Should You Market Your Partnerships as Luxury or Commodity Goods?

I had the immense pleasure of joining business and marketing guru Seth Godin on stage last week at the annual TicketManager Partner Summit in New York City.

Among his many thought-provoking comments and insights, was Seth’s perspective that sponsorship and partnership packages should be considered luxury items, i.e., they should be offered and valued based on their scarcity and accessibility to only the privileged who can afford them.

That approach is the correct one in many cases, as FIFA’s new estimated nine-figure deal with Lenovo attests. Two decades ago, the soccer governing body was one of the first major rights holders to go all in on a fewer-bigger, less-is-more approach to sponsorship and quickly saw its partnership revenue almost triple.

The top-level FIFA Partner package—once limited to six companies, now seven with the addition of Lenovo as official technology partner—appeals to brands that don’t want to be part of a crowd by offering a broader package of exclusive rights and a less cluttered environment, all at a premium price.

But as wise as this strategy is for many properties, it is not appropriate for all. Consider the Las Vegas Golden Knights.

As the Las Vegas Sun reported last week, the Golden Knights have nearly 200 corporate partners. I will be the first to admit that when I read that stat, my immediate reaction was that it was too high a number to create value and offer return for those companies and brands.

But as Keith Baulsir, the team’s senior vice president of global partnerships, pointed out, the strategy is the correct one for the Golden Knights’ market. It reflects the fact that Las Vegas is the 40th-largest metropolitan area in the U.S. and is not home to a large base of corporations from diverse industries. That has made it necessary to split categories among multiple partners and offer packages that are affordable to smaller local businesses.

The Golden Knights’ success is a valuable lesson for rights holders in taking what the market gives you and not trying to force others’ strategies to fit your situation, no matter how successful they may have been.

It’s a good bet that while the Golden Knights have the highest number of deals among NHL teams, they are probably not at the top of the list in terms of partnership revenue earned. But as Baulsir also noted, sponsors bring plenty of value beyond cash. The team has hundreds of brands that provide promotional and other community support.

The key for any property before embarking on a partnership sales campaign, is accurately assessing the sales environment, crafting partner levels and packages that optimize both revenue and activation, and adjusting expectations and setting reasonable goals that reflect your unique conditions.