As a result of the coronavirus pandemic, by now, you have either canceled or rescheduled your 2020 live event, are keeping a close watch on it as the date nears, or decided to launch a new virtual or hybrid event. Regardless of which of these options you’re pursuing, you will need to have the capabilities to deliver a virtual event in the future, and most likely forevermore.
At the moment I’m writing this, I don’t foresee any significant live events happening for the balance of 2020. The larger unknown is Q1 and Q2 of 2021. Will live events be open for business as usual or at all? The future is uncertain, but the genie is now out of the bottle. Not only are virtual events here to stay, they must be compelling and profitable.
For most associations, the annual event represents anywhere from 20 to 80 percent of its total revenue. Therefore, virtual events must generate significant revenue and contribute at a much higher level of financial performance than previously.
For virtual events to succeed and excel financially, they must deliver on the fundamentals of what live events have always done so well — engagement, learning, commerce, community building, and practical outcomes for all participants. Furthermore, they must deliver on a comparable level of revenue for the event organizer to ensure the organization’s financial viability.
In these early months of the COVID-19 crisis, I’ve been working with dozens of associations and we’ve studied more than 100 virtual event offerings. We’ve seen some amazing solutions — and plenty of missteps. Here are the top five fatal flaws of virtual event design that can lead to financial failure — and how to avoid them.
Flaw #1: No event CEO. The individual in charge is the No. 1 driver of virtual event success. When a committee, group of volunteers, or an internal team tries to design a brand-new initiative like a virtual event without an accountable owner who has ultimate decision-making authority, your odds of failure go way up. The solution? Appoint an executive as the virtual event CEO. Write a job description, tie their compensation to the success of the event, and give them decision-making authority and accountability for results. Nothing ensures success more than this one decision.
Flaw #2: No clear business model. The reason brick-and-mortar retailers took so long to master e-commerce is that they built their new online model from what they knew how to do versus starting from scratch like Amazon. What got you here won’t get you there. The good news is you don’t have to start from ground zero. If you want financial advice, ask someone who has generated wealth. If you want to learn how to cook, take a master class by your favorite chef. And if you want a successful virtual event, hire an expert who’s designed and executed hundreds of events like the one you want to produce.
Flaw #3 Lack of an economic proforma. Show me the money — before you start. Expecting financial results from your first virtual event that are anywhere in the ballpark of your live event isn’t going to happen. Over time, however, you will build an economic model that works. Clear objectives have never been more important. I’d start with the expectation of 15 percent of revenue coming from delegates and 85 percent from underwriters and sponsors. A virtual hosted buyer component is essential as is a sponsored webinar model. New best practices have emerged — “no money, no mission” has never been more true. Your virtual event must be an economic engine. Break-even is not acceptable.
Flaw #4: Picking the platform before designing the event. This flaw can be a deal-breaker. Selecting a technology platform vendor first and designing an event based on what the platform can do is a backwards approach. Structure follows strategy. Determine your event strategy first and then choose the right tool to implement. Virtual events already have a bad reputation. There’s a reason they haven’t taken off in the last 10 years. Today, your audience expects to be wowed. Start with a clear vision, a solid strategy, and a good plan. Then decide how to execute.
Flaw #5: No clear purpose. What job does your event do? Do you know this answer for each segment of your audience? We all expect something different from a virtual event. And we have come to expect a different experience for a virtual event compared to a live event. A virtual event shouldn’t be a consolation prize. It needs to be treated as the main event —dazzling, irresistible, and indispensable so that your audience can’t wait for the next installment of your event mini-series. Your competition has changed — it’s now Netflix, Twitch, and Quibi. Game on.
Don Neal is founder and CEO of marketing, strategy, and experience agency 360 Live Media.