Quantifying the ROI
The importance of corporate hospitality

Maximising and Measuring the Return on Investment

Media returns aside, sponsors were positive that Jump Racing delivers a return on investment on other fronts, which is good news in the current economic climate.

“I am satisfied in my own mind that the sponsorship has done a fantastic job for us with a lot of help from Cheltenham, who have been great with helping us with ideas.”

However, maximising returns will not just happen as a matter of course. It is important to leverage the sponsorship to its full potential and to work with the racecourses to get the most from an investment.

Leveraging the sponsorship package

Just over a quarter of sponsors (28%) spent additional budget on further leveraging the rights purchased, with nearly 30% of those sponsors spending the equivalent of over 30% of the sponsorship fee. A fifth (21%) spent an additional 5–10%; 14% spent up to 5% more; a further 14% spent between 11% and 15% more a final 14% spent between 21% and 30% more.

Half of the sponsors had engaged in other marketing linked to their Jump Racing sponsorship but not at Jump Racing events – for example, competitions to win Jump Racing tickets. Four-fifths found that additional activity valuable (80%), with a quarter finding it “extremely valuable”.

“Racecourses have found ways to of offer us better value and better opportunities to promote to a wider public.”
“We leverage as a validation of the sponsorship, not because of shortcomings in the package. In these economic tough times, it is even more important to leverage more.”
“Sponsorship can be just an entertainment or branding exercise if you don’t work to make it succeed. But if include it as a holistic part of your marketing then it can work and maximise its potential.”

Quantifying the ROI

Quantifying the actual ROI is somewhat more difficult, particularly when so much of the perceived benefit is intangible. For example, only 42% of sponsors measure sales or analyse sales leads generated through their involvement in Jump Racing. So how do sponsors quantify the effectiveness of their Jump Racing Sponsorship?
The majority (84%) measure the effectiveness of their sponsorship in some way, although not necessarily in a quantifiable manner:

66% evaluate feedback from client entertainment activities
36% undertake brand exposure measurements
34% analyse the overall media impact
30% take sales or distributor feedback into account
30% evaluate terrestrial TV coverage
14% measure online media exposure
12% listen to retailer feedback
8% measure Radio 5Live exposure and
2% measure exposure through live TV in bookmakers

When asked to quantify the estimated value of benefits received through their Jump Racing involvement, over a third of sponsors estimated their sponsorship to bring them benefits in excess of £250k. (See Figure 17.)

Obviously, these figures need to be put in context. Sponsorship of a midweek card at a small racecourse with Racing UK coverage is not going to bring the same measurable return on investment that a premium event on terrestrial television will yield.

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The importance of corporate hospitality

This type of local sponsorship will provide a focus for a day’s hospitality and an opportunity to showcase a brand to a local audience. Both of these are difficult benefits to value, yet undoubtedly bring something to a brand and, for some, are primary reasons behind choosing a sponsorship. As cited elsewhere in this report, 92% of sponsors cited corporate hospitality and entertainment opportunities as one of their top five reasons for investing in Jump Racing, while 66% wished to be associated with the sport to build or enhance local community relations.

With spending being curtailed and closely monitored within most companies, spend on corporate hospitality has to have a good business justification. Jump Racing sponsors have taken a pragmatic approach to this on two fronts.

First, there is an appreciation that customer loyalty from existing clients is a lot easier (and more cost effective) to secure than the acquisition of a new customer, so they see the value of entertainment as a marketing tool.

“One way we’ve had return on investment is that we’ve used the hospitality part of the sponsorship to nurture relationships with key customers and to retain customer loyalty.”

Secondly, some have adapted their approach to reflect a more prudent attitude towards expenditure. Guinness at the Cheltenham Festival is a prime example of this. Where once there was luxury travel by helicopter, now there is an experiential approach linked to the “Bring it to life” campaign, with a focus on the ‘money can’t buy’ up-close experience.

If the sponsor takes sensible measures, Jump Racing offers an opportunity for a solid return on investment on all fronts. This is reflected in the fact that 56% of sponsors consider Jump Racing to be a valuable part of their marketing strategy and nearly half (46%) consider their sponsorship
to be delivering a good return on investment.

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