By Dave Lutz, CMP, Managing Director, Velvet Chainsaw Consulting
I’d estimate that about 25 percent of you who are reading this need to consider sunsetting your expo for either your annual or topical conference.
Hear me out on this. While most associations crave non-dues revenue, sometimes the expo portion of your program isn’t delivering to the bottom line, nor is it highly valued by your paying attendees. Here are five business indicators to help you analyze whether it’s time to close up shop.
- Renewal rate — If your expo is not able to retain at least 75 percent of your exhibitors each year, you have too much churn. Whether your revenue is steady or not, this is a huge concern. Your organization is going to spend too much money acquiring new exhibitors vs. building on past success.
- Exhibitors not invested — One attribute of a healthy trade show is that your exhibitors help drive traffic with you. They’ll tell all of their customers they’re participating. They’ll distribute hall passes. They realize that their success is highly contingent on their ability to partner with you in attendee acquisition. If your major exhibitors are not doing this, you have a problem.
- Bribery drives traffic — If you need to use food and beverage and booth drawings to get attendees to spend time on the show floor, you’re forcing it. I’m not saying these are bad tactics, but more often than not, they are desperate moves to save a dying expo. The big question you need to ask is, are we delivering on the networking and education promise we made to the paying registrants with these tactics?
- Education and solutions — Today’s business mentality has shifted from “always be selling” to “always be helping.” If your expo feels like a rummage sale instead of a solutions-based and educational experience, you need to change that fast. Some shows have seen the light and only take money from exhibitors that have innovated something new or provide the kind of solutions and guidance that key attendees value highly.
- Price objections — According to CEIR, the average price for booth space is $31 per net square foot. If you’re priced below that and throwing in two full conference registrations to sweeten the pot, and you’re still seeing churn — price is not your problem.
There Are Options
Before you make a go/no-go decision for your expo, consider other revenue streams to diminish your risk. In most cases I’ve seen, we’ve determined that many of the exhibitors could be converted to paying registrants. Some of the larger exhibitors could be persuaded to shift their investment to sponsorship. All in all, the revenue-loss risk was low, but it was clear that an expo-free event was preferred by the attendees and that the expense savings were considerable.
Dave Lutz, CMP, is managing director of Velvet Chainsaw Consulting.
Breakout: Case in Point
In the meetings industry, trade shows have lost their luster. The only shows that appear to be doing well are appointment-based events with a hosted-buyer component. (Kind of reminds me of time-share condos, but that’s another article.) PCMA’s Convening Leaders annual meeting attracts a ton of suppliers, and they all pay a healthy registration fee and/or pony up for sponsorship. If PCMA were to add an expo to its annual meeting, my bet is that it would not improve the bottom line and that key attendees would opt for networking and education over booth browsing.
To best analyze your situation, be sure to run a separate P&L for your expo only. You’re probably not delivering as much to the bottom line as you might guess.