposals with Green Cactus' Teresa Stas. You can find more resources on anything and everything related to race directing on our website RaceDirectorsHQ.com. You can also share your thoughts about sponsorship or anything else in our Facebook group, Race Directors Hub. Many thanks again to our awesome podcast sponsor RunSignup for sponsoring today's episode. And if you enjoyed this episode, please don't forget to subscribe on your favourite player, and do check out our podcast back-catalogue for more great content like this. Until our next episode, take care and keep putting on amazing races.