It is counter-intuitive during times of recessions for corporations to reduce their marketing and sales budgets. However, as we've seen throughout this one, such reduction is top of the agenda for most companies. Right after they trim their staff, that is.
During times of recession, the potential impact and sales productivity of exhibitions increases. Those events that belong to industries not sent into freefall by plunging markets, such as auto and construction, prosper when economic circumstances deteriorate.
Companies reduce the number of staff they send to exhibitions to reduce travel budgets, and as a result the quality of the audience rises substantially as events are packed with CEOs and decision makers with access to the company purse strings.
“It is essential to manage the expectations of exhibitors as we come out of the recession,” says International Association for Exhibitions and Events president, Stephen Hacker. “A recession like this didn't occur overnight nor will we return to a robust economy any time soon. It's important for the organiser to create logical, reasonable expectations among exhibitors.”
And delivering quality, not quantity, is key to managing these expectations, according to Hacker. “The unique power of our events is the role that they play in purchasing decisions. What we have heard in almost every instance this year is that the numbers of visitors is down, in some cases substantially, but the quality of the audience has never been higher.”
The term net buying influence (NBI) is one that rings in the ears of marketing executives. It relates to the percentage of visitors who have either the final say on a deal, or who recommend with authority the purchase of at least one more of the major types of products being exhibited. Hacker claims that while the ranges fluctuate a great deal between exhibitions, recent years have seen the number of their VIPs attending fall somewhere between 74 and 88 per cent.
Put another way, over time the percentage of visitors who now have substantial buying authority has become extremely high. “Compare this to the NBI of all the readers of a magazine ad or of a TV commercial; those percentages would not exceed 10 per cent,” says Hacker.
It's a figure that looks set to stay. The number of first time-visitors, the big spenders and exhibitors of the future, remains constant, whatever the weather. The events this industry produces, even during recession, are powerful magnets for first-time visitors. According to Hacker, since 1987 the average number of first-time attendees is 35 per cent of the total audience. Even during recessions, in 1991 and 2001, and in this past recession, the average number of first-time attendees remains above this figure.”
He says changes in the global economy mean there will be new outcomes to consider and unintended expectations to analyse in 2010.
“The integration of most industrial economies is very likely to result in new dynamics,” says Hacker. “The economies of the US and China, for example, are now so entwined that it means whatever happens in a major segment of the economy of one nation will almost immediately impact the other.
“The same is true of dozens of other national economic relationships. It is much more difficult to predict with any accuracy what may happen based upon history because of the dynamic changes in the world economy.”
As we already know, major advances being made in technology will also impact heavily this year, especially in light of emerging visitor tracking software and other visitor habit analysis packages. An exhibition may take place just once a year, but new social media websites mean visitors and exhibitors alike can generate a buzz throughout the quiet months.
“One thing that has changed remarkably is the array of communications channels that we in the exhibition business have at our disposal these days,” says Hacker. “In the last two years, it has been demonstrated repeatedly just how powerful the right video can be on YouTube, or how incredibly efficient messaging can be on Facebook or Twitter.”
That said, Hacker understands that most exhibition organisers are not personally connected to any of the social media. There is, despite frequent stories on the persuasive power of a well-timed Facebook campaign or viral marketing project, a clear reluctance in our business to embrace these new communications channels. “That, I believe, is a grave and potentially very costly mistake,” says Hacker. “We must learn to overcome our own personal biases and go where the money is. Tomorrow's exhibitors are using them and they are the disciples of the industry. That is our greatest challenge.”
Another key strategy is to enhance the value of the conference element of our exhibitions, providing genuinely compelling programming that, together with the attraction of the exhibition, can help build and retain attendance in leaner times. “These days the hunger for credible information, for news and know-how and learning opportunities, has never been greater,” says Hacker. “Many of our exhibitors possess unique insights and information that they are more than happy to share with our exhibition audiences.”
But ultimately, organisers must be prepared to install new and aggressive strategies in the hope of retaining their visitors. “One major event in the US recently adopted what was previously regarded as heresy,” says Hacker. “They provided their returning exhibitors, with extended payments over time for their booth space, the last payment coming after the exhibition has concluded.
“This is heresy, but it is the new reality. It is something for us to consider as a new strategy going forward for loyal, returning customers and perhaps for only the most important of our exhibitor customers,” he adds.
Being flexible about finances is frequently seen a way to secure business for event organisers. In bad economies, the decision to purchase space is often deferred to the very last moment. It's not unusual for the decision to be made even two or three weeks before the exhibition.
“Holding onto cash for as long as possible becomes very important for most companies,” says Hacker. “And it's for this reason that an organiser will want to remind exhibitors as frequently as possible of the importance that exhibitions play in the purchasing cycle, during good times but especially during bad times.”
Which brings us back to the need for year-round contact and the use of social media. So while the times remain lean, let's not forget the market for exhibitions remains plump. Some sectors are doing well where others struggle, but either case for exhibiting has never been stronger. Our industry is, as Hacker opines, nothing more than a mirror image of the industries that it serves.