The Value of Building B2B Sponsor Relationships

Transcription

1 Marte Støle Sjørbotten Ingrid Lund Thjømøe Supervisor: Erik Olson Master Thesis The Value of Building B2B Sponsor Relationships Date of Submission: Campus: BI Norwegian Business School - Oslo Examination code and name: GRA Master Thesis Study Programmes: MSc in Strategic Marketing Management & MSc in Business and Economics This thesis is a part of the MSc programme at BI Norwegian Business School. The school takes no responsibility for the methods used, results found and conclusion drawn.

2 Table of Contents Introduction... 1 Research questions... 2 Literature Review... 2 Sponsorship Definition... 2 Activation... 3 Sponsorship Dimensions Sponsor Network Relationship Building Hospitality Economical and Managerial Tidiness Visibility Community and values Satisfaction Sponsor Network in Norwegian Soccer Clubs LinkT s experience with relationship building Hypotheses Methodology In depth Interviews Sample and Questionnaire Initial data analysis Results Hypothesis H Hypothesis H2 & H4b H Hypothesis H3b Discussion and Limitations for Future Research Activation What affects the sponsors satisfaction with the sponsorship? Group 1 Sponsors part of a Sponsor Network Group 2 Sponsors not part of a Sponsor Network General limitations and future research Managerial implication and Conclusion Bibliography Articles and Books Web pages... 37

3 Introduction The way of managing sport sponsorships is evolving from a traditional B2C (Business to Consumer) focus to including B2B (Business to Business) strategies. According to Cobbs (2011) traditional sponsorship strategies with B2C focus is well documented in the literature. However, such strategies, like relationship building between sponsors, have not been explored, despite major companies substantial interest (Cobbs 2011). Enormous amount of money is spent on sponsoring. Globally, sponsorship expenditures have increased from $37.9 billion (2007) to $46.3 billion (2010) and were projected to increase further to $48.7 billion in 2011 (IEG Sponsorship Report). In Norway, 3.28 billion NOK was spent on sponsorship in A percentage of 37.5 were spent on soccer clubs and 34 percent was spent on other sports (Sponsor Insight, 2012). In 2011 the sponsor market had increased to 3.8 billion NOK, and according to Sponsor Insight it will increase to almost 3.95 billion NOK in As investments increase, sponsorship strategies and requirements for return on investments becomes even more important. It is time to explore sponsorship strategies with a B2B focus. This paper will focus on B2B sponsor networks, trying to fill the gap of lacking empirical research on the topic. A sponsor network is defined as a network owned by a sponsored object, enabling cooperation between two or more of their sponsor partners (Cobbs 2011). This B2B strategy is a growing area in sponsorship and has not yet been studied extensively. The aim is to research how sponsor networks affect the sponsor s satisfaction with their sponsorship, in comparison to traditional sponsor activities. Hence, the traditional B2C sponsorship strategies also will be elaborated. Furthermore, it will be examined if there is a connection between the numbers of activational methods used by the sponsors, and how the sponsors allocate their resources. Activational methods are defined as all sponsorship-linked communications and activities collateral to the sponsorship investment, encouraging further relations with the sponsor (Weeks, Cornwell and Drennan 2008). The structure of this thesis precedes as follows; first, our research questions will be stated, followed by a literature review on prior research and theories on 1

4 sponsorship. In particular, the review will involve B2B sponsorship, but various elements of B2C sponsorship are also needed for comparison. Our sponsorship elements will be presented, which involves sponsor network, hospitality, economical and managerial tidiness, visibility, and communities and values. Furthermore methodology and results will be explained with subsequent discussion, limitations and future research. In the end, managerial implications and the conclusion will be presented. Research questions How much are sponsors spending on activation, and is there a connection between how much they spend, and how many activities they are taking part in? Which of the sponsor activities create the highest satisfaction for the sponsor, and which of the activities are most important? Is an organized sponsor network as valuable for the sponsor as other activational methods for the sponsor? Literature Review Sponsorship Definition Many researchers have tried to define the term sponsorship, including Witcher et al. (1991) who defined sponsorship as a charity activity given to the sponsor object. Even though sports and cultural objects often are dependent of the support given through sponsorship, this definition is too slim to cover the complete context of sponsorship. The most appropriate definition of sponsorship might be Meenaghan s definition which was already established in 1983 (p. 9): the provision of assistance either financial or in kind to an activity by a commercial organization for the purpose of achieving commercial objectives. Meenaghan also offers six potential objectives for the sponsoring firm: broad corporate objectives, product-related objectives, sales objectives, media coverage, guest hospitality, and personal objectives. According to Cobbs (2011), broad corporate objectives include the enabling of prospecting opportunities for salespersons, as well as building goodwill among decision makers. Together with guest hospitality, these two objectives relates to the relationship building part of a sponsorship. 2

