What is the best way to evaluate the ROI of an endorsement deal?

The experience gained in the Spanish professional football market indicates that marketing is one of the areas that can most benefit from the adoption of existing trends in other markets. Currently sponsorship continues to be mostly national in which neither club nor company starts from a real professionalization of marketing campaigns. This ends up in a misunderstanding between club and company where both misses the objectives, set no KPIs and skips every reasonable terms. From the very first moment in the negotiation of a sponsorship agreement, the football club must take an active role in advising the sponsor on the reality behind the agreement advising them on potential impact, reasonable times and the best way to reach the objectives.

When working with sponsors in lower divisions, our 3 main objectives are: the increasal of i) direct sales, ii) potential clients database and iii) social network engagement. Our main KPIs are (necessarly): - For direct sales: cost per acquisition, incomes on direct sales, number of direct sales, churn rate, average order value and conversion rate. - For potential client database: number of new contacts, increase rate of the DB, quality of the leads, cost per lead and conversion rate lead-client. - For social networks: total engagement, increase in followers number, engagement rate, number of viewers and customer lifetime value projected from social networks engagement.

Having collected all the data possible, the sponsorship needs to be tracked regularly by both, club and sponsor. A good starting point would be a quaterly review of the KPIs and all the activations executed. This will allow us to adjust the actions and the plan for the rest of the season. If the performance is not good for two consecutive quaters, clearly club and sponsor missed the point and setted unrealistic objectives for the sponsorship. In this case, the strategy needs to be adjusted including, among others, new activations, a different way to communicate with the target and shorter terms for the reviews of the plan.

When assessing the ROI of an endorsement deal, you need to consider several factors. Firstly, analyze the financial metrics to calculate the direct revenue generated, including increased sales, brand visibility, and market share. Secondly, gauge the impact on brand awareness by measuring metrics like social media engagement, website traffic, and brand mentions in the media. Lastly, conduct a cost-benefit analysis to evaluate the overall profitability by weighing the cost of the endorsement deal against the benefits received. With these factors, you can make informed decisions about the effectiveness of your endorsement deals and refine future partnerships accordingly.

I suggest that you have to take into consideration the potential long-term impact of the endorsement on customer loyalty, returning business, and overall brand equity. Some benefits may not be immediately profitable or short-team measurable but can contribute to a success in the future.