Understanding Current Economic Challenges and How to Position Your Events for Success
In our recent program, Planning for the Possible: Keeping Your Events Thriving During a Recession, we spoke with Founder, Chairman, and CEO of The Federal Savings Bank, John Calk, who shared his perspectives with us about the current state of the U.S. economy.
Are we in a Recession?
Right out of the gate we asked John if, in fact, the United States is in a recession, to which he responded that the true definition of a recession is “two consecutive quarters of negative GDP growth” and given the latest estimate for Q2 GDP, John noted “we are in a recession.”
Yet John was quick to note that technical definitions aren’t always the most important consideration. “The bottom line is this – whether you’re in, technically, a recession or not…what’s really important is that these words translate into emotion and actions that have lasting effects on individuals.”
Commenting on recent U.S. government and Federal Reserve actions to counter these economic challenges, John suggested that “…what they can never get their arms around is the passion, and fears, and anxieties that reside in the American public, and getting that timing right is really what sends us over the cliff.” Further on the impact of inflation on the American psyche, John noted that “inflation creates such long memories inside of you,” and “that long memory of the pain of inflation and how long it sticks with the consumer…that’s the biggest threat that we have.”
Economic Challenges Create Opportunity
Ever the optimist, John quickly shifted the conversation and focused on the positive. “When these situations arise, it creates an amazing opportunity.” He went on to pose a key question to all organizations facing these economic challenges: “What are we going to do as business owners today?” He continued with salient advice to answer that very question. “We do the same things that we do every day – (we should) take advantage of opportunities that will develop during this crisis. I’ll right size my business, I’ll get my cost structure aligned, things will slow down, prices will ease, and we’ll drive on again in the next cycle like we always do as successful entrepreneurs.”
John offered an adage to drive home his point: “The past is lost to us, and the future is uncertain. Really the only thing you can control is right in this moment.” He extended the thought by offering event owners some critical advice about how to reinforce their value proposition. John suggested that event owners focus on two objectives: “One, how can I help you generate more revenue from this event? And two, how can I help you save more money? Focus on these two objectives and it’s going to be a big win!”
Navigating Rough Waters – Practical Advice from Event Pros
With John Calk’s economic and market analysis fresh in our minds, we turned to two leading event professionals – Hillary Smith, SVP Strategy + Creative with PRA Business Events, and Daniel Lotzof, Chief Revenue Officer and Chief of Staff with Notified – to help us think through how event organizers should respond to these challenges.
Event Organizers Remain Optimistic, but Are Increasingly Aware of the Threat
Dan opened by offering a sense of optimism about the importance of events. “We’re coming out of one period and really moving into the new norm for events; and the recession is something, I think, we’re going to all have to be dealing with for the next decade. Not that this recession, by itself, will last that long, but we know that things are cyclical, and they go up and down, but events are here to stay no matter what the market conditions are.”
Hillary shared that many of her clients have been laser focused on delivering in-person experiences for 2022 and are just starting to get engaged with the emerging economic situation. “So, I feel like there’s a bit of a game of catch-up,” she noted. Still, Hillary sees strong demand for in-person events through Q1-Q2 of 2023, and yet “…we’re starting to hear, even in the last 30 days, around ‘hedging’ – what are their ‘Plan B’s’…and how they can do more with the same,” continuing that “…we haven’t seen real cuts to budgets yet, we haven’t experienced cancellations…but I think we’re at that precipice, where we can start to smell it and see it on everyone’s minds and so we’re starting to have those conversations now.”
Shifting Views about “Hybrid” Begin to Emerge
On shifting interest around hybrid event modalities, Hillary noted that “we’re seeing more of an interest around technology and making sure that technology is at the forefront of those conversations and in the (event) plans. In the past that was a big reactionary afterthought. Planners have an opportunity, today, that they’re seizing – they’re much more comfortable talking about technology, they know the users are more comfortable using technology and embracing it for events.”
Dan added that one of the main things they’re hearing from clients is the desire for “optionality.” Coming out of COVID, he explained, many organizations were thinking that “we’d be in this “hybrid world’ but the definition of ‘hybrid” is very important. I think people historically thought that ‘hybrid’ only meant that we are going to live stream all the content that was available at the in-person event to my digital audience. And that, is starting to morph, finally, and people are starting to understand that ‘hybrid’ doesn’t have to be an identical representation, or replication, of your in-person event.”
Has the Event World Changed Indelibly?
Dan continued by suggesting that event organizers need to remain flexible in their event design: “I think the future is going to involve a digital component, because it is too risky – whether you’re talking about a recession, or you’re talking about travel problems, or you’re talking about the next, Monkeypox, or whatever the next virus is that we’re all going to hear about…people can’t afford to be caught having to be reactive. Right now, we are in this emotional pull-back to in-person events, but emotion is not a strategy. What the world is really realizing is that it’s changed forever, and we all need to figure out how to plan for the future, which is de-risking our events, providing better experiences for our sponsors…What we’re starting to see in terms of attendance from a data perspective, is that the attendance levels are 65% of what they were in 2019 (pre-pandemic). Even if those numbers rise to 75-80%, that’s not a sustainable model for any event organization to build upon. So, I think we’re definitely going to see how technology shifts and changes that.”
We pressed Hillary on Dan’s notion that the event world has indelibly changed coming out of the pandemic, to which she stated “I wholly agree with Dan. On the digital side, I think 100% digital is here to stay.” She continued with advice for event organizers: “You have got to have a flexible plan that involves digital as well as in-person events. They’re no longer two separate things, it is one, aligned strategy. In the past we looked at events very episodically, very individually, and in silos. And now the planners who are able to focus on proactive, rather than reactive planning…are taking a look at their entire events portfolio…to make sure they have the agility and flexibility to have that holistic approach.”
Event Attendee Expectations Have Shifted
Hillary added that attendee expectations have also changed because of experiences during the pandemic, that there is now a “different value of time,” and that event professionals need to better appreciate the value of the time their participants invest in their events. “I do think that for 2023, organizations are going to have to focus on ‘the human factor’ for the decisions that they’re making, not just the financial piece.”
Commenting on the ‘human factor’ Dan noted that “…events, historically, have been kind of exclusive. They haven’t been the greatest, diversity, equity and inclusive format, and when you put them online, or you make them more accessible, or you provide optionality to your audiences, you can be more inclusive.”
Actionable Advice to Ensure Event Success
In wrapping up the program, Hillary offered this advice with respect to engaging event sponsors: “align yourself with your tried-and-true partnerships, engage them as early as possible, have those strategic discussions, and give them a seat at the table.” But she cautioned to “…expect that the supply chain isn’t going to wait for you. Unless you’re signing, no one is holding the supply for you.” The implication is that event planners need to get ahead of the game in terms of locking in sponsors for their event programs before sponsor budgets get directed elsewhere.
Dan offered a timeless strategy recommendation to event organizers on how to balance their event investment allocations: “…you need to identify the goals and objectives of your event, and your audience segments, and what you’re trying to get out of them…and then determine where to make the investments.”
Although economic conditions continue to present challenges to event organizers and their participants and other key stakeholders, our experts remain bullish on the value of events and the long-term prospects for the industry.
You can watch the full program here: https://youtu.be/eOz_7bB4ghY