5 Sponsorship has been viewed as an appealing communications tool, and the largest sponsorship agreements are made in sports (Fenton 2009). In Norway 71.5% (2009) of all sponsor investments are made in sports (Sponsor Insight, 2012), and 69% of sponsor investments in the USA (2008) (IEG sponsorship report). Activation To achieve greater advantage of the sponsorship, it is not enough to invest money; the sponsors must use the sponsorship for what it's worth, also after the initial investment. This can be referred to activating the sponsorship. Activation is a broad term which is claimed to create additional value to sponsorship. Lesa Ukman, Executive Editor of the newsletter IEG sponsorship report, states It's not what you sponsor, it's what you do with it, which is called activation," According to Ukman, effective sponsorships require far more than signage (any kind of visual graphics created to display information to a particular audience). She claims that smart sponsors should use sponsorships as a platform for other activities that help create greater awareness of the company's involvement (Lockyer 2003). Activational methods represent, for many sponsors, a major part of their sponsorship expense. In 2007, International Event Group (IEG) conducted a survey about usage of communication tools, to activate sponsorships. The results shows on average, that for every $1.00 paid in sponsorship fees, it is used $1.90 on activation. In relation to commercial sponsorship, the two terms leverage and activation often is used interchangeably, and Weeks, Cornwell and Drennan (2008) sets out to distinguish the two terms. They describe leveraging as all marketing communications collateral to the sponsorship investment; the term is used to describe all sponsorship-linked marketing communications and activities collateral to the sponsorship investment. Activation, on the other hand, is described as all communication that encourages further relations with the sponsor; it is often reserved for the cases where there exists opportunities for the audience to interact, or in some way become involved with the sponsor. The authors define activation as communications that promote the 3

6 engagement, involvement, or participation of the sponsorship audience with the sponsor (p. 3). Sponsorships succeeding in differentiation and adding financial value to the brand have been associated with higher levels of sponsorship (Cornwell, Weeks and Roy 2005). For activation to be successful, it is critical that the sponsor have the right resources, experience and money being the most important. According to Fahy, Farrelly and Quester (2004), the experience and seniority of the sponsorship manager will affect the internal perceptions of the sponsorship, and how easy it will be to achieve cooperation between the staff required to implement the range of tasks associated with sponsorship activation. Cornwell, Weeks and Roy (2005) also emphasizes the importance of communicating the sponsorship, and affording it. "If the brand cannot afford to spend to communicate its sponsorship, then the brand cannot afford sponsorship at all" (Crimmins and Horn 1996)p. 16). A sponsor cannot assume that the sponsored organization will communicate their sponsorship to generate consumer impact, hence the sponsor must take responsibility for this communication (Crimmins and Horn 1996). This communication is referred to all activities linking the sponsor to the sponsor object in the consumers mind. A sponsor can invest money in a sponsorship to receive hospitality and/or visibility, but it does not necessarily mean that they spend the money needed to activate and communicate the sponsorship. This leads us to our first hypothesis: H1: Sponsors who take use of several sponsor-activities, spend more money on activation, than those who participate in fewer activities Sponsorship Dimensions The trends in sponsoring are changing from advertising the corporate logo in the stadium towards activation. Business-to-business initiatives are pushed to save money, staff and time; the team s corporate sponsors are partnering with other fellow sponsors (O'Keefe, Titlebaum and Hill 2009), this can also be referred to as networking. We will now look into the most common elements and activities in a sponsorship. The elements are based on Meenaghan (1983) s article, other 4

7 empirical literature, and from in depth interviews with Christin Lillegrend; partner at LinkT, Paal Sprakehaug; Marketing Director at Nordea and Lars Erik Norum; Marketing and Sales Director at ADL and board members at LinkT. LinkT have been a major contributor for this thesis. Both Nordea and ADL are sponsors of the soccer club Vålerenga. The elements are the following: Sponsor Network, Hospitality, Economical and Managerial Tidiness, Visibility and Community and Values. 1. Sponsor Network Thjømøe, Olson and Brønn (2002) (p. 3) defines business networks as a set of two or more connected business relationships in which each exchange relation is between business firms that are conceptualized as collective actors. According to Clark, Cornwell and Pruitt (2009), a collective actor is defined as a set of members in an elite decision-making system who share an outcome preference, and are in an effective communication network with each other. In this thesis, networking is defined as a sponsored object holding a network position enabling cooperation between two or more of their sponsor partners. By creating this network between their sponsors, the object renders a Businessto-Business (B2B) service. Over time, this might increase both value proposition, awareness and image dimensions of the object (Cobbs 2011). Consequently, the sponsors of the same object can benefit from each other; interacting, developing business opportunities and sharing expertise and information with each other. Hence, the focus will be on understanding the development of sponsorship relationships, network, and the communication process in the network; primary- but mainly secondary communication. Primary communication is communication between the object and one sponsor, and secondary communication is between the sponsor partners themselves. (Bendapudi, Singh and Bendapudi 1996). Sponsors base the attractiveness of an object s network by three criteria; the potential partners core competencies, its network connections, and its network building skills. They can find the secondary relationships in the sponsor network even more valuable than the primary relationship with the object, hence indirectly increasing the sponsors perceived value of the object (Cobbs 5

