When I launch an event, one of my goals is to ensure that, from the very beginning, we are doing everything possible to maximize profitability. Given that goal, I’ve become pretty savvy about identifying opportunities where an event could generate a greater gross margin. The trick, of course, is to go beyond that step and take the necessary actions that avoid leaving any money on the table.
There are a number of signs that an event’s not operating to its full profit potential. Often, it’s a matter of being attuned to situations where things might be going “fine”, but your experience and expertise suggest that there are opportunities to do better. Here are five scenarios:
1) You lack a crisp value proposition
If you can’t explain in a concise and compelling manner why exhibitors or attendees should come to your event, then you’re really operating with the hope that your prospects can figure it out for themselves and then act. And, as the saying goes: “hope is not a strategy.” Garbled, unclear messaging will leave some of your prospects confused and uncertain. Uncertainty is not a pathway to maximizing sponsorship and attendance fees. It’s the road to lost revenue.
2) Exhibitors and attendees are wildly enthusiastic
This might seem counter-intuitive. When your target prospects are clamoring to sign up for booth space and conference registrations – and not balking at the fees – that’s obviously a good sign. Consider it as validation of your value proposition in terms of why your event is worthy of the investment and different from – and better than – others.
But also consider whether it’s a signal that your fees might not be priced appropriately for the demand. Is there an opportunity to raise prices (how much is up to you) the next time? Consider this year’s event as an investment in knowledge that should inform next year’s plan. Otherwise, the money you don’t make is just lost forever.
3) There’s a lack of urgency in actions or communications
It’s difficult to imagine anyone who would take on the risk of running an event, but not figure out how to instill the necessary sense of urgency about getting the money needed to pay all those incoming bills. But that cavalier attitude about cash flow often exists! The maxim I followed at my first events job was that you wanted 80% of the exhibitor money collected at the time you announced the conference program. Admittedly, that is a high bar to meet but doable if it’s your discipline.
More typically, for an existing event, you should try to rebook as many previous exhibitors as possible and attempt to get attendees to commit to the next year (If you can). And the ideal time is while the event is happening or shortly thereafter. From this, it follows that you want to have incentives (e.g. money-back guarantees for attendees, free stuff they can’t get otherwise) that make it worthwhile for exhibitors/attendees to commit early.
4) You don’t reach out, either in person or on the phone, to your attendees
This indicates an ‘I don’t care to know my audience’ attitude and it’s an unforgivable flaw to be found in any event professional who doesn’t personally know at least 10 attendees. Engaging personally with your customers is the best way – the only way – to know what they care about. And what they care about is what drives where they will spend their money.
Perhaps this is illustrated by a recent argument I had with someone at an industry event where concerns were raised about where her industry was going. Yet, at the same time, she argued that she had no time to speak with 10 attendees a month. To me, that kind of time spent is an investment that will pay off in the future. Ask the right questions and you’ll know where your industry is going. And you’ll be well positioned with the right offer to take advantage.
5) Your event isn’t making enough money
This is the toughest situation because it’s real, tangible, and has an urgency that requires prompt action, especially when you have other choices to make money. It could be attributed to a variety of reasons, some of which I have already listed above. If this is your scenario, you should probably hire someone from outside who can give you a fresh perspective on the likely causes and the prospective remedies that may not be obvious to someone inside who works on the event daily.
Whatever the situation, leaving money on the table is a bad strategy. It leaves opportunities both for new and old competitors. So why would you do that?