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Groups fail to maximize trade shows

Study shows many associations lack specific strategic plan and metrics for events, or fail to communicate metrics clearly to staff

Burke
Burke

Oct. 25, 2019
By William Ehart

Associations that run trade shows are leaving a lot on the table in terms of potential revenue and other benefits, according to a recent study.

While most enjoy healthy profit margins, many associations do not have a strategic plan for their shows or metrics to measure their success, and are not clearly communicating those metrics to their show staff.

The study was conducted by David Rehr, director of the Center for Business Civic Engagement at the Schar School of Policy and Government at George Mason University, in cooperation with consulting company T3 Expo and executive search and consulting firm Heidrick & Struggles. Results were unveiled Oct. 10 at the T3 Expo Leadership and Trade Show Program at the W Hotel in Washington, D.C. (See below for story on panel discussion.)

Seventy-two percent of the 150 associations responding said that trade show growth was important to their overall strategic plan. Yet only 51% of respondents said they had a specific strategic plan for their event.

“The consequence of not having a road map for success likely means revenue is not being captured,” Rehr wrote in his report.

Of those associations that had a plan, 41% said they lacked explicitly defined metrics, while 20% of responding associations with show metrics reported they failed to clearly communicate them to staff.

Fifty-six percent of responding groups were 501(c)(6) organizations while the rest were 501(c)(3)s. Sixty-four percent of individuals responding on behalf of their associations reported they were event managers while the rest were other association leaders. One third of all respondents were CEOs.

Attendees vs. revenue

Other results demonstrate more opportunities to increase the value of association shows.

Only 48% of the associations said they measure member versus nonmember attendance, while another 22% percent measure it but don’t evaluate impact on revenue.

And three times as many association executives said their boards care more about the number of overall attendees than qualified attendees (that is, those more likely to make purchases from exhibitors).

Tim Heffernan, chief development officer at T3 Expo, called that result “shocking.” Heffernan drew an analogy to social media, Instagram in particular, and the distinction between followers and revenue.

“We have to stop caring about attendees, or followers in the Instagram analogy, and start caring about revenue,” he said.

The good news for associations is that profit margins are juicy, at least for most groups.

The average profit margin for an event is nearly 45%, Heffernan said. However, while 25% of respondents said their events had a profit margin of 60% or more, another quarter of those surveyed reported margins below 20%.

MEDIA IS THE MESSAGE

One of the hot topics at the T3 Expo Leadership and Trade Show Program was the role of media in the competitive landscape.

As part of a panel discussion, Tom Bohn, CEO of the North American Veterinary Community, said owning the major publications in his space—along with an online channel—enables the association to control the message, promote its trade show year round and keep out competitors.

“We no longer define ourselves as an association,” Bohn told attendees. “We refuse to use that word. We now define ourselves as a media company powered by veterinary education.

“We now have an $8 million media platform in terms of publications and an online TV channel,” he said. (Bohn joins Association for Corporate Growth as CEO in December.)

The other panelists were Thayer Long, president of the Association for Print Technologies, Marian Bossard, executive vice president of global events at The Toy Association, and Kevin Burke, CEO of Airports Council International-North America.

Bohn said owning the veterinary media space, as NAVC does with the online channel called Spark and five print publications (each with its own website), keeps for-profit competitors from posing a threat.

“We have the big show and the media, which has really kept Reed (Exhibitions), UBM and those types completely out of our space,” he said.

“We’re not just thinking about (our five-day event), we’re thinking about programming the entire year,” Bohn said. “We’re capturing more than 100 episodes for our TV channel, we’re getting articles by the leading authors.”

NAVC purchased a peer-reviewed clinical publication as well as one focused on its associate members, the veterinary supplies distributors, Bohn told CEO Update.

Redirecting traffic

Another major focus of the event was driving traffic to smaller exhibitors even though they spend less money overall.

“The (exhibitors) along the fringes are the ones I worry about, because they spend a relatively large amount of money for the size of the companies they represent,” Burke said. “How do we get them the attention they need?”

Burke said putting the biggest vendors up front can create a “closed artery” that attendees don’t go beyond, partly because big exhibitors offer liquor, food and coffee. One way to unclog traffic is to spread big exhibits and place food and beverages throughout the hall.

“If (the big vendors) move, they’re going to want something for it. And we’re willing to do that because they pay that much money. But if you have a show with five vendors, you have a small show. We want to grow, and continue to grow.”

Burke’s approach has been successful: Revenue from the ACI-NA annual conference has grown 36% annually for the past three years, he said.