8 2011). To increase the object s value further, it is important that the object attain network building skills to optimize the sponsor network to benefit the partner sponsors (Coppetti et al. 2009). Sprakehaug underlines how difficult it can be to attain new business customers if you do not have the right contacts, and that the sponsor network is a great resource to get in contact with the right people. According to Cobbs (2011), a well-established sponsor network can: 1. be used as a strategy-driven promotional tool 2. gain access to certain targeted business customers 3. create relational competencies, which can competitively impact the sponsors performance 4. represent potential channels for the flow of tangible or intangible resources The opportunity for sponsors to take advantages of each other s networks might make the list more complete. Christin Lillegrend in LinkT call this a network on network business opportunity. This could be an extension of point four. Cobbs (2011) suggest that teams with a greater sponsor network should be more attractive to sponsors with a relationship marketing agenda. This opposes the image-based sponsorship concerns of chaos of having too many sponsors, by proposing that a greater number of sponsors/partners in the sponsor network is hypothetically attractive to B2B partners (Cobbs 2011). The two following hypothesis is based on Cobb s findings: H2a: The Quality of the Sponsor Network increases the Sponsors Satisfaction with the Sponsorship H2b: The size of the Sponsor Network increases the Sponsors Satisfaction with the Sponsorship Being a part of a network is not new, and it has been shown to have an impact on different aspects of developed societies (e.g. sports). Despite, this fact, Bendapudi, Singh and Bendapudi (1996) confirms lack of empirical research in this area despite several articles efforts to encourage research on the network 6

9 perspective. He continues to claim that even when a network approach has been applied in a sports business setting, empirical research have focused little, if any attention on relations between corporate partners (Cobbs 2011). The following hypothesis sets out to find if the sponsor network generates satisfaction for the sponsors. H3a: A Sponsor Network increases the Sponsors satisfaction with the Sponsorship Congruency in a Sponsor Network The most frequently performed research in the sponsorship field seems to be the concept of congruence between sponsor and the sponsor object (e.g. Gwinner and Eaton 1999; Rifon et al. 2004; Woisetschläger et al 2010; Olsen and Thjømøe 2011). Congruency relates to the extent to which the sponsor and sponsor object share a logical relationship, such as would be the case if Adidas or Nike was sponsoring a soccer club. Congruence theory suggests that storage in memory and retrieval of information are influenced by relatedness or similarity. Therefore a brand is more likely to be remembered if there is congruency between the sponsoring brand and an event. (Cornwell, Weeks and Roy 2005). Positive effects derived from congruency that has been reported are; sponsor identification, positive attitude toward the sponsor, and favorable sponsor image ratings (Weeks, Cornwell and Drennan 2008). High-congruence sponsor-sponsor object relationships are easier to understand within existing cognitive schemas, easier to associate in memory, and/or less prone to negative cognitive elaboration (Weeks, Cornwell and Drennan 2008). This might not be the case if the sponsor is a bank or an insurance company, but according to Thjømøe and Olson (2011) there has been found evidence that mild incongruency can result in higher sponsor recognition accuracy due to increased attention or elaboration. Thus, the majority of empirical research has found that congruency is related to higher sponsor recall or recognition accuracy. However, little has been done to explore benefits and opportunities beyond the fit between sponsor and sponsor object 7

10 By advancing the sponsor-to-object relationship focus to include a sponsor network, the obstacle of congruence can be overcome. One of the benefits from networking is the sponsor s ability to benefit from each other s resources (Cobbs 2011). There has been no or little research about the effect of congruency between the sponsors in a network. We assume that incongruency between sponsors will have a positive effect on the network. This would mean that sponsors are not competitors, and can exchange services. Congruency in a network might just work as a counter incentive for new sponsors; it could create competition between the existing network members to generate new customers and partners within the network. This leads us to category exclusivity. Category Exclusivity IEG (the Institute of Economic Growth) defines category exclusivity as the right of a sponsor to be the only company within its product or service category associated with the sponsored property. In this thesis, category exclusivity in a network implies that the network does not contain sponsors that are in direct competition, regarding products or services they are offering to other network members. Two competitors in the same network can cause the same threats as found in ambush marketing. Ambush marketing is defined as a planned effort (campaign) by an organization to associate themselves indirectly with an event in order to gain at least some of the recognition and benefits that are associated with being an official sponsor (Sandler and Shani 1989). This means that a competing brand of one of the sponsors connects itself with the sponsorship without paying a sponsorship fee, stealing the attention away from the paying sponsor. With this in mind, ambush marketing cannot be eliminated with category exclusivity, but it can avoid the threat of competitors within the network, which again will increase the value of the network for the sponsor. According to Sprakehaug, category exclusivity is a criterion for Nordea to join a network. In 2010, Nordea was sponsor of Lillestrøm soccer club, which had four other banks in their sponsor network. The companies in the network were mainly local banks, which did not pose as a major competitor to Nordea. He still highlights that with any new sponsorship contracts, category exclusivity would be a condition. Norum agrees with Sprakehaug on the matter of 8

