The tradeshow business can be a fantastic venture. When you get it right in an industry that really needs the event, you can make a lot of money and at the same time help move an industry forward by bringing all the parties together to talk. That’s the good part. The fun part. The part that keeps me constantly thinking of new events and unique ways to provide value to both sponsors and attendees. I love it when attendees grab me as I’m walking down the hall to tell me how much they are learning and enjoying the conference.
But this post is about the bad parts. The parts that are beginning to make me wonder where I’m headed and if it’s the right business in which to stake my company’s future, my future, and most important to me – my family’s future.
I’ve taken about four days to write this post (mostly in the late evenings during our New Media Expo) and waited a few days after I finished it to make sure I really wanted to make this public. I’m also writing it for two reasons. First, writing it out helps me to solidify the issues with which I am struggling and also helps me to make sure I’m clear in my own mind about what concerns me. Second, it helps me determine if my “business radar” is working properly. That’s where you come in – if you think I’m wrong about any of these – tell me – I want the feedback.
Nobody likes a whiner, least of all me. My philosophy is if you don’t like something, quit complaining and either make changes or find something else. The issues below represent what I believe is wrong with the tradeshow business today but I’ve also proposed one possible fix to each at the end of the description. I want to call attention to them, but I also want to be part of the solution. It goes along with my philosophy that I never want someone who works for me to come to me with a problem that hasn’t thought about a solution too. Come to me with a problem – fine – but you better also give me what you think is the solution.
These 5 things make it increasingly difficult for a small company to start and grow a show. Larger events may not have the same pain because of the economies of scale and negotiating leverage they can bring to the table. But large city-wide shows have their own issues (think about how Las Vegas hotels triple their room rates during CES – a problem CES has had to deal with for years because of the sheer size of the event).
But these are issues that I think threaten the very industry itself – and certainly threatens the smaller show organizers in the business.
Here we go:
1. High speed Internet costs. Nearly all convention centers have long-term, exclusive agreements in place with high speed Internet providers and the prices they are charging are ludicrous. $1,500 for three days of a slower, less-reliable connection than I get at home for $40 per month is asinine. Yet there is no incentive to provide faster, more reliable service at a reasonable price because they have the exclusive contract. You want Internet? You pay us what we ask. Without any competition, this will never change. I’ve had several exhibitors turn us down for booth space for this reason alone. It’s not that they can’t afford it. It’s just that they refuse to be willingly ripped off to participate – and I don’t blame them one bit.
Solution: This one is easy. Open up the service to outside vendors who can compete for the business – prices will drop at least 75% within a year, guaranteed.
2. Drayage. Drayage was a new term for me when I entered the show business. For the folks that may be reading this who don’t know what this is, it is simply the fee to have your booth shipment taken from the convention center dock at the back of the hall to your booth. Why is it that it will often – make that almost always – cost more to transport a large box 50 yards from the roll-up doors of the exhibit hall to the booth than it does to ship it from New York City to Las Vegas? Here’s why – because they can. If you want your stuff, you have to pay. I haven’t had a single person explain to me the economics of drayage and why it costs so much – believe me I’ve asked. Every tradeshow I’ve ever done there has been at least one company who refuses to return the following year because of the drayage bill they received. It occurs most often with first-time exhibitors at smaller companies – the very companies a growing industry needs to have support the show as they grow.
Solution: This one is tougher because I don’t know why the heck the price is so high in the first place! But I would say unions need to realize that high prices will result in less work for their members down the road so contracts need to be re-negotiated to encourage MORE advance shipping rather than exhibitors trying to find crazy ways to get stuff to their booth without being noticed (which results in less work for the workers anyway.) Higher volume with more reasonable prices will, I believe, actually result in higher revenues for general contractors. You wouldn’t believe the things I see exhibitors doing to avoid drayage fees.
3) The Pay to Play Mentality. For the last five years I’ve fought hard against offering any type of speaking opportunities in return for booth space or sponsorship dollars. I refuse to allow any sponsors to speak just because they have written a check. The trouble is, there are plenty of conference organizers out there willing to put a VP of Business Development on some crummy panel in return for money. Unsurprisingly, that speaker then spends his time on the panel discussing how great their company’s product or service is, subjecting the attendee who paid $995 or more to a live commercial. And why not – he paid to speak and wants a return on that investment! If I had a dime for every time a PR person told me, “If we don’t speak we’re not exhibiting.” But here’s the thing: if “we” (as an industry) continue to promote this as business as usual, attendees WILL stop attending. You may have noticed that attendees don’t need us anymore to get together. The Internet affords them the ability to aggregate, discuss and even get together in person without having to endure boring, salesy panels. I’ve worked hard to hold the line, but lately I’ve been wondering more and more if I can grow a show and still turn down exhibitor dollars to speak when it comes with the requirement to speak – because there are plenty of folks who WILL gladly take their money.
Solution: Legitimate conference organizers need to band together and promote the fact that their conference is not a “pay to play” environment. Shame the other conference organizers into playing it straight so that attendees know the difference between the two and attend only those events they know will be true educational experiences.
