About Kim Skildum-Reid States,
I received a rather alarming email this week. It was from someone who was the victim of what I can only call a scam from someone purporting to be a sponsorship broker. Upon further investigation, it looks like a lot of people have been burned by this person. This is the first I’ve heard of something like this, and I can only hope this “broker” is the only one out there operating in this manner, but something tells me there could be more. This is the set-up:
- A sponsorship “broker” claims that if you pay a few hundred or a few thousand dollars, s/he will guarantee sponsorship for your property of at least $X.
- You pay, and no sponsorship materialises.
- Many broken promises ensue. Claims of misplaced contracts. Claims of having a signed deal with a sponsor that is just about to pay. Excuses galore, and still no money. And because it was guaranteed, you have been counting on it as cash flow for your property, and now you’re short and desperate.
While I am definitely sympathetic with people who have been burned in this manner, this is certainly a case of an offer being too good to be true. No one can guarantee that you will get a certain amount of sponsorship for you – there are simply too many variables at play. And if they believe what you have is truly saleable, they would be charging a commission on the sponsorship they bring in, not charging you up-front. It is true that many brokers do charge a nominal fee up-front to get a property ready for sale, but that is a small fraction of the commission on the projected sales, which is the real driver for performance by those brokers.
In this case, I’ve done some poking around, and in amongst the many, many people who have seen no financial return at all, there is a small handful that seem happy. I have no idea why they got what they want and so many others have been left out in the cold, but the phrase “pyramid scheme” did cross my mind.
In the interest of clarifying the ins and outs of sponsorship brokers, here are some quick guidelines:
- Sponsorship brokers make the lion’s share of money as a commission on sponsorship sales. Getting you the maximum amount of money for your property is their motivation.
- Sponsorship brokers are well-connected and spend a lot of time nurturing their relationships with corporate decision-makers. The primary focus of their marketing efforts is around positioning the properties they represent for sponsorship, not getting properties to sign up with them and hand over cash.
- Sponsorship brokers take the time to understand the needs of a sponsor and create offers around your property that are absolutely appropriate for them. They do not sell one large sponsorship and divvy it up among the stakeholders, whoever they may be. No genuine sponsor would go for it – it’s too arbitrary and not leverageable.
- Sponsorship brokers of any merit will behave as professionals, not engage in snarky tit-for-tat with disgruntled customers all over the web.
- Sponsorship brokers will not be interested in selling rats-and-mice sponsorship. If you don’t have an opportunity that is genuinely worth their while selling – we’re talking tens or hundreds of thousands of dollars, at minimum, depending on the broker – they won’t take you on and you will need to sell it yourself. Sorry, people… sometimes the truth hurts.
I have a few resources that may be helpful for those of you looking for, or working with, brokers:
- Power Sponsorship’s Broker Registry – It’s not everyone, but it is a start!
- Cheat Sheet: Questions to Ask Before You Hire a Broker (PDF)
- How Much Should You Pay a Sponsorship Broker (blog)
If you end up having to sell sponsorship yourself, and don’t know where to start, I suggest:
- Best Practice Baby Steps for Sponsorship Seekers (blog) – Lots of resources listed here.
- The Sponsorship Seeker’s Toolkit 4th Edition
- Power Sponsorship Jump Start – If you are genuinely looking for significant sponsorship and can’t find an appropriate broker, this may be an option to get you started.
I wish all of you out there the best of luck, whether you are trying to sell sponsorship, trying to find an appropriate broker, or trying to recover from a broker’s broken promises.
