Sponsorship can be a very cost-effective way for companies to promote their products and services to a group of people they are not yet doing business with.

The ideal scenario when working out the value your association holds to a potential partner is that you already have a strong relationship and can ask them directly. It’s not always that easy though is it?

Another way to estimate the value of your membership to a potential partner is to calculate it. Let’s use an association that has members who own high-rise accommodation buildings and a paint company as the potential partner as an example. In order to work out the value of this partnership, the association would need to find out the following information:

• Approximate cost of getting one high-rise building painted
• How many members there are in the organisation
• How often a high-rise building might need to be repainted.

Once this information has been gathered, crunching the numbers might look something like this:

If this partner was able to get 100 per cent of its members to use the paint company’s services and products, they could potentially make $10 million each year. However, 100 per cent market penetration isn’t attainable so a conservative figure to work on over the first 1–3 years of a partnership is 10 per cent market penetration.

If a potential paint partner was considering an exclusive partnership with the association, then the organisation would know that it might be possible to deliver them a 10 per cent market share on top of what they might already have, and this amount would be approximately $1 million.

Knowing that the association has the potential to deliver $1 million per year to a corporate partner, would it still value its proposal at $5,000–$10,000 per year.

It’s important to remember that, for some companies, your association’s membership might only represent a portion of their target market so do your research and value the partnership accordingly.