11 category exclusivity; they would never join a network which already included a competitor, this would reduce both competitors advantages from the network. Many sponsor objects already have sponsors from the same industry when they establish a sponsor network, but due to financial reasons category exclusivity cannot always be taken into account. Norum confirms this and continues to say that the clubs needs to look at the greater picture; becoming the only bank in the network adds a great deal of value to this one bank, and one sponsor might be able to contribute with more money than the five banks altogether. Hence, managing a successful sponsor network can create difficult tradeoffs. Nevertheless, category exclusivity can increase the sponsor object s sincerity. Speed and Thompson (2000) suggests that a sponsor that is motivated by philanthropy, rather than by purely commercial reasons, are seen as more sincere, and achieve superior responses to their sponsorship. The same can be applied for the sponsor object. Category exclusivity is a way to show the sponsors that the object is sincere in creating a network that benefit each and every sponsor, instead of focusing on the sponsors that can pay the highest fee. The question is how valuable the sponsor network is, compared to the traditional sponsorship activities. Hence, one of the objectives in this thesis is to establish if the sponsors that are part of a sponsor network are more satisfied with their sponsorship, than those who are not part of a sponsor network. H3b: Sponsors participating in a Sponsor Network is more satisfied with the Sponsorship, than sponsors not participating in a Sponsor Network 2. Relationship Building Hospitality Traditional Hospitality Hospitality is one of many ways to activate a sponsorship. However, few studies, to our knowledge, have been performed about hospitality as a single case. However, the popularity of hospitality as an activational method is researched in 2007, by IEG. Their results place Hospitality as the fourth most popular activation method, which was used by 67% of the sample studied. The 9

12 two most used activations are traditional methods are advertising (79%) and public relations (76%) (IEG Report, 2007). One definition on hospitality is done by the Mintel group through their industrial report on hospitality, and describes the term as any event for the benefit of an organization entertaining clients or staff, or prospective clients, at the organisation s expense (Mintel 2008). Sponsors engage in hospitality event for basically three reasons; to maintain or increase revenue, to reinforce customer relationships, or to reward key employees ( Kahle, P. and Kambare (1997) confirms that hospitality can be a portal to relationship building, and have found that relationships can be created through talk about common interest and values. This can be a way to overcome obstacles of having seemingly nothing in common, and the sponsorship therefore becomes a vehicle to create a closer contact between the sponsor and their clients/customers/employees. Strengthening of cooperation between different parties on a hospitality event, is also discussed by Shoman and R. (1996). Examples of hospitality Samsung was one of the sponsors of the Olympic Games in Sydney, Their program was mainly two folded; they offered the athlete s family host program and the share the moment call program. The first- mentioned program gave approximately 1500 athlete members from 123 countries access to stay with local host families in Sydney, while the latter enabled athletes to phone friends and family wherever in the world. Samsung experienced several positive returns on their hospitality investment; 5% rise in awareness for their wireless telecommunication products; 3 % rise in attitude towards the brand and a substantial increase in wireless sales. ( Another illustrative example of successful hospitality includes hospitality for both external and internal partners in a sponsorship. During the Olympics in 2008, Lenovo played host to thousands of key customers, stakeholders, board members, business partners and winners of consumer contests. Lenovo guests included 586 visitors from outside China, hosted in four waves. Programs ranged from attendance at sporting events and ceremonies to leisure activities, 10

13 gala dinners and business events. Thanks to its relationship with BOCOG (the Beijing Olympic Organizing Committee), Lenovo was able to provide guests with more premium tickets, passes and access than other sponsors. Post-event hospitality surveys show a near perfect score, with overwhelming praise from customers, partners and executives who attended (Ladousse 2009). This leads us to the following hypothesis: H4a: Hospitality increases the Sponsors satisfaction with the Sponsorship Internal Hospitality To our knowledge limited research has been done on how sponsorship can affect the employee s behavior, although a part of the sponsorship contract is commonly used to motivate employees by e.g. inviting them to events (Rifon et al. 2004). Motivating employees can be seen as an internal marketing activity done by the sponsor company. Berry and Parasuraman (1991) define internal marketing as: attracting, developing, motivating and retaining qualified employees through job-products that satisfy their needs. Hickman et al. (2010) found support for increased organizational commitment when organizational goals and employees are included in the sponsorship strategy. Paal Sprakehaug in Nordea believes that being a sponsor for Vålerenga creates a sense of pride for his employees. He furthermore highlights the joy his employees feel when they get tickets and autographs. The feedback from hospitality arrangement has, according to him, only been positive. This leads us to the following hypothesis: H4b: Internal Hospitality increases the Sponsors satisfaction with the Sponsorship 3. Economical and Managerial Tidiness According to Thjømøe (2010) the sponsored objects understanding and management of sponsorship can be inadequate, especially objects within the cultural sector. Moreover, many mangers of sponsoring stops there managerial control after defining their objectives; where planning, coordination and feedback processes are carried out (Thjømøe et al., 2002). Lack of accountability within sponsorship is a related problem, and Delaney and Guilding (2010) finds through in-depth interviews three reasons for this; most 11