4) Room Blocks & Attrition. When I first started shopping around a new tradeshow idea last year, I contacted 8-10 hotels in different areas of the country, including Las Vegas. In order to use three ballrooms and two smaller meeting rooms, most wanted at least 2,000 room nights in the contract and a minimum of $50,000 in food & beverage orders AND a rental fee for the space. When most show organizers are finding that paying attrition for unbooked hotel rooms is the norm, isn’t it time to consider that the space to room nights ratio is out of whack? Even to use single ballroom for two days, hotels are expecting that every single attendee will stay in the hotel for the maximum number of nights – it just isn’t going to happen. With more events working to attract local attendees because of gas and airfare prices rising, it’s simply not reasonable to expect that many attendees to book in the hotel. As a small organizer, I’m forced to either sign a contract for room nights that I know I’ll never be able to fill, or go to a convention center and pay regular rental rates and get a small room block at a nearby hotel. I’ve decided not to launch several events simply because I couldn’t find a way to make the contract work.
Solution: Hotels are, of course, more willing to negotiate on this point when business is down and I imagine it is in this economy. Contracting for an unattainable room block in order to get the space and just hope for the best isn’t working. I use convention centers when possible so that you won’t be on the hook for a large room block. I’d rather pay the rental and not pay the attrition. A solution Sue Pelletier mentioned recently about a site to sell unused hotel rooms from a block is also a great idea. Hotels need “heads in the beds.” I get that. But there must be creative ways to have smaller organizers book space without risking the financial future of the company on one event because of enormous attrition penalties.
And finally – the biggest reason:
5) Lack of Control Over The Customer Experience This is a biggie. I’m a control freak. Anyone who’s read a couple posts here can see that. I’m adamant about how our staff treats our exhibitors and attendees. Every phone call, every meeting, every meeting we have with either of them – any touchpoint at all really – must convey how important they are to us and how much we appreciate their business. But the trouble begins when I send out our Exhibitor Services Manual. There are so many vendors the exhibitors need to deal with for even a small booth. All of those touchpoints and contacts are out of my control and because the vendors are typically exclusive, they have no incentive to treat my customers well. You can tell me all you want that “it’s our customer too” but it’s just not happening because I hear about it every day. Here’s the kicker: after the show, they don’t remember that it was a lousy vendor that treated them poorly – they remember that it was at the XYZ Show they were treated poorly. Show management takes the blame for the difficulty they experienced with the Internet providers, the electrical firms, the carpet vendor, etc.
I’ve been forwarded several emails from my exhibitors from convention center vendors and the tone is simply shocking. I would never dream of sending out the types of messages they send to my customers. My staff and I can treat them like royalty but the vendors don’t and it’s frustrating as hell. A week after the show, it’s not that vendor they remember who treated them badly, it’s the overall experience of Tim’s show.
Here’s an example. One of our sponsors at a recent event had a terrific idea of incorporating gourmet soda pop tasting into their booth and hospitality suite. It was a terrific play on the messaging they were delivering at the show and would have been one more thing I could have helped promote as a reason to attend the event. Someone’s not going to travel to a show just to taste soda pop – I understand that – but it was just another small thing I could have piled on as one of hundreds of reasons to attend the Expo. However, the food and beverage contractor wanted them to pay 75% of the total cost of the soda for the “buyout rights” in order to do the tastings. So, they were going to have to buy all the soda but then pay another 75% on top of that to the convention center sales & catering department. The prices are exorbitant – but that wasn’t really the issue. My exhibitor felt like their contact was smug, bored and unwilling to find any middle ground solution that would make it viable. Their attitude was, “take it or leave it.” My excited customer was left feeling terrible – not about the catering vendor – but about our event and what a pain in the ass it was.
In the end they drastically scaled back the promotion – again, not because they couldn’t afford it, but because they were unwilling to be forced into paying a company that had such obvious disdain for their customers. A buyout is expensive – he knew that and was willing to pay – but the attitude of the vendor put him over the edge. The President of the company said to me, “Tim, for a while today I was thinking how much easier it would be to just spend the $30,000 we’re spending on your show on radio ads or search engine optimization or something else. I know it’s important to support the show and the industry, but it’s becoming harder each year to justify it.” This – from the most enthusiastic supporters of our event.
(Don’t even get me started with our own F&B expenses: the cost for a 5 gallon decanter of water in the meeting rooms – $75 per day.)
Solution: All of the vendors who provide services to exhibitors for tradeshows need to wake up and realize that if the customer is not treated with respect at every single step, we all lose. When I send my customers over to work with you, I am trusting you to treat them in a way that makes me look good – in a way that makes us ALL look good. We need to work as a team so that tradeshows are regarded as a fantastic way to spend marketing dollars, not a nightmare necessity that they are forced to endure. Bottom line: When I hand over my customer to you, you’re working for me and you darn well better treat them well.
Each of these things, especially when combined, raise the bar so high in terms of cost and “hassle factor” that generating real ROI is nearly impossible for exhibitors. In the age when every click and ad buy online is tracked and measured, it’s simply become faster and cheaper for companies to advertise or get exposure in other ways, and that’s a shame. Yet tradeshows and conferences create more trusting relationships that could never be achieved via online advertising or social networking. I truly believe in the value of face-to-face events and want to see drastic changes made to the business so it survives. Not just survives, but flourishes. Organizers can’t do it alone. We need our partners in the business to help – now!
So that’s where I’m at today – deciding if I want to continue on and fight the good fight or move on and dedicate my limited resources strictly to educational conferences (where I can control the sponsor experience more effectively) and Internet ventures. Just to be crystal clear, I haven’t made any decisions about this. But I wanted the tradeshow industry to know how serious I am about the fact that I believe these things jeopardize the tradeshow business as a whole. I’m speaking next month at the Event Technology Expo in Washington DC. I’m looking forward to talking with my colleagues in the business about these issues.
