Pricing the Deliverables in Your Proposal

The fastest way to kill a sponsorship proposal is to price it like a bill. Asking for $10,000 because that's what your season costs tells a marketing director you want help with your budget. Sponsors don't care what it costs you to race. They care what your program is worth to them, measured against what they would otherwise spend to get the same result.

When I learned to price proposals that way, my success rate went from a few percent to something closer to half. Here's how to do it, and what the brands on my Summit panels say about the numbers you put on the page.

Price from the sponsor's side of the table

Every number in your proposal should answer one question: what would this cost the sponsor to buy somewhere else? Companies won't pay you for what you think you're worth or for what you need. They'll pay you for what you can save them in marketing costs.

The yardstick is media rates. Every magazine, TV network, website and race program has a rate card that tells advertisers what space costs. If you get a 30-second interview on local news, compare it to what a 30-second commercial costs on that station. In the example I use at my seminars, a 30-second commercial on the local ABC station costs $3,000, so a 30-second interview hands the sponsor $3,000 of value. If a full-page ad in an off-road magazine runs $7,000, a full-page article about you and your sponsor is worth about the same. Get the rate cards, match each deliverable to its closest paid equivalent, and add them up.

Put the countable things on the page as line items: logos and where they go, events and appearances, emails to your list, social posts and their reach, tickets and hospitality. Megan Meyer, the two-time NHRA world champion who co-hosts my Summits, reminds racers that the traditional assets still count. "Still doing the signage, the logo on the car, on the shirt, hospitality, tickets, anything like that, that's still very important," she said. "We're not saying that you shouldn't be trying to put logos on the car anymore. We're just saying it's so much more vast now." ▶ Watch the valuations session

Reputation, integrity and fan loyalty are real, but you can't put a dollar on them. Show those in the deck with pictures. Keep the proposal to what you can count.

Ask them to move money, not add it

Most companies already have a media budget. They're buying ads, social promotion and commercials. The easiest proposal to approve is one that doesn't ask for new money at all. Instead, it shows the marketing director that if they move a slice of what they already spend over to you, they'll get more value for it than they're getting now. If a brand spends a million dollars on media, you're asking for a small piece of that million and showing how your program returns several times that piece. The budget doesn't grow, so there's less reason to say no.

Not every line is worth the same

Tony Yorkman, who ran sponsorships at K&N Engineering for years, told my Motorsports Sponsorship Summit to price each part of a program on its own. "Know that every piece of your program has some kind of value, and identifying what that value is," he said. "One guy next to the next guy might have a different value when it comes to their logo, but it might be that you have better value when it comes to your media, or you might be less value when it comes to your networking." ▶ Watch Tony Yorkman explain this

He also sees pricing as something you grow into. "Today you're asking for, in lack of better terms, a certain dollar for that logo size, and the next year, if you're doing it right, you're going to be able to ask more dollars for that same logo size, and that's how you're going to progress." ▶ See the full session

Ben Dolan, VP of marketing at VP Racing Fuels, gave a concrete example of one deliverable outvaluing another. A post dedicated to a single sponsor scores better than a group shot. "When it is a post dedicated to a sponsor, and you can show me that you have experience creating meaningful, engaging posts for your sponsors and content for your sponsors, that to me is more important than being one of seven people in a post," he said. "The quality score is going to be much higher. And so my average ad value on the post that you're doing for me are going to be a lot higher." Price the dedicated post higher than the shared one, and be ready to show past examples that prove you can make it. ▶ Watch the Decks & Proposals session

Product can be the price

Not every sponsor pays in cash, and not every proposal should ask for it. Endemic brands, the tire, oil, fuel, shock and engine companies, can pay with product that makes you faster. Non-endemic brands like food, beverage and insurance can't improve your lap times, so they have to buy the representation with money. Your proposal should ask for the right currency from the right company.

Dolan explained why product deals can be worth more than they look. "In our case, even the factory teams, there's a lot beyond cash. So we do a ton of product sponsorship," he said, because the power gain from the fuel, "an extra three to 5%," would "cost them exponentially more in engineering investment to get the same amount of power out of their bike without it. So there's other benefits beyond cash." ▶ See the full session

Yorkman's advice is to value more than the check: "Sometimes you take on a partner just to help you get to that next one." ▶ Watch the clip

Don't inflate, and know who's checking

Overpricing is far more common than underpricing. Chris Meyer, senior marketing specialist at Maxxis, said the only time a racer gets a deal off paperwork alone is when they've priced themselves far too low: "Unless someone has just grotesquely undervalued themselves, if they're offering themselves for pennies on the dollar and they're actually worth a lot more, that's pretty rare that that happens." ▶ Watch the session

Expect your numbers to be audited. Years ago I brought Polaris a proposal with well over a million dollars of value in it, including hundreds of commercials on cable and network sports channels and visibility at a thousand races. Polaris sent it to its ad agency, which gave zero value to anything on networks that weren't Nielsen-rated and zero to trackside banners because attendance wasn't audited. The million-dollar package came back valued at about $10,000. Source every number, use figures the series and the media outlets publish, and be ready to explain how you got each one.

If an agency is involved, say whether your price is gross or net. Gross is the full amount the company pays. Net is figured after the agency's commission. Making that clear up front keeps a deal from stalling over commission.

Price in what the series allows

Before you promise an activation, find out what it will really cost. Megan Meyer learned this in NHRA. "Make sure that you check with your series that you race in, to see if there's certain stuff you can and can't do, because I know from my side of it with NHRA, they can be very limiting as far as what you can do while the drag races are going on," she said. Her team can't sell merchandise outside the trailer, so a sponsor would need to buy a midway spot. Her advice: "Try to see what that cost is, and then see how many people on average attend that event, and see if it's going to be a benefit for that sponsor." ▶ Watch Megan Meyer on this

The takeaway

• Never price your proposal on what your season costs. Price it on what the sponsor would pay to get the same result elsewhere.
• Collect media rate cards and match each deliverable to its paid equivalent.
• Price each asset on its own, and price dedicated content above shared content.
• Ask endemic brands for product and non-endemic brands for cash.
• Source every number, state gross or net when an agency is involved, and check series rules before you promise an activation.