14 outcomes of sponsorship is intangible, thus being difficult to budget and fund; the cash flow is difficult to measure and quantify; and sponsors do not set aside enough money to pursue a holistic management process of sponsorship. Large soccer clubs in Norway like Rosenborg and Vålerenga have professional negotiators with the knowledge of what a sponsor wants in return from their investment. But this was not always the case; according to Norum, Vålerenga was once inexperienced in the sponsor field and the members of their management was mostly motivated by affection towards the team rather than their economical and managerial expertise. Vålerenga started up their network in 2002 with the help from Rune Hansen, but it took them four years to comprehend the concept of sponsor networks (Christin Lillegrend). Lillegrend continues to say that this challenge currently exists in other soccer clubs as well. Cleaning up the clubs management has become one of their major tasks before they can help them to build a Sponsor Network. According to Paal Sprakehaug in Nordea, the sponsor objects ability to document their ROI of the sponsorship money is an absolute requirement. This leads us to the following hypothesis: H5: The Sponsor Object s Focus on Economical and Managerial Tidiness are important issues that are influencing the Sponsors satisfaction with the Sponsorship 4. Visibility Visibility is defined as the visibility of sponsor s logo/corporate name at events, TV and web-sites (Thjømøe 2010). In traditional sponsorship, measures of visibility are the most common way of assessing the consumer impact (Crimmins and Horn 1996; Tomasini, Frye and Stotlar 2004). How these favorable outcomes are created can be explained by the psychological phenomenon The Mere Exposure Effect. This phenomenon implies that when a person is experiencing repeated exposure of a stimulus, the more likely is he/she to like it or develop stronger preferences for it (psychcentral.com). Later this phenomenon has been studied and applied in a wide array of situations and subjects. In a research conducted by Bennett (1999), it was found existence of this mere exposure effect in a sport sponsorship setting. 12

15 Spectators who were able to recall the brand, developed increased favorable awareness and image of the sponsor brand, compared to those who were not able to recall it. Similar evidence of the mere exposure effect is found in other studies (e.g. Olson and Thjømøe (2003)). Together with awareness an image transfer, Coppetti et al. (2009) also finds support for increased brand evaluation and more favorable attitudes towards the brand. Since the majority of researchers assess visibility as one of the most valuable outcomes of a sponsorship, we assume that visibility is an important element in the sponsorship, and will increase the sponsors satisfaction. This leads us to the following hypothesis: H6: Higher Visibility increase the Sponsors satisfaction with the Sponsorship 5. Community and values Fit in a sponsorship context has earlier been defined as the degree to which attributes, between sponsor and the object, is perceived to be a match (Becker- Olsen 2006). As stated by Thjømøe and Olson (2011), the majority of sponsorship research finds that the perceived overall fit between sponsor and object is important for a sponsorship arrangement to be effective In this paper we are looking at fit with between sponsor and object, with a particular view on similarities in altruism and shared values. Bendapudi, Singh and Bendapudi (1996); Rifon et al. (2004) explains altruism as a motivated behavior which increases the welfare of others, and is the opposite of egoism. For example, Vålerenga are working to fight racism in Oslo while Rosenborg soccer club is supporting the community through cooperation with the two charities Kirkens bymisjon and Frelsesarmeen. Paal Sprakehaug in Nordea emphasizes the importance of identification and values, saying Nordea would never be a sponsor for a club the company cannot identify with. Furthermore he underlies how important shared values are, and uses Vålerengas position against racism as an example. Nordea would never sponsor a team with bad reputation. According to Gwinner and Eaton (1999) the preexisting associations held by the consumers regarding the team will become linked with the sponsoring brand. 13

16 Lars Erik Norum in ALD stresses how important shared values are, and the importance of trusting that the sponsor object is behaving and thereby not creating bad associations connected to their brand through the media. Norum continues to say that an important factor for sponsoring the swimmer Ingvild Snildal is because they trust her and that she is important for the local community. This leads us to the following hypothesis: H7: The Sponsor Object s ability to share values and altruistic mindset increases the Sponsor s satisfaction with the Sponsorship Satisfaction We have chosen to use satisfaction as the dependent variable for our analysis since our goal with this paper is to measure the sponsors preferability for the object they sponsor based on the mentioned factors. To measure the sponsors benefit from the investment in the objects, it would be optimal to measure the profitability of the investment, but this is impossible to measure due to lack of information and data. Most of the methods of measuring sponsorship profitability are not documented and thereby unverified (Thjømøe 2010). However, the term satisfaction has been widely used as an outcome variable in prior research. The term has also been shown to be connected to profitability. Helgesen (2006) finds a positive relationship between satisfaction and loyalty, shown in his research. Ultimately, he finds a positive relationship between loyalty and profitability. Thus, if sponsor objects are able to provide satisfaction to the sponsors, we assume it will, in the long run, lead to profitability. Sponsor Network in Norwegian Soccer Clubs Soccer clubs in the Norwegian Tippeliga (SCNT) is the best example in Norway where sponsor networks have been implemented. Therefore this environment is used as a basis to test our hypotheses, cooperating closely with the Norwegian networking company LinkT presented below. We have taken use of both qualitative and quantitative techniques in order to answer the hypothesis. 14

