Sports sponsorships: When do they make sense for healthcare organizations?
With baseball, soccer and the NBA playoffs in full swing, this is the perfect time to write about the value of sports sponsorships for a healthcare organization. In short, when – if ever – does sponsoring a professional sports team or venue make sense?
Health systems and insurers who are not entering into these arrangements seem to be the rule, rather than the exception, these days. In fact, three of the four organizations that I’ve worked for have negotiated significant sponsorships with professional sports franchises. If your organization is considering this type of sponsorship, this article will help you approach it carefully.
When you should go for it
Reason one: You have little to no name recognition
In this scenario, your organization might be entering into a new market or undertaking a significant rebrand. This happened when ODS Health Plans – where I worked in Portland, Oregon from 2001-2007 – rebranded as Moda Health. The company went from decent name awareness to almost zero name awareness overnight when they made the change in 2013.
To help establish name recognition they entered into a very visible partnership with the local NBA franchise, the Portland Trailblazers. The partnership included renaming the Rose Garden arena as the Moda Center as part of a 10-year, $40 million deal. Instantly, the rebranded company got a tremendous amount of brand exposure from news media stories as well as year-long advertising as every major attraction from Taylor Swift to the WWE to the NBA promoted the location.
In a news story about the deal, Moda executives explained the investment:
“Without our rebranding, we probably would not have done this. The rebranding is where the synergy is. The goal is really to enhance our brand recognition, and along with that we’ll definitely increase our market share.”
Reason two: You’re going to do more than slap your name on a building or a jersey
While I was working at Providence Health & Services in 2014, the company began talking with MLS franchise the Portland Timbers about a deal that would include sponsoring the team, renaming the historic city stadium as Providence Park and integrating a sports care clinic on site.
Because Providence had tremendous name recognition and strong market share, I was somewhat skeptical of the possible deal given the cost. However, our leadership had a vision of the sponsorship being about developing a community partnership to promote health and wellness. They backed it up by allocating resources to deliver on that vision. As then-CEO Dave Underinner said at the time:
"We were looking at how to position Providence differently around health and wellness — not just illness. How do we position Providence around wellness and health? Being in the community, this made a lot of sense. This is a great opportunity for us."
When you better think twice
Reason one: You can’t afford it.
I know what you’re thinking … well, duh. This point seems obvious, but many national organizations have had to embarrassingly back out of long-term agreements. These deals, especially arena/stadium sponsorships, are expensive and they typically run for at least a decade. If your organization runs into tough financial times the sports sponsorship is going to be the most obvious target for cost-cutting and your decision will be painfully public.
Reason two: You can’t defend it to your key audiences
As mentioned above these sponsorships are expensive and visible. Your customers, partners and employees are going to question the wisdom of doing any deal like this. Every dollar spent on a sports sponsorship will be argued as money that could lower costs or pay employees more. Economists have also sent out some worrying signals about trying to connect sports partnerships to increased profitability. From a 2018 blog post by Samford University:
Michael Leeds, a sports economist at Temple University, conducted a study published as “A Stadium by Any Other Name: The Value of Naming Rights,” in which he examined 25 years of data and came to the conclusion that, “We find little evidence that the purchase of naming rights had a statistically, significant impact on the value of the companies that bought them, even less evidence that the impact was positive, and no evidence at all that there was a permanent, positive impact.”
In other words, you need to understand why you’re pursuing the sponsorship and tying it to directly driving business might not be the best way to go.
Reason three: You have no plan to measure the impact
Measuring results on these type of efforts are far more difficult than most traditional marketing avenues, but it is possible. If you’re going for awareness and preference for your brand, make sure you set a baseline before entering into any deals. If you’re trying to develop community partnerships, or driving health and wellness initiatives, make sure you have solid goals and objectives to measure. If volume to certain services like sports medicine is the goal, deploy patient surveys to see if the partnership affected their choice of your service.
Without some type of measurement plan in place, you will have little ability to evaluate the commitment when the contract comes up for renewal.
Reason four: FOMO
Fear of missing out is my least favorite reason to do anything. This is especially true when you are spending a lot of money and making a visible, public commitment to something. When a sports sponsorship opportunity comes up, you need to carefully establish your reasons to pursue it and ensure that you aren’t falling into the common traps above. Just because your competitor is willing to spend money on something, doesn't mean you should feel obligated to do the same.
Recent healthcare sponsorships: