September 7, 2010 by Jeff Hurt
Image by Daniel*1977
You sit down to dinner with your family.
Within moments of your first bite, the phone rings. All eyes land on you. Will you answer it or screen the call?
You decide to answer the phone and are greeted by a cheerful voice shouting, “Congratulations, you’ve just won a free all-expenses paid trip for three days! All you have to do to claim your free trip is come to the following address on Saturday, spend 90-minutes listening to our speaker and take our tour. You don’t have to purchase anything. You don’t even have to like our speaker. Can we count on you to attend?”
Do you take the free trip and attend the seminar? Do you hang up the phone? Or do you ask more questions?
If you are like most American citizens, you’ve received a similar phone call. Or a direct mail piece with winning prize information.
And if you’re a meeting professional, you’ve likely received a similar phone call or emailat your work inviting you to attend a hosted buyer program complete with free airfare, four- or five-star lodging, meals, registration and education.
Just like these time share congratulatory phone calls, hosted buyer programs are on the rise within the meetings industry.
Most hosted buyer programs are for qualified senior-level meeting professionals, and business and incentive travel buyers that have decision-making authority and buying authorization. Yet, most meeting planners are not decision makers. They are influencers. Influencers are defined as buyers who can’t say yes but can say no.
The challenge with many hosted buyer programs is that typically senior-level meeting professionals know most of the players in the industry. They have built long-term relationships with their preferred suppliers and vendors of choice. Unless they are going to a new part of the world that they have not personally visited, they usually don’t need to take another trip to meet with suppliers and vendors.
And what senior-level professionals want to fill-up their meeting dance card with required supplier appointments and group presentations? It’s like exhibitor speed dating on steroids where you are required to meet with others in order to get free transportation, lodging, food and registration.
So why do suppliers pay upwards of $4,500 in participation fees, plus travel, lodging and expenses to meet with qualified buyers. In theory, this sounds like a great way to get leads and prospective clients. Some suppliers see it as a positive public relations move. But is the ROI really there? Are planners accepting these invitations and changing their bias because of the free trip?
In the 1990s, Americans experienced a rise of good news congratulatory phone calls and direct mail marketing pieces. Here’s how the timeshare process usually works.
Timeshare representatives invite several hundred people to a presentation that explains the terms, benefits, conditions and price of the property or properties they have to offer. Vacations packages, vehicles, cash and other prizes are offered in exchange for attending the presentation.
When you attend a timeshare presentation, you enter a large room with festive music. You sit at a table with a designated presenter and the pitch begins. You can’t hear what is being said at tables next to you but every few minutes the music is turned low and another buyer/winner is announced. Typically these presentations are high-pressure sales pitches and closers who won’t take no for an answer. They will do anything possible to get you to give them additional information, sign an agreement or write a check. Like a game of three-card Monte, the presentation is about distraction, misdirection and luring you to a purchase.
So how are hosted buyer programs (or destination fam trips for that matter) different than the timeshare presentations? Are hosted buyer programs just reinvented timeshare prize promises or are they the magical silver bullet for an ailing tradeshow industry? Do you think hosted buyer programs are ethical and worth attending? How do you feel about them?
Filed Under: Attendance Marketing, Business Model
There is a big difference between timeshare offers and hosted buyer programs for the meeting industry. Meeting planners almost always require a facility to host their events. But the “average Joe” does not require a timeshare to go on vacation. If meeting planners are attending hosted buyer programs without any interest in speaking with hotels about their facilities, then this is a definite concern.
‘@Ken Excellent point about the differences between vacationers and meeting professionals. The challenge is that often the meeting professional is not the final decision maker on the location or venue, just an influencer. And, I can’t tell you how many times I’ve been pre-qualified to attend these hosted-buyer programs even though I was not in need of contracting a venue or hotel.
