Exhibitions must deliver even more value to exhibitors in the post-recession world. Exhibit Surveys’ president Skip Cox asks the three key questions show organisers need to answer.
For some time now speakers at exhibition events have been airing interim strategies as their audience looks ahead to a better time, a time when the recession would level out and begin its ascent into recovery.
However, while it appears that time is here, the negative effects of the recession also revealed industry vulnerabilities remaining to be addressed. Going forward, the new reality for our industry is that the post-recession world of exhibitions will probably evolve to be quite a bit different in scale and scope from the business-as-usual world of the past. It presents us with new challenges to solve, as well as the need to prove new and more relevant levels of value to our exhibiting constituency.
To some degree we must actually lead exhibitors into the process of understanding, and exploiting, the unique value components that exhibitions offer. Ultimately, we must learn the language, and relate to the mindsets, of our ultimate customers, the chief marketing officers (CMOs) who allocate the budgets that represent our revenue streams.
Here we look at three areas that organisers should be asking themselves in a recovering economy, and the new challenges it brings.
How do you become a strategic partner with your key accounts at the marketing level and rise above your relationship being based on a transactional sale of space or services?
Strategic relationships have much more potential for being long term. Since we can’t educate and sell CMOs on an ongoing basis from a distance, there is a need to begin to build the structure to do so.
Digital media show NAB, for example, just created a new position of VP of strategic accounts. This person’s job is to work with key accounts that are strategic to the health and future growth of the show. This person has absolutely no sales responsibility.
Not every organiser may be able to afford the creation of a new VP position, and in any event, one would expect gaining access to CMOs to be difficult at best.
Nonetheless, finding means to do so is becoming more imperative. You and your exhibit manager, after all, share the same interests and have a common stake in the maintenance of marketing budget considerations and attendant exhibition allocations in the mix.
Event budgets are now improving, but not at the same dynamic as overall marketing budgets.
Thirty-nine percent of companies surveyed by B2B Magazine reported increased marketing budgets; exhibit budgets, while showing a corresponding gain, also posted an alarming 27 per cent, who planned to decrease exhibit budgets in 2010. Even more indicative, at the same time B2B also reported a very strong increase in on-line marketing allocations, at 73 per cent.
The benefit to us is that online methodologies are self-limiting. They are confined to situations that are direct-transaction based, where there is little or no need for nuanced product selection and intangibles that require a deep drill into product awareness and benefits, the exact thing exhibitions can offer.
The ever-present pressure for increased corporate cost containment, including cost of sales, makes exhibitions a natural target, and our role, unfortunately, must still contain a defensive element: the ongoing need to justify exhibition participation and investment to the CMO.
What does this say about the type and quality of information we need to provide major exhibitors and CMOs, who are getting metrics and analytics from their on-line marketing activities?
Our experience in working with event managers of major exhibitors is that they as well as their CMOs are increasingly becoming data driven in their decision-making regarding events. In addition to needing data to justify their investment in shows, they are looking for more detailed and better data about attendee needs, expectations, interests and demographic / psychographic profiles to plan their participation.
Decisions to exhibit and participate in a show will be much more strategically aligned to their business priorities and marketing focus. They will continue to exhibit in a show only as long as it aligns with their business priorities. And business priorities for major companies can change relatively quickly depending upon market and competitive factors. For their major industry shows it is less of a concern, but for vertical shows that align with their strategy one year but not the next, they are more likely to drop out when the show does not fit.
Interestingly, a few organizers have begun to actually measure return on investment (ROI) for their key accounts. If this is the case, organisers need to be prepared to provide much more data and more relevant data that will help key accounts in their decision-making. Assisting with ROI development is a preemptive move because as exhibitors become more selective in their show investment decisions, ROI benchmarks can become strong determinants.
