Even five years ago, the total annual global meetings and events spend was over USD 500bn – and that was in the midst of a struggling global economy. The 2016 Global Meetings and Events Forecast shows the number of planned events is expected to increase across all event types in all regions. Event sizes are predicted to grow across every category, with conferences and trade shows the largest in nearly every region. In all, spend is set to increase by 1.6% from 2016 – but, there’s a but.
Price increases are projected to outstrip budget growth, increasing by 4.1% overall. So with costs going up more quickly than budgets, the picture is a challenging one for anyone involved in events. The question of budget efficiency becomes more important than ever as organisations that are able to generate maximum returns on their investment carve out a competitive edge.
This seesaw of cost and return goes much deeper than simple budgeting. The mechanism by which an event is successful (ie, generating an optimum return) is about the strategy behind the curtain much more than the show itself.
With that in mind, these are five major strategic mistakes that could be costing you dearly on your event ROI.
1. Not asking the ‘why?’ question: Why are you holding this event? Yes, every company wants their event to be impressive and memorable, but striving for style before substance can be a big mistake. Sure, the dazzling dance troupe, five-star cuisine and midnight fireworks display can be important – such cosmetic features build excitement around your brand, enhance year-on-year attendance, and make the difference between a deluge or drought when it comes to positive PR. However, to maximise ROI you need to know what the return is that you’re trying to generate.
If you focus too heavily on the end result you can easily wind up with an event that achieves little. This sense of achievement is key, because an event that isn’t rooted in your corporate objectives is just an event for event’s sake. That’s not to say you can’t run an event purely as a branding or bonding exercise – think end-of-year parties. Rather, it’s that you should know exactly why you’re holding this event, what you’re trying to achieve, and how you’ll measure it, so you can prove returns and justify expense.
These objectives, defined from the outset, shape the form your event takes and ensure that any ‘add-on’ cosmetic features don’t come at the cost of ROI. For instance, if you’re looking to secure sales leads for a new product, then a targeted trade show is probably more appropriate than a business dinner. If you’re hoping to generate revenue for charity through ticket sales, a Michelin-starred meal and auction could work well. On the other hand, if you’re hoping to drive in-event business, then a sit down meal with limited networking opportunity won’t be ideal.
If you’re looking to secure sales leads for a new product, then a targeted trade show is probably more appropriate than a business dinner.
2. Putting the blinders on when it comes to competitors: Competitor analysis is a fine line. You don’t want to obsess over what your competitors are doing, but you certainly don’t want to ignore them. Indeed, researchers Depperu and Gnan find a direct link between competitive context and business strategy, with competitive pressures giving rise to strategic needs including the need to innovate, drive efficiency or attract resource. This has direct relevance to your events planning, given the above point that your event should be a manifestation of corporate goals. If competitive analysis shows that you’re facing increased pressure on prices, for instance, then you might organise a trade event focused on highlighting product differentiation.
Competitor awareness is also important because it fosters creativity. Knowing what other major players in your field have done with their events allows you to position innovatively, delivering a better experience to your attendees. It also gives you a good benchmark as to what ROI you can expect, allowing you to allocate budget intelligently to higher profit-potential activities.
3. Not thinking through your brand positioning: A distinctly average event might hire a conference room, and hand out a few half-hearted brochures to attendees. A better event might have branded signage, branded screens, branded everything imaginable. However, a fantastic event is run by people who clearly understand that the trappings of branding aren’t the same thing as brand positioning. There is, as Fortune and Edema write in Branding and Brand Positioning, a major misunderstanding that positioning and branding are one and the same.
Where branding is about creating differentiating features such as colour, logo, style, product and package, brand positioning is about the space you occupy for your customers. It’s more refined, more about the series of values embedded throughout your organisation than it is a simple logo and colour scheme. This strategy failure runs deeper than events planning – it’s an issue many organisations struggle with on a fundamental level. Assuming you’re not one of them, an event that truly conveys your brand positioning is a powerful thing that further solidifies your place in the market. Every event touchpoint should tie back into your message of who you are and what you represent, from venue to entertainment. Virgin Media offers a great example, with events that consistently represent and further the playful, witty values the brand embodies – a Mo Farah-led ‘Mobot’ danceathon, for instance.
Branding is about creating differentiating features such as colour, logo, style, product and package, brand positioning is about the space you occupy for your customers.
4. Ignoring data from past event performance: If you want to maximise ROI you have to analyse past performance so you can improve for the future. That’s just as true of events planning as it is anywhere, but a recent study shows that 59% of marketers claim they’re in the dark regarding event ROI. This isn’t helped by the complexity of the area. At least some of your objectives are likely to be ‘soft’ and therefore difficult to assign value to – increasing brand awareness, for instance. So the result is two-fold: either organisations fail to measure effectiveness at all, or they measure everything and drown themselves in data.
The solution to both situations is to go back to your objectives, and keep things simple. For instance, if you’re running a conference aimed at generating new business leads then you’ll likely want to measure in-event lead generation, and use lead scoring to calculate value so you can track that against total cost of execution. Add in some sort of qualitative data collection and you’ve got a pretty clear idea of what worked and what didn’t, so you can make meaningful improvements next time.
5.Not improving your cost leadership skills: The previous four tips are focused on improving the outcome of your events, but the other way to improve ROI is to drive cost efficiencies, as anyone in events well knows. This is especially relevant as event costs continue to rise.
Meeting Professionals International tell the story, with 48% of respondents to the Winter 2016 survey predicting continued cost increases. Currently this is due to growing security concerns around events and the concordant costs, but it follows on the back of rising accommodation, air travel and catering costs since 2014.
It’s more important than ever to secure competitive prices, so if you’re not constantly honing your cost leadership skills then your event ROI will suffer. Event cost control might start with budget preparation but it shouldn’t end there. Effective event planning relies on astute and continual budget readjustment, to aid more thorough financial decision making. Your price negotiation skills are critical, as is your ability to find ‘outside the box’ methods for keeping costs down.
It’s more important than ever to secure competitive prices, so if you’re not constantly honing your cost leadership skills then your event ROI will suffer.
The events planning iceberg
The iceberg analogy is overused but it’s an apt reflection of the events planning world. The event itself might be what gets noticed, but it rests on a huge amount of work under the surface. The underside of any successful event is the strategic planning that ensures the final result furthers corporate goals.
It might not be as glamorous as choosing a venue and planning entertainment, but a great event is one that knows its why. Every how decision you make during the nuances of event planning should be rooted by that initial question. An event is most effective when it is grounded by competitive context, aware of where it stands in the market, and whether in innovation or tradition. Likewise, an event can achieve better ROI when it embodies and furthers your brand positioning – who you are to your audience. Those things given, trial and error allows us to refine and improve, while cost-leadership is a final piece in the events ROI puzzle. So as global costs continue to increase, tension in budgets can be relieved by sound event planning strategy.