[…] This post was mentioned on Twitter by Keith Johnston, Dave Lutz. Dave Lutz said: RT @JeffHurt Hosted Buyer Programs: Silver Bullets Or Scams http://bit.ly/d5Gy6B #pcma #tsnn #iaee […]
We’ve been sitting on this post idea for quite a while. Since our industry seems to be leading the charge on hosted buyer events, it’s got Jeff and I really scratching are heads. Basically, buyers/influencers are flying to a central location to look at pictures, videos and brochures of hotels and destinations that they could also see at their desk. Yes, they are meeting people and growing relationships, but at what cost?
I’m thinking the serious buyer isn’t going to miss the best shows. The serious, ethical buyer is not going to want to influenced or required to meet with vendors that they don’t pre-qualify. They don’t want to feel like they owe anyone.
I see the names of some of the folks going to hosted buyer events and know their buying power/influence. For me, it all smells like a boondoggle, another way to get exhibitors to chip in some more $’s, but at least the activity is measurable.
I know the planners like the free pass, but how many exhibitors are seeing business close that they wouldn’t have won otherwise?
Do you think our industry can support all of these hosted buyer programs? Want to make some bets on the first travel and incentive show that goes down the tubes?
As a senior-planner that was recently a Hosted Buyer at MPI, I found it to be a great experience. I work for a stingy corporate company who won’t spend a dime on education so forget about being able to attend the best shows. I plan events across the United States with some incentives in the Caribbean so it is almost always a new place for each event. I was delighted to meet with new properties that I had not heard of and suppliers that I was unfamiliar with. Have I closed a deal yet? No, though I have gotten some bids. Am I the final decision maker? No, but fortunately they respect me well enough that if I recommend a property they accept that it will be great. For me it is a win-win. I find cool places that I might not have heard of, get the added benefit of some educational seminars, and peer networking. But hey, what do I know, I am also the person that talks to vendors at the trade show, something else that appears to be dying.
‘@Lacey Thanks for reading and adding your thoughts. You are obviously the idea qualified senior-level planner for hosted buyer programs. It works for you. Here’s another way to look at your experience: What happens if you don’t actually buy something from one of those vendors that you saw at the hosted buyer program? The expense to the vendor has just increased and their ROI has decreased. It’s only a win-win if you actually purchase from them. At least that’s how I see it.
@Sue Thank you for adding your thoughts to this discussion. You’re point about traditional tradeshows becoming boring resonates with many. We need to find new ways to innovate and create excitement. I also like what you said, “…Both sides need to screen well…” So true.
@John You make an interesting point: “Those who come on their own dime, or their own company’s dime are much more serious about the business.” That’s causing me to think some more about this issues. That’s a good thing!
@Brad Thanks for adding your insights. I agree that other industries are doing this. Interesting enough, the Pharma and Medical companies are dealing with increased governmental guidelines on what they can offer for free and what is considered “education.” I also really like your simplicity that “host” means someone else is paying and “buy” means there is an expectation that the receiver of program will buy something.
LOVE THIS ARTICLE! Why are all the shows pushing this down our throats? This deep throat a la meetings 101. I have been told that there are new reps who don’t know you at these shows, but come on, I have long suspected that somewhere in meetings land, there’s file on me, one which says she’s a small player, but she’s a MeCo moderator.
When I ventured to Grand Rapids for RCMA in 2009, I met alot of OLD friends and this was my first time out of Chicago for a tradeshow. One of my hotel reps from 2000 saw me and ran across the show floor to bring me back to his booth. Granted there were only 120 planners at RCMA that year; but I was a newbie at the show, so I thought I’d know about 10 people-boy was I wrong!
Traditional tradeshows have become boring for me, so the concept or rather the seminar offerings of Connect and Rejuvenate sound interesting.
Maybe I have to go to one and do as I did back in 1980 or was 1981 when I worked for a timeshare investor who was about to set up his own ‘machine’; my job was to observe the method then DISTRACT THEM–boy did I ever, I claimed the ‘investor/my boss’ was ill and I needed to go find him because he said he would meet me at the event and had not arrived–this was HI, so a LOUD BOUNCING BLOND was totally distracting. Wonder what a Senior Citizen Planner has to do? Do I make appointments with CVB’s I know and ask them how the show is going and hand them candy? Six Minutes does not cut for me; I need 10-15 minutes per vendor, if I am adequately going to talk about my clients and get feedback on the different venues.
