How Sponsorship Benefits a Business: What’s In It for Them? - The Sponsorship Collective (2024)

Corporate sponsorship or sponsorship by a small business might seem like more of an act of charity than a self-serving act, but there are actually many advantages to businesses that are willing to invest in their local community and the groups within it.

So how does sponsorship benefit a business? Businesses receive the following benefits from a sponsorship:

• It increases visibility for the company and its brand
• It allows businesses to aim for a specific demographic of sales
• It improves a company’s reputation for success and refinement
• It generates sales leads
• It generates dynamic content for a social media marketing campaign

While it can help a community and its organizations a lot to have businesses step in on their behalf and lend both financial and moral support, it’s also just good business sense. Read on to find out more about what businesses get out of sponsorships, both in their local community and abroad.

Sponsorships Lead to Increased Visibility

Other than depending on the strength and quality of their products and services, there are many other ways a business can make themselves known in the community. Being seen by potential customers is one of the most important things a company can do to promote itself—otherwise, they are losing hundreds of potential sales a day from people that don’t even know they exist.

Research suggests the increased visibility facilitated by sponsorships can be one of the most positive ways for a company to present itself to the public to have its goods and services perused because a sponsorship allows a company to both put its best face forward and also frame its interactions with the public exactly as it wants them to appear.

For businesses that are dependent on digital sales or sales generation, sponsorships can be vital to letting the community know that the business exists at all. After all, it is hard to get people to check out a company website if they aren’t aware of it, and there isn’t a physical storefront for the business for them to walk in and ask about it.

Sponsorships Help Businesses Engage Specific Demographics

A major benefit of sponsorships for businesses is that it allows businesses to dovetail with local communities that contain people more likely than the average consumer to purchase their goods or services.

For example, an athletic shoe company such as Nike might focus on sponsorships of athletes specifically. This is because not only are athletes more likely to use their products of their own accord since that is the demographic Nike is geared towards, but the spectators who are interested in athletics who see their favorite athletes sporting a Nike sponsorship will be more likely to purchase those goods as well out of emulation or hero worship.

Sponsorship isn’t limited to athletic or competitive events, however. It’s not even limited to sponsorships of people or organizations associated with the business sponsoring them. Large corporations have taken to endorsing sponsorships outside of their respective lanes as of late in an attempt to make themselves seem more well-rounded and approachable to consumers.

This can be seen in the sponsorship of independent artists by large corporations, which endorse artists as a way to show patronage to the arts for overall societal benefit, even though the arts do not have a direct connection to either athletic wear or sodas.

Sponsorships Improve a Company’s Reputation

Another way that companies can use sponsorships as a positive force in the business is to use them to improve the company’s reputation. This is particularly important if the company produces a good or service that is considered somewhat detrimental to the larger community.

For example, Nestlé has been accused of hoarding water resources, as well as unnecessary plastic water bottles that are damaging to the environment. As a response to this negative press, the company went on to create the Nestlé Institute of Packaging Sciences, a scientific research center.

On its face, this shows that Nestlé cares about environmental. The shows tangible positive action, and for consumers, this can go a long way towards improving a company’s overall reputation for social conscience.

For companies that are traditionally associated with a good or service that is seen as a negative social contribution, sponsorships can be a way to show the world that the company is aware of its own missteps or reputation and is taking constructive action to serve as a more positive force in the world.

Sponsorship Generates Sales Leads

Along with letting a company aim its sales tactics at a particular demographic, sponsorships are a great idea for generating sales in general. The more public exposure a company has, the more likely they are to run into a potential customer in any demographic.

The best places for sponsorships to generate sales leads for a company are at sponsored events such as trade shows. These sponsorships give the business the benefit of a captive audience that is already interested in the sort of things the company does, which already makes them more likely to actually make a purchase.

For a corporate sponsorship to be truly successful on every front and act as a true benefit to the business rather than an unnecessary expense, it needs to increase a corporation’s brand value and social equity as well as drive new sales that help offset the expense of the sponsorship.

Sponsorship Generates Content for Social Media

It isn’t one of the more visible benefits to a company, but the generation of content for social media marketing campaigns is one of the best unspoken advantages for a business to participate in corporate sponsorships.

One of the biggest challenges of running a successful social media marketing campaign for a business is the generation of dynamic content. In other words, these are the kinds of things a company posts about that make it less boring to the consumer.

For example, people who don’t drink Red Bull might not know anything about the product, but they might remember the viral moment that spread across social media when Red Bull had a man jump to Earth from space or Elon Musk launched his Tesla Roadster into space.

While to the untrained eye, these might seem to be little more than public relation stunts, a student of social media marketing can see the gradual build-up to these viral events in the social media marketing campaigns of those companies. It is in this build-up that sponsorship offers benefit to a company. The sponsorship helps generate excitement about a business and its products and can leave an impression on potential customers long after the campaign.

Sponsorships Can be Mutually Beneficial for Businesses and Communities

It’s always good to see businesses and corporations use their considerable financial and social power for good, and sponsorship of positive social movements and vulnerable communities can be a way for businesses to show a more human side.

Not only can local communities financially benefit from corporate sponsorship by gaining access to resources they never would have had otherwise, but corporations can also show their social values through the sponsorships they choose to endorse.