Acronym

I enjoyed the article a lot, and have been faced with this numerous times, twice this year already! I think the best point I remembered from the comments was the need for analysis, in terms of having such a significant portion of revenue locked up in one client or sponsor--we should always be searching for new relationships. It is human nature to take a big sponsor for granted, and it is a horrible feeling to have the rug swept from under you; but supporting such a client, even when they are on a tighter budget, might be the best road to go down--you do have to balance fairness, but let's face it, some sponsors are more important to the vitalitiy and growth of the association than others; simply saying 'no' because you have set a certain price on a certain item feels like a shallower response, perhaps the better question is how do you keep the sponsor engaged and generate revenue for them, while adding value to your association?...What knowledge, assets, or skills can they leverage that your association and its members can benefit from, instead of just money? If they become a simple dollar sign, you will lose them eventually anyway, and there is a natural cycle of investment, pulling back, etc. How do we make them partners and tie their success to ours?

I'm struck by the fact that this situation comes as a surprise to the association. I'm also struck by the fact that the loss of a single sponsor would cause a budgetary impact sufficient to warrant discussion at a board meeting. But mostly I'm struck by the management failures that allowed this situation to come to pass.

There are lots of ways the phrase "that's how we've done it in the past" can rise up to bite an association, and this appears to be another example of this. Sponsor dollars are among the softest and most tenuous sources of revenue for any association. With the handwriting on the wall (bad economy, Wall Street meltdown), this should have been foreseen as a possibility, particularly if it had important implications for the association's budget. If the staff person wasn't factoring this in at budget time, where was the CEO or the Finance Committee?

Aisha failed because she should have at least reached out to the sponsor when she was putting together her budget to determine where their support level would be this year. Relying on past behavior is always risky. Her CEO failed by not confirming the reliability of the revenue streams Aisha's budget projected. So did the Finance Committee.

It's easy to be an armchair quarterback here, but basing important association initiatives on such a shaky source of revenue (particularly when it wasn't confirmed when the budget was made) suggests a dangerous level of complacency for all concerned.

It would also be a mistake to give the sponsor the recognition they are asking for one third of the money. Essentially they are trying to have their cake and eat it too. To give them what they are asking is not only unfair to other sponsors, it also establishes them as the dominant player in the relationship instead of a partner. Unless the sponsor is willing to commit in writing that they will return to previous levels of support in the next year, the association has absolutely no leverage in getting them to raise their future support to previous years' levels.

Too many associations see sponsorships as some type of corporate charity or loyalty to the association, rather than viewing them for what they are -- business decisions. It's simple. If a company sees your sponsorship opportunity as a good use of their marketing dollars, they will buy it. If they don't, they won't.

Aisha should regain equal footing in the relationship by refusing the sponsor's unreasonable request for continued high recognition. The sponsor clearly doesn't want to have their reduced support be seen by the association's stakeholders as an indication of their own financial difficulties. That should give Aisha leverage in when she presents a counter-offer.

I felt of few of the comments related to the Executive Director/Aisha were a bit too harsh. With so many cutbacks happening in the economy there are sure to be cases where the relationship between the association and the supplier are good, communications consistent, even contract commitments signed and then the supplier comes back and says "we just don't have the money this year". As commented earlier by my colleague, this has happened to us this year. Not by the largest supporters we have, but certainly any committed dollars that are not realized has an impact. I think flexibility with the supplier is key and Aisha showed that in her responses.

I did enjoy the dialogue between the board, finance committee, as that is often very typical discussions in my experience.

It would be interesting to see any of the studies that Scott Oser referenced in his comment about organizations cutting back on promotions being the last ones to recover.

Hi Tina,

Links to those studies are all over the web. I just googled marketing during a recession and some great links popped up that had embedded links that went to many of the tried and true studies and also many new ones that have popped up recently. Some links I found include:
http://blogs.bnet.com/intercom/?p=1573,
http://www.membershipmarketing.blogspot.com/2009/06/what-research-says-about-marketing.html and http://www.netstrategies.com/articles/proven-strategies-to-survive-recession.html. There are lots more out there.

Hope this helps.

Scott