Lesson in Failure

Failing can be a painful experience, one I’m sure nobody enjoys. However, I think we can all agree that some excellent lessons come from our failures – great and small – and sometimes from the failures of others. In my career I’ve had the luxury of experiencing many highs, and I am extremely thankful for all of them. But I really respect the lessons I’ve learned thanks to the things that haven’t gone to plan, have been a disaster, or have impacted my world.

I know now that I’ll never make the same mistakes again, or that at least whenever I’m faced with a similar scenario my brain will issue a warning: “Hang on, back it up, this feels familiar – in a bad way.”

These are just a few of the lessons I’ve learned from failure. I have not included the names of the organisations or individuals as I don’t feel it would add to your understanding.

1. UNDERSTAND PROPOSAL VALUATION AND PRICING MARGINS

Seeking partners can be exciting and when board members or leaders show an interest in getting involved, the process can feel a little easier (the more senior the connections, the easier it should be to secure a quick yes or no). But things can end badly when shiny things get in the way of the big picture – in particular the commercial realities of sponsorships.

We had a solid plan, we had put in the hard yards to build an asset register, costed it and priced the packages we were taking to market based on previous discussions. Everyone was feeling confident.

The relationship owner was one of the board members with a strong and senior connection at one of our key target brands, but despite advice to the contrary he insisted on attending the meeting alone. We thought, “What’s the worst that can happen?”

During the meeting the deal was done and everyone was excited – an ASX 100 brand with a lot of clout had agreed to sponsor a relatively small arts organisation.

Unfortunately, our excitement was short-lived as the deal was done for a fraction of the valuation of the package. The deal meant that only 20% of the fee would be available as working money – that is, we would have to spend 80% of the fee to service the deal!

In trying to get to the bottom of what happened we heard comments such as: “They didn’t have any more money,” “It’s better to have them as a partner than to lose them,” “I couldn’t offer a big brand like that a low-tier partner level,” and “An association with them will attract sponsorship from other brands.”

Like all deals, there was no going back on a handshake, so making this work was a bit of a nightmare. No other brands came on board because they thought we would be well supported by this big brand partner, and the brand’s team was very demanding.

It was a hard slog but the team delivered. The lesson everyone learned was the importance of coming to, and sticking to, the right proposal valuation and pricing margins.

2. MAKE SURE EVERYBODY WORKS THEIR NETWORKS

The responsibility for raising funds within an organisation often rests on the shoulders of one person or one team, but, realistically, everyone should work their networks.

I worked on a project that had lots of support from the market – lots of partners wanted in – so raising revenue was not a terrible struggle. We had some great assets and the packaging process had been built in collaboration with the delivery team, so we knew we could deliver as promised for brands. As a result we reached our revenue target in line with the planned timeline. We then moved on to tracking down the stretch target, and this was where the wheels fell off.

Assuming we would reach our stretch target, the delivery team decided it must be easy to raise revenue and started to push the spend budget without discussion with the commercial team.

As we approached the event’s go-live date, the CEO was putting more and more pressure on the commercial team. We heard comments such as, “There is a shortfall in the spend budget, so you’ll just need to raise another $X,” “How hard can it be?” and “Just make a few phone calls and sort it out.”

Money had to be found for a budget that the delivery team had already committed, or the project was at risk of collapse!

The solution was sharing the load by making everyone accountable for the new revenue target – we worked as a team and created a robust network map. This ensured everyone was using their network to track down interested parties and strike up conversations about partnership. The commercial team coached and supported the broader team by ensuring they had everything they needed – tools such as email templates, a prospectus document and a series of FAQs for potential partners – to help them reach the new target.

In the end we pulled it off – with lots of hustle and unnecessary stress – and we learned the importance of ensuring everyone works their networks.

3. ENSURE YOUR LANGUAGE RESONATES WITH YOUR TARGET AUDIENCE

When a NFP is doing amazing work there is always a great story to tell, but if you can’t articulate how a partnership can deliver a commercial return, then the lack of interest can be confusing and disheartening.

I worked with an extraordinary organisation that delivers an incredible solution to regional Australians. They weren’t government funded so looked to corporate partners for support. There was a deliberate decision to seek sponsorship funds rather than philanthropic support. The proposal told a wonderful story about how important this program was  and the impact a partner’s involvement could have across the community. We had selected brands with shared values and whose audience was a great fit. But we couldn’t get a deal done.

I sat in some meetings trying to understand why the message wasn’t landing. The conversation unearthed comments such as, “It’s wonderful what you’re doing,” “Our customers really appreciate the value of this service,” and “Perhaps this would sit best with our CSR team.”

The problem was clear: they weren’t seeing the potential for a commercial return if they invested in the partnership. While the stories were amazing and on paper the partnership seemed perfect, our language wasn’t resonating with them.

The next step involved breaking the proposal apart to find ways the brand could ‘exploit’ the rights on the table. We looked at it from the partner’s point of view – what if they had $100,000 to spend and had to decide between our property and naming rights for a sporting team (note that we couldn’t offer TV coverage)? This process resulted in changing the language so it was all about how they could leverage the partnership to deliver commercial outcomes rather than how the partnership would help their brand.

Implementing this change took a major shift in mindset – we put ourselves in the shoes of our potential partners and it paid fantastic dividends. A naming rights partner was secured for a multi-year deal.

The key lesson there was the importance of speaking the language of your target audience.

Overall, I believe that if a team really comes together to tackle a problem, then it will give everyone involved the confidence to overcome failure, learn from from it, and use those lessons to inform how they achieve success in the future.

 

 

This article was originally published by F&P Magazine in April 2018

I hope it helps with your pitches to brands.

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