Column
18
June 2019
The perils of commission-based
sponsorship agencies
Brightelm’s Rob Eveleigh considers another side
to the agency commission debate
s an industry, we often talk
with a great deal of passion
about venue commission.
Many individuals and
organisations have differing opinions on
not just its value, but also whether it is
ethical.
Another area of contention is the rise of
the commission-based sponsorship agency,
where the smooth-talking sales rep tells
you that for a mere 20% they will work
wonders, raise tons of cash and ensure the
event was a success on every level. The
reality, though, can be rather different.
I recently met a prospective new client
– let’s call him Fred – who was a victim
of the commission-based sponsorship
agency. Victim sounds a strong word, but in
this case it is very apt, as after six months
nothing had been raised at all and the
event had to be cancelled, resulting in the
loss of a £10,000 venue deposit and much
good will.
There is certainly a case to be made for
the fact that the client should have been
more on top of things, but that doesn’t
absolve the agency for their lack of care,
effort or professionalism. On reviewing
their efforts, it was clear that no time had
been spent understanding Fred’s market
place - the agency didn’t review what was
on offer, understand the event or consider
leveraging the existing relationships that
Fred had previously nurtured.
Commercially, it is clear to see what
happened to Fred and several other
clients I now work with, who chose the
commission-based agency model. These
agencies are ultimately taking on each
client at their own risk – if they don’t make
the sales, they don’t get the income.
However, that risk is not limited to just
the agency, and a failure to deliver puts the
whole event under financial strain. Time
is money to these agencies, and there is no
guarantee of a return as pure commission
contracts need to prove themselves as
having value to the agency.
Fast and loose
If there is no income after an initial time
investment of a few days, the commission-
based agency will rapidly lose interest in
the project. Then they win something new
with easier targets, and the more difficult
job gets ignored.
Part of the challenge is that sponsorship
sales are about relationships, time, effort
and long-term pipeline development.
It is easy to see where the system falls
down with a commission-based agency
needing to make sales today to pay salaries
tomorrow, rather than in three, six or even
12 months’ time.
Unfortunately some good reports, client
management and fast-talking means Fred
didn’t realise there was a problem until the
agency was three months into their work,
losing him a significant amount of time to
deliver event-critical sponsorship.
It’s very simple. The most successful
organiser/sponsor relationships come with
time, and that time requires an investment.
It doesn’t just happen overnight, and the
best deals can be years in the making.
Paying a time-based fee to a sponsorship
professional guarantees that time is set
aside, relationships are nurtured and
ultimately come to fruition. The time-
based agency focuses on winning revenue
for the event, rather than seeking and
failing to contribute to agency profits.