Never waste a good recession

On the face of it, the current cost-of-living crisis and the looming global recession look like a total disaster for the events industry. And make no mistake, for some they absolutely will be.

But for others, recession will be a golden opportunity to re-focus, eliminate cost and actually increase market share.

So let’s consider some of the strategic moves you can make today, to increase your chances of ending up on the right side of this thing.

But before we do, let’s take a moment to look at what we’re dealing with.

How will the recession impact business events?

We know all about the obvious stuff. Sky-rocketing prices for food and energy, combined with continued labour shortages across the hospitality industry are sending venue and catering costs through the roof. Even if government support is expanded (a big if) plenty of hotels and venues will not make it through the coming year.

In addition to higher prices, we’re seeing a shift towards much stricter terms on the part of venues. Payment in full, far in advance of event day, is becoming the norm as venues no longer have the cash to operate or the balance sheet strength to survive if your event happens to fail. Executive summary: their problems are going to be your problems.

And there’s more. As governments fight to control inflation the only way they can – by raising interest rates – they usher in the end of an unprecedented period of cheap (almost free) money.

Since the global financial crisis in 2008, rates have been so low, investors could not afford to hold cash – as the meagre returns were cancelled out by inflation. So instead, they invested in new companies. Lots of them. The startup boom was born, and it’s been booming ever since.

It turns out many of these startups had pretty sketchy business models, but the point is they spent venture capital and private equity cash like the proverbial drunken sailor on shore leave. Most of it went on marketing and brand-building – with a huge share going to events. Well, those days are over.

OK, enough gloom. What can we do?

Different economic conditions call for different mindsets.

In a down economy, everyone loves value. While your mantra might once have been ‘How can I make my event stand out from the others?’ now it’s ‘how can I show my boss I’m saving money?’

Forget perfection. It’s time to protect your event portfolio, your team and all your hard work so that, when budgets recover, you’re well positioned to take advantage.

Let’s start with the obvious.

Cut expenses

We all think we need everything we’re currently paying for. And we’re all wrong about that.

The key here is to focus on identifying savings that will have a meaningful impact on the bottom line, without destroying the qualities that make your events valuable to attendees in the first place. To do this, you need to understand what your crowd really cares about, and this can vary a lot from market-to-market.

You can’t do much about underlying inflation. Food, energy, materials – all cost more, wherever you go. But ask yourself: if you currently have a meeting in a four-star property, would it really kill you to move it to a three-star? If you’re Louis Vuitton, maybe it would. But for most companies in most verticals, it would be fine. Most of us are there for content and networking. Not chandeliers.

If you currently offer a fancy sit-down lunch, could you swap it out for a great local food truck or street-food business? The trick is in making a virtue of visible cost-reductions. A cheaper sit-down lunch than last years would look just look, well, cheap. But switching it up all together can be cool, charming, different, memorable – all whilst saving you significant cash.

Identify the services and tools you’re paying too much for (or the bells and whistles participants aren’t really using) and rationalise them. Event technology is a good place to start. Are you paying a percentage on every registration? Are you paying for all kinds of extras – like custom domains, branding packages, overage etc? Are you able to access the least expensive payment processing services out there?

Are you paying out lots of money to multiple providers for registration, virtual, email marketing, on-site and badging, audience engagement, web development etc? Today there are single platforms that can handle all of this at a fraction of the cost – without compromising quality. Take a good look at your event technology stack. You might be paying for the same functionality several times over.

Do you get value from everything you’re paying for? Take event apps. They’re nice to have, but if you’re spending $6k per event and only a tiny minority of attendees are actually downloading and using the app – maybe it can wait until the good times come back?

The market for event tech is super-competitive. This is one area where you can ask your supplier ‘what have you done for me lately?’ followed by ‘how about doing it for less?’ If they can’t (or won’t); take your business across the street.

Focus on value

Value is the perception that you’re getting a good deal, regardless of price. Three hundred dollars a night is great value at a Mandarin Oriental Hotel, but it’s daylight robbery for a room in a Motel 6. So focus on giving your attendee value in return for the price they’re paying, the time and travel commitment they’re making (or both). Show your clients ways to save money on their events, and you'll build great loyalty. This doesn’t mean you have to cut prices. It simply means you need to match the offer to the attendee’s perception of fair value.

In a recession it’s often a good idea to demonstrate that your events are a bit more efficient, frugal even, in keeping with the straitened times. Caviar and Krug may not be a good look at a time when businesses are cutting staff – whether your event budget supports it or not.

Lean on suppliers and partners

You don’t have to do this alone. Everyone in the event value chain needs to do their part and figure out how to keep your events on the road for less money.

We have a client that used to spend a lot of money on the physical build of their annual conference. Stage sets, signage, exhibition infrastructure – everything was bespoke. And material costs are up almost 40% across the industry. But they worked with their exhibit company to do it for less. How? Not by just eliminating structure, but by re-using and re-purposing properties from other people’s shows. Their properties still look great (and they’re more eco-friendly) but they’re less custom and they cost £30–35k less for a 2 day event.

So ask key suppliers to get creative for you. Change menus, AV set-ups, streaming providers – everything can be optimised if you push for it. Give suppliers and partners a challenge. If they rise to it – great. If they don’t, that’s useful information.

Invest more in marketing

This one seems counterintuitive, but with so many companies tightening their own budgets, you need to increase your marketing and sales efforts to convince people to come to your events. Also, the chances are your competitors are cutting back – either cancelling events or not promoting them as actively. When everyone else is quiet, that’s when you want to be loud. You’ll never have a better opportunity to cut through.

Remember: investing more in marketing doesn’t simply mean throwing more cash at Google ads and paid social media. Get your team working on generating more content to promote your events. Look for more partnerships and contra deals. Increase the frequency of your email blasts. Get creative.

Be aggressive

Here’s the thing. While most organisers are battening down the hatches, a few brave companies will see this as an opportunity to steal a march on their competition. If you’re sure of your market and the content that drives it, this might actually be a good time to expand a current event – or even start a new one. Sure, you might not be as flush with cash as you were in past years, but neither is everyone else. Build up an advantage during a downturn and it can be difficult for competitors to surmount it later.

 

Keep people working

In a recession, lay-offs are sometimes unavoidable. But some businesses are too quick to reach for the pink-slips and they regret it later. Your people are a valuable asset. Think how much it costs to recruit and train them. So when things slow down, it pays to take on as much work as you can to keep your people employed and loyal.

If you’re an agency this might mean accepting contracts at lower margins. If you’re a corporate team, get creative about internal training and development projects you could support while you wait for external market conditions to improve.

Either way, you have to look for new and different ways your event staff can add value using the time and expertise you have.

To sum up

Don’t panic. Stay focussed on the fundamentals of good content and strong networking opportunities. Even in tough times, all businesses need to stay connected, to learn and to sell. Offer value to your attendees they’ll keep coming.

And don’t waste the chance to use this time to re-focus, trim some fat from your budgets and even start something new while other players are off the field. What did Churchill say?

‘An optimist sees the opportunity in every difficulty’.