17 LinkT s experience with relationship building LinkT is a company founded in 2011 by Rune Hansen and Christin Lillegrend. LinkT is providing services whose goal is to connect parties of the business industry, culture and sports, to create added value for the parties involved. They possess competence within markets, networks, and relationship development in particular. The company also holds competence within sales, business development, project management, and activation. LinkT is providing services within the B2B market and has two primary customer groups: (1) they are offering services to make sponsor objects more attractive for sponsors, and (2) they help companies to get a greater return on their investment in a sponsorship agreement. The latter does include analysing the company`s value potential, help to develop a clear market profile and to make their sponsoring more effective to reach consumers. Furthermore, LinkT contributes with a platform where collaboration between the object s sponsors can be strengthened. In other words, LinkT focus on activation for customer groups, sponsors and sponsor objects. One of LinkT s most successful networks was built for Vålerenga Soccer Club and they are currently building networks with several other SCNT s. Vålerenga introduced their network in 2001, with Rune Hansen in the lead. At this time, the demands for LinkT s services were high. Together with the clubs, LinkT found a few criteria that had to be met for such a network to work. First of all, to be effective, every participant had to be aware that buying and selling in the network had to be reciprocal. A problem which often occurs is that some sponsors are only looking for a platform where they can sell their services and products, and are not interested in buying from other sponsors. This behavior is usually obvious to the other sponsors in the network, and the sponsor will end up with a network where none of the other sponsors wishes to buy their service or product. In the long run, this will not work, since the network is built on this give and take concept and i n worst case they will end up with a worthless network, and leave. A second criterion is branch exclusivity, which mean that only one sponsor from each industry can be in the network. Thus, the sponsors services and products should be 15

18 complementary rather than overlapping. To increase the network s value to the sponsors, it is important to have sponsors from as many industries as possible. A third criterion is that when the sponsors are about to buy a new service or product, and this service or product is provided by a member of the network, they are obliged to choose the company in the network. A fourth criterion is that decision makers from the sponsor companies must be present, preferably the same person every time. This is to ensure relationship building. A fifth criterion is that new sponsors must come in as time goes by, since in every company there is a saturation point for how much they can exchange of products and services. The last criterion is that there is a combination of informal and formal meetings. With a well-established network, the benefits seem to be several; companies can easily get in touch with decision makers and thus avoid cold calls, over time they can build relationships and trust, and it is also possible to exploit the benefits of each other s network, so called network on network. In practice, network meetings are held four times per year with approximately 80 participants from different sponsor companies. Often, the meetings are twofold with formal meetings during day and social activities during the evening. The formal meetings have a similar concept as speed-dating. Every sponsor will have a short meeting with 6-8 other sponsors during the day. The sponsors rarely meet the same company twice; in this setting therefore it is the sponsor s responsibility to book a second meeting if they want to build a relationship with a company they interact with on a network meeting. The sponsors can also initiate meetings with other sponsors, even though they never have met in a network meeting. And since they are part of the same network, these calls are much more preferred than so called cold-calls. Hypotheses As mentioned, our main intention with this paper is to study if a sponsor network can increase the sponsor s satisfaction with their sponsorship, in comparison to traditional sponsor activities. We also wish to examine if there is a connection between the number of activational methods used by the sponsors, and how the sponsors allocate their resources (H1). The eight following 16