For adequate hosted programs, both sides need to screen well and what if you don’t make the required number based on your (unflexable) requirements.
What do you think?
Sue
Sue Walton Senior MeCo Moderator
I hesitate putting this comment out there, as I for one to appreciate all the work the CVB’s do to make my life, and my colleagues life easier so we can focus on promoting our convention to drive traffic to the city – it’s a win-win. I am a firm believer in partnering with a city to maximize the value of our convention to a given city.
In all openness, who doesn’t love a free dinner? That being said I learned a long time ago there is nothing free in life.
I don’t think hosted buyer programs really work. And we do it plenty ourselves too. The biggest vote of confidence is the vote of someone opening their wallet. Those who come on their own dime, or their own company’s dime are much more serious about the business.
“Who doesn’t love a free dinner”???
This subject still fires me up as we spent a good part of the 1980’s and 1990’s dealing with “Fam Trips” and participation by planners who (like “work for a cheap company” above) saw these as entitlements to their position.
Our industry is not the only industry doing this. Pharmaceutical companies, equipment companies in the dental field (which aren’t as committed to pharma code as medicals) do this to lure “freebie chasers” away from trade shows that also provide education.
I’m always amused by those in our profession who make their living off of trade shows and events, and produce many of the events that their audiences are pulling away from, yet find going to events that are designed to provide education on improving these events “boring”.
Hosted buying has two key words…”host”, meaning there is someone paying the freight here; and “buy” which is what you are EXPECTED to do at the event because you accepted the money. Pure and simple, “You accepted the money”.
Association events are events where the attendees education is funded by those individuals who have products/services to offer. There is no buying expectation, as education on products and services is a real part of that. However, to be “bored” to walk a show that funded your continuing education is, to me, unprofessional.
As both a timeshare and a meetings industry “veteran” (my father never met a deal he could pass up – we spent many critical vacation hours cooped up in a tiny room listening to endless hard driving sales pitches) I can assure you trade shows such as IMEX and EIBTM bear no resemblance to the timeshare scam.
These shows offer hosted buyers (serious business professionals) a great opportunity to build and maintain relationships as well as gather new information. Our clients rely on our knowledge and expertise to ensure their meeting is held in the right place at the right price resulting in meeting their company goals. With all of the budgets cuts, clients can’t afford to waste time or money. As hosted buyers we are able to learn about new products and services as well as find out which are no longer up to standard. It is true that we have established supplier relationships, but it is also true that if we don’t offer our clients the best of the best, someone else will! Hosted buyers at IMEX in Frankfurt this year placed orders of USD450 million with exhibitors DURING the exhibition and expect to place over USD2.2 billion of business with IMEX exhibitors in the coming 12 months. Certainly a strong ROI for exhibitors! As a hosted buyer at IMEX I do have to fulfill a certain number of appointments, but with just 2.5, 10-12 hour days and thousands of exhibitors, I don’t have time to waste so I carefully choose who I meet with. Oftentimes my colleague and I strategize on who we meet with so we don’t overlap; we have too much ground to cover. A majority of hosted buyers (79%) are like me and spend 12 hours on the show floor (I have the battered feet to prove it!)
Finally, exhibitors also have limited budgets and they spend their money where they know they have a proven return. I frequently speak with suppliers about shows they attend and they never hesitate to tell me whether a show was worth the expense, travel and time out of the office. If it wasn’t worth the time and expense, they won’t go back, period, they have too many other opportunities to invest their dollars in. Certainly a single international sales trip where a supplier MIGHT meet with 50-100 people over the course of a week can easily cost as much as participating in a trade show such as IMEX/IMEX America/EIBTM/AIBTM where they will have access/exposure to 2,000+ qualified buyers.
In short: time share scam = uninterested “hostages” crammed into a small room waiting for their release. Professionally run trade show = eager buyers hungry for new contacts, information and opportunities. I know which one I choose.
‘@Judy Thank you very much for the thorough and thoughtful reply. Great summary point: time share scam = uninterested hostages; professionaly run trade show = eager buyers hungry for new contacts. Love it.