Providing exhibit ROI results to key accounts involves comprehensive involvement and collaboration, and although it may be the quintessential service that organisers might provide to event managers and CMOs, it still may be premature for some organisers to undertake. Other information, however, is more readily available and transmittable; information that speaks the CMO language but is not yet widely deployed to them. This information bypasses the typical, familiar areas that resonate with exhibit and event managers such as leads, booth traffic, attendance and demographics, and moves upward to address the key marketing initiatives of concern to the CMO.
Shows have a very strong value proposition as it relates to customer acquisition, at least compared to other types of events. For major exhibitors at shows, our research shows that an average of 47 per cent of their visitors are current customers but about as many (44 per cent) are non-customers who have a known buying influence for their products.
On the other hand, their own private corporate events are very customer-centric with an average of 77 per cent being their customers and the rest including very few prospects. This is useful ammunition for us to position the value of exhibitions to CMOs who have customer acquisition as their number one initiative for 2010.
Major exhibitors are increasingly taking a more integrated and targeted approach to how they participate in exhibitions. It is no longer just about taking space on the show floor. What does this say about the current revenue model for most shows that is heavily built around exhibit space sales?
Figuratively speaking, we are seeing exhibitors place more value on the 100 high quality, intimate customer or prospect meetings they can set up at a show than they are interested in the 2000-plus people they will get through their exhibit.
As another example of booth space becoming ancillary rather than primary, some companies are increasingly looking to enhance their brand perception as a thought leader in the industry. They will downsize, using the booth presence as a platform to bring highly visible and respected company speakers to the show, or to host brand-affirming side activities.
These kinds of motivations for participating in a show really center on those strategies that have a higher perceived ROI to marketers, and will generally require tactics in addition to having an exhibit on the show floor, or in some cases a smaller or no presence on the exhibit floor than in the past.
This is an area where perhaps there is a need to think about future innovation in pricing
structures and models. Should you, for example, be basing revenue models on the value and quality of the audience rather than space alone? In essence, this is what hosted buyer events do. And then, how do you help exhibitors facilitate an integrated approach to participating in your event from a consultative perspective?
This thinking can be extended to exhibitors, who now reduce or eliminate their presence on the show floor in favor of offsite meeting rooms or activities. Exhibitors need to be reminded of the need for a balanced presence on and off the floor if they are to reach new prospects, again, touching on the top CMO priority of customer acquisition.
No matter what the size or shape of the stand you take at an exhibition, interaction is key to the a company’s success. A disturbing trend we are seeing is that although exhibitors continue to do a good job of attracting their potential audience to the exhibit, the degree of face-to-face engagement is declining often because of fewer staff resources. In 2009, for every 100 qualified attendees (those in the target audience) who visited the average exhibit, only 53 were engaged face-to-face by someone in the exhibit. There has been a steady decline in this metric.
Michael Corleone borrowed an applicable ancient Chinese proverb in The Godfather II: “Keep your friends close, but your enemies closer.” Considering this bit of wisdom, why not strive to bring more of your key accounts’ hosted and private events under your own event’s pricing umbrella? This certainly presents a new revenue source that could be bundled and discounted with booth space and at the same time open the door for collaboration to find even other ways for your customers to obtain new value propositions from your event.
The overriding point here is that pricing must be ever more covenanted with value. Our sales messaging needs to express that cost / value relationship to the people who pay us in terms that will resonate with them and then, of course, deliver on it.
These questions raise challenges that cannot be ignored, but also raise opportunities to bring exceptional relevance to what we do. Our experience is that exhibitors and marketers still see value in shows. We just need to better demonstrate that value in terms and metrics relevant to them, help them realise their potential, and quite frankly become more sophisticated in understanding how shows fit into the overall marketing mix, and more specifically, into their mix.
In the process, we must learn to become much more consultative in our approach.
We can’t work in the vacuum of just event marketing. The more sophisticated event directors of major companies are increasingly becoming more strategic in their thinking. We need to provide them with tools and data that will help them do their jobs better and demonstrate to their CMOs the strategic value of exhibitions to their overall marketing efforts.