19 hypothesis summarize the discussion of the effects priming on sponsorship satisfaction: Nbr Activity Hypothesis H1 Activation Sponsors who take use of several sponsor-activities, spend more money on activation, than those who participate in fewer activities H2a Network The size of the Sponsor Network increases the Sponsors satisfaction with the sponsorship H2b Network The Quality of the Sponsor Network increases the Sponsors satisfaction with the sponsorship H3a Network A Sponsor Network increases the Sponsors satisfaction with the Sponsorship H3b Network Sponsors participating in a Sponsor Network is more satisfied with the Sponsorship, than sponsors not participating in a Sponsor Network H4a Hospitality Hospitality increases the Sponsors satisfaction with the Sponsorship H4b Internal Hospitality Internal Hospitality increases the Sponsors satisfaction with the Sponsorship H5 Economical & Managerial Tidiness The Sponsor Object s Focus on Economical and Managerial Tidiness are important issues that are influencing the Sponsors satisfaction with the Sponsorship H6 Visibility Higher Visibility increase the Sponsors satisfaction with the H7 Table 1 Community and Values Sponsorship The Sponsor Object s ability to share values and altruistic mindset increases the Sponsor s satisfaction with the Sponsorship Methodology In depth Interviews Four in-depth interviews were conducted with sponsors and sponsor objects in Tippeligaen, and one in-depth interview with Christin Lillegrend at LinkT. A semi- structured interview guide was developed and used during the interviews. Through the interviews we obtained a clearer view on how the sponsors think, and which values (attributes) they find important in a sport sponsorship contract. Both sponsors and sponsors objects were interviewed to obtain a broader view of sponsorship, with a particular interest in sponsor networks. The qualitative research was critical in our development of a quantitative measurement. Sample and Questionnaire Altogether, Norwegian SCNT has 1896 sponsors, consisting of 1515 different companies. Out of these, 1104 (73%) are part of one or several networks. The 17

20 numbers are collected from SCNT s web pages, and all data is from A web- based questionnaire was developed and randomly distributed to approximately 300 respondents of this population. With 75 responses our response rate is 25%. Our sample includes 5 % of all sponsors of SCNT. The answer to the question How is your position in the company related to sponsors issues, grouped respondents into four groups: Lead managers 57.3%, Shared Management 29.3%, Supervised Managers 9.3% and Only Knowledge 4%. The majority (86.6%) of our sample have direct management responsibility for their businesses sponsor related issues. Respondents without knowledge where automatically thrown out of the questionnaire. As mentioned, 73% of the sponsors of SCNT are in a sponsor network. In our sample, 76% of all respondent answered that their company are using Networking as activation. This, along with a standard error of 0.05, should indicate that our sample is a good representation of businesses sponsoring SCNT. The questionnaire consists of an introduction presenting the researchers and explaining the goal of the questionnaire; to assess the value of a sponsorship agreement. The questionnaire is threefold. Part one focuses on the respondent s and the respondents company s experience with sponsorship, and a question for our dependent variable Total Satisfaction (How satisfied are you with your most important sponsorship contract(s)?). Thereafter follows a description of activation, and questions about the respondent s/the respondents company s experience with activation. Part two focuses on the subjects Hospitality, Visibility, Community and Values, and Economical and Managerial Tidiness. Part three introduces a brief explanation of sponsor networks, followed by questions regarding the respondent s/the respondents company s experience with sponsor networks. Thereafter the respondents were asked to answer statements about sponsor network. If the respondents did not have experience with sponsor network, the respondents were asked to answer hypothetically. The last page featured three questions regarding satisfaction with sponsorship and sponsor network, concluding with a box leaving the respondent free to comment. The majority of the data was collected using a 18

21 likert scale, with a few exceptions using nominal or interval scale (questions that categorize the respondents). The topics Total Satisfaction, Hospitality, Visibility, Community and Values, and Economical and Managerial Tidiness were represented with 3-8 questions. Moreover, our focus area, Sponsor Network, was represented with 18 questions. These questions include the following themes; network quality, network size, relationship building, sharing of competence and information, and business development. The questions regarding experience was measured on a nominal scale and the other questions were measured on an ordinal Likert scale (1 not important, to 7 very important). The questions regarding satisfaction was included both in the beginning and in the end to make sure the questionnaire did not cloud the respondent s judgment. Initial data analysis We conducted a factor analysis to analyze the items relationships and to reduce them to distinct factors. All factor loadings above 0.5 were accepted, and the rest were removed. Cross loadings were also taken out, and the factor analysis was run again until there was no cross loadings left. A Cronbach s alpha analysis was then conducted to test the reliability of each factor. Overall, cronbach s alpha value was shown to be good, ranging from to According to Hair et al. (2010), a cronbach alpha above 0.6 is acceptable. The following factors were found, representing the underlying items and their factor loadings shown in brackets: 1. Relationship Building a. How important is activation for your sponsoring activities? (0.745) b. We get closer relationships with clients during sponsored events (0.736 c. A sponsor network is very valuable for our business (0.719) d. Sharing of information through a sponsor network is valuable for our company (0.630) e. Relationship Building is important for my business (0.612) f. The professional aspect of sponsor networks is important (0.609) 19

