Industry-Sponsored Research Week
University-Industry Engagement Advisor

Corporate tiering strategies allow schools to focus engagement resources

By David Schwartz
Published: September 18th, 2018

There are just too many corporations out there for university departments charged with forming partnerships to cover them all — especially with limited resources. Many leaders agree that corporate tiering — a strategy for prioritizing companies that should be primary targets — is an extremely effective way to sharpen your focus.

“It’s really just sorting companies into categories in terms of their relationship and potential relationship,” Brad Favel, MBA, PhD, director of business development at LINK: Center for Advancing Industry Partnerships Virginia Tech, told attendees at the recent NACRO annual meeting. “How do we make sense of all these different relationships?” Favel posed.

Virginia Tech, he noted, has worked with more than 3,000 companies in the last five years that have some sort of financial relationship with the school — but there are only four people to manage all of it.  Corporate tiering, he continued, “is good for identifying top companies/partners, best prospects, and efficiently using scarce resources considering that corporate engagement generally involves hundreds of companies, and only a handful of them usually produce a big strategic partnership.”

Virginia Tech’s approach, said Favel, “recognizes that there is a ‘continuum of engagement,’ starting at the lowest end with a single point of engagement, maxing out at the ‘strategic engagement’ level that often involves multiple agreements and co-op activities around research, talent acquisition, and other areas of collaboration.”

The school’s tiering approach began with research showing that a huge percentage of total gifts and philanthropy — nearly 80% — came from just 4% of all companies who had made donations over a five-year period. The top two tiers of four were defined as those making total gifts over that period of $100,000 or more. Fravel used a similar tiering approach and applied it to corporate-sponsored research spending, with Tier 1 set at $1 million+, and Tier 2 at $500,000-$1 million. What he found was a similar weighting toward the top, with just 350 of 3,000 companies represented in the top 2 Tiers. Based on those results, “each person in the four-person office was assigned a Top 20” to focus on in their engagement efforts, Favel explained.

The University of Washington, one of the country’s largest schools surrounded by major corporations based in the Seattle area, has recognized corporate tiering as an imperative given the sheer size of its universe of potential partners. “UW is a huge school. There are huge companies in Seattle, so there’s a lot to work with, but it also makes tiering even more important,” said Todd A. Cleland, PhD, director of industry relations there.

“Big research universities like UW and Virginia Tech over a two- or three-year period have thousands of companies that provide gifts or sponsored research support,” Cleland explained. “As far as what subset you can reasonably steward and interact with, you need some way to filter what corporate relationships are most important.”

A detailed article outlining the tiering strategies at three universities appears in the September issue of Industry-Sponsored Research Management. To subscriber and get the full article, along with access the publication’s complete archive of best practices and success strategies for corporate engagement and research partnerships, CLICK HERE

Posted under: University-Industry Engagement Week

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