Try these tips to make sure you aren't leaving money on the table at your next event.
Are your meetings and events leaving profits on the table? Probably, according to James Hollan, president and CEO of International Meetings Group LLC.
In his previous work as a financial turnaround specialist for nonprofits and associations, Hollan typically kickstarted a turnaround by focusing on the organization's meetings. "And they would say, are you nuts? They are the only thing that's been making money for us for these last couple of years," Hollan recalls.
But that initial disbelief would change when delving into the meeting budgets showed the potential to increase profit fivefold or more. "Because they were making a profit, people assumed that they were making a reasonable profit," Hollan says.
Your meeting may have untapped profitability potential, too. Hollan suggests you begin with the following:
Look for the little things. One association with a 1,000-person meeting served continental breakfast every day, including fresh fruit, which was included at a single board member's insistence. Hollan pointed out that by removing the fruit from those breakfasts, the organization could save $27,000, plus taxes. "And that's a meeting for 1,000. Imagine a meeting for 5,000 or 6,000," says Hollan. "I'm never saying you want a cheap meeting … you want a wow meeting. But you want to look at everything and see, can you still put on a great breakfast without the fruit?"
Build your budget from the discounted price. When creating an event budget, base your projected registration income off of your lowest discounted registration fee—the member price, early-bird price, or what have you—instead of the full, undiscounted fee, which will not be paid by many registrants. Hollan calls this "a basic mistake that is constantly made."
Price your meeting at the level it deserves. "People go in and they say, ‘We want to compete with this group, so we're going to do this meeting, but we're going to do it cheaper.' Do you really want to be known as the cheap meeting?" asks Hollan. "Make your event worth the kind of dollars you need to charge. … You have to believe in yourself, and you have to make your meeting worthwhile."
Online Extra: More Tips to Make Money on Meetings
Take a look at the competition. You can learn a lot from a basic competitive analysis. "Associations think they're unique, when in fact they are not,” says Hollan. "There really is a way to sit down and think, what are other people charging, and what are they giving for that?”
In fact, you can get a lot of the information you need with some basic internet skills. Visit your competitors (both nonprofit and for profit) online and see what they charge, what they offer, and what attendance figures they promote, and you'll start to get a picture of where your event fits into the competitive environment.
Hollan says that you may even find that you've been underpricing your event—in which case, don't be afraid to raise that registration fee. "We have looked at associations that are underperforming for their meetings, and they were really undercharging,” says Hollan. "We convinced them to raise their rates substantially for what they should charge. They did get a falloff in attendance; however, their profitability went up.” And in all but one case, those associations found that within two or three years, the attendees they lost due to the higher price point returned to the conference. "They invested money in that meeting to make it worth attending,” he says.
Talk to your exhibitors and sponsors. The exhibitors and sponsors who support your meeting have a vested interest in its success—and they know their own businesses better than anyone. Hollan recommends simply speaking with them and asking what they would want to receive in return for your proposed higher exhibit fee or sponsorship category. You'll be surprised by the creative ideas you'll hear.
Negotiate with your vendors. "Everything is negotiable,” says Hollan. "My job is to give great representation for my folks, and [the vendor's] job is to give great representation for their folks. I may have 50 things on the table and I'd love to get every one of them, but I won't. At the end of things, I'll get 25 and [the vendor] will get 25, but that those 25 things can be $100,000 back in my pocket.”
Understand the hotel's business model. Hotels are in business to make money, and they make that money through certain business practices. You'll be much more successful in your negotiations if you understand and work with their model. For example, if you're willing to shift your meeting's arrival pattern to fit in more efficiently with another meeting the hotel is hosting the same week, the hotel may be more willing to negotiate other elements of your contract.
Don't have a background in hotel management? One possibility is just to ask your hotel partners directly. "All of the big hotels have programs for their better clients where they sit you down and say, ‘Here's how we make our money,' because they believe that when you understand them better, you'll be able to make more deals,” says Hollan.
Market to the entire person. Hollan says that "a huge mistake associations make” is to market as if their potential attendees had no interests outside of their work. If your attendees are combining vacation with their conference attendance, or bringing their spouse and family along for the trip, they're making a decision that is both personal and professional, and your marketing plan needs to take that into account.