22 g. We frequently bring our most important clients/customers to events (0.589) h. A sponsor network can open doors to new customers and suppliers (0.567) i. Hospitality is a very important part of our sponsoring (0.546) 2. Network Quality a. The quality of the sponsor network is more important than the ranking/performance of the event/organization we sponsor (0.901) b. The quality of the sponsor network would be more important than the popularity of the event/organization we sponsor (0.830) c. The quality of the sponsor network is more important than the size of the event/organization we sponsor (0.813) d. It is important that the sponsor network(s) we belong to contain a wide variety of representatives from many industries and types of business (0.682) e. Evening meetings that occur after sponsor network meetings are important (0.657) f. We do important business with our clients during sponsored events (0.623) 3. Economical and Managerial Tidiness a. It is important that the things we sponsor are financially secure (0.818) b. It is important that the things we sponsor are professionally organized 0.796) c. It is important that the things we sponsor are able to provide proof about the value of our sponsorship each year (0.785) d. It is important that the things we sponsor are cooperative in meeting our needs (0.540) 4. Visibility a. It is important that our corporate name/logo is visible at the events we sponsor (0.895) b. It is important that the things we sponsor and our name/logo are visible to the public (0.880) c. Having our name/logo visible at sponsored events increases the value of our brand name (0.852) 5. Internal Hospitality a. We use sponsorship hospitality for team building reasons (0.846) 20

23 b. We use sponsorship hospitality to motivate our employees (0.835) c. We frequently bring employees to events (0.818) d. It is important for us that we get tickets so we can bring our customers and/or employees to events we sponsor (0.697) 6. Community and Values a. Our company has a responsibility to support the community (0.834) b. It is important that the things we sponsor are important to the community (0.766) c. It is important that the things we sponsor share our company s value (0.676) d. It is important that the things we sponsor communicate the same (0.535) 7. Network Size a. The sponsor network must be of considerable size to bring value to our company (0.775) b. The number of sponsors in a sponsor network is important for the value of the network (0.726) 8. Total Satisfaction a. How satisfied are you with your most important sponsorship contract(s)? (0.547) b. Think about your most important sponsorship contract. How satisfied are you with this sponsorship, all in all? (0.515) The factors were used in a series of statistical tests, using SPSS, presented in the results below. Results Hypothesis H1 To answer our first hypothesis H1: Sponsors who take use of several sponsor- activities, spend more money on activation than those who participate in fewer activities we have used the four dummies representing which activities the respondents already use, and analyzed the following : Approximately how much of the sponsorship budget do you spend on activating the sponsorship? (Item 9). The respondents answered either yes or no to the four activities (dummies): Networking, Hospitality, Charity, Community and Values (hereby called CCV); and Marketing Activities. We calculated a new variable called 21

24 NumberOfActivities, by adding up the four activities for each respondent. If the respondents answered No on one activity, this would give the value 0; if they answered Yes it would give the value 1. All respondents used at least one activity. The test Multiple Comparisons was used to test if there were any significant difference between the groups using 1, 2, 3 or 4 activities, using item 9 as the dependent variable. From our analysis, we found significant differences between the sponsors using four activities, and the sponsors using 1-3 activities. We did not find any significant differences between the groups using less than four activities (i.e. between the groups using 1 or 2 activities). A one way anova test was applied to see how much the different groups spend of their budget on average. The sponsors using four activities spend 60.6% of the budget on activation, compared to an average of 38.6% for the sponsors using less than four activities (table 2). % of budget spent on activation by number of activities Number of activities Number of respondents % of budget spent on activation % ,3% % ,6% Table 2 A descriptives test showed that 76% of our respondents are using Networking as an activational method, 61% are using Marketing Activities, 57% are using Hospitality, and 43% are using CCV. Last, we found how high percentage of the sponsorship budget the respondents spend on activation, relying on the single activities they are or are not using. The largest difference is between respondents using CCV, and those who are not using it (17.3%). We can confirm that sponsors using four activities are spending a higher percentage of their budget on activation than those who are using less than four activities. H1 is therefore partially supported. Hypothesis H2 & H4b H7 Hypothesis H2a (Network Size), H2b (Network Quality), H4b (Internal Hospitality), H5 (Tidiness), H6 (Visibility), and H7 (Community & Values) are 22

25 each represented with a variable from the factor analysis, and can therefore be tested with a multiple linear regression analysis. With the current factors, we are not able to answer hypothesis H3a (Sponsor Network) and H4a (Hospitality Importance) in this regression. However, the factor Relationship Building contain items regarding both hospitality and sponsor networks, hence the factor is split into the two new variables called Sponsor Network and Hospitality Importance. These two new variables contain answers from all respondents, meaning that we have not split the data set. Sponsor Network, contains the following items from the Relationship building variable: Sponsor Network: 36) Relationship building is important for my business 37) A sponsor network is very valuable for our business 38) A sponsor network can open doors to new customers and suppliers 39) Sharing of information with other sponsors through a sponsor network is valuable to our company 41) The professional aspect of sponsor networks is important Item 36 is placed accordingly due to the questionnaires focus on network in this section, which was also communicated to the respondent. Hospitality Importance contains the following items from the Relationship variable: Hospitality Importance: 11) Hospitality is a very important part of our sponsoring. 13) We frequently bring our most important clients/customers to events 15) We get closer relationships with clients during sponsored events We left out item 10: How important is activation for your sponsoring activities? due to it being impossible to place between the two ranges. A t-test showed that there is significant difference between the two variables. The two variables have a correlation of 0.593, which is classified as moderate correlation. 23