Jeff/Dave, I must say I am suprised about of your broad brush statements regarding your jaded view the buyers summit model.
The “boon doggle”, “timeshare” mindset is no where near any buyers summit I have ever personally heard about in the market. Companies like Gartner’s Vision Events (now part of UBM), VerticalXchange, Reed and others have proven this model can be highly effective when broker key relationships where there is a need on each side.
If done correctly, a buyer’s summit experience can create value on both side of the equation. Talk about ROI-you are there hero for delivering true value.
The “hosted buyer” has a specific need (you should know this because you qualified them) and the sponsor has a product they want to sell to fill the “need”. When there are complex buys, long term needs and/or a specific match, it can be spot on.
In fact, at a recent buyer’s summit I organized, over 70% of the “key” buyers could not have attended the trade show due to lack of a travel budget. Let me tell you, these guys were spot on and I would welcome them back anytime.
I believe there are hybrid solutions that no only wrap around the traditional tradeshow (which is why the ROI discussion is so big with vendors who exhibit), and also to support stand alone events when the proper due diligence has been done to determine if the market can support the event.
Yes, there will be those who do it poorly, but as we all know, they will have a one off event and then be gone.
I would welcome both of you to attend the next buyer’s summit we will be organizing so you can get a real world view of the experience.
I can’t host you because you are not a qualified buyer :-), but I am happy to have you as an observer/guest. I would then like to see a new write up after you come along and look under the hood.
‘@Judy and Nancy, thanks so much for your comments! Our post is based more on our knowledge of the meetings, travel and event sector. As someone who used to run one of the largest 3rd parties and that has consulted with the other three largest 3rd party intermediaries, I really question how much incremental buying is happening, the qualification process of some organizers and the moral obligations that someone that is being hosted has in the process.
We really believe that if a show offers enough education and networking value, it’s worth investing more than just time. The group and meeting business is slowly but surely being commoditized. Before, relationships really mattered. A planner/buyer needed to go to shows to be the most up-to-date, but now planners/procurement profs do on-line searches, put everyone on a grid and reach out to their growing networks for recommendations.
Quite often I hear about planners that are going on these trips and know that they either 1) shouldn’t have qualified 2) don’t have buying authority or 3) are attending more for personal than business purposes.
I’d love to see an event outside of our industry where this model is viewed as one that delivers incremental revenue. Feel free to keep us updated on what shows are seeing success and how they are measuring it. Is anyone auditing these(incremental purchases) like you might for do an attendance audit?
Speed dating is not a professional way to build a business relationship. I need more than 10 minutes to adequately describe my clients needs (there in lies the pressure associated with time-shares and the putting on an act to be attractive to the opposing side). But some of the opposing side who think they’re the cats meow and are the perfect fit; just aren’t. I love CVB’s and strongly prefer them to National Sales Offices. (Full disclosure,wearing my volunteer hat as Building Rental chair of my local ethical society, I am a member of Chicago’s North Shore CVB). I like to deal with second and third tier markets, but if they do not have direct flights and affordable airfares from where cities where I have participant population centers-ie-NY/Philly/Chicago, then they’re a no-go.
Read, quickly, all the posts and find it an interesting discussion.
Is motivation an issue in all this? Is coercion (by the sponsoring org. to the hosts) part of the sell to get people there? How is the ‘hosted’ money used? How much do they pay? (I have no idea.)
What about all those who would like to attend to get the education and can’t -either because, as Lacey said, they work for those who won’t pay for education, or bec. they work for an org. that can’t pay or they are like me, self-employed and would love to have education funded – and perhaps aren’t judged to be “qualified”?
What about those who make all their appointments AND who find that those appts. conflict w/ education time?
Is this really about the sales oppty. v. good & necessary education? Is it more about sponsorship for the meetings themselves?
Does a hosted buyer program make the experience really rewarding? replicable?
And what about something like ConnectMarketplace where the sellers make appts. w/ the buyers?
What about getting everyone into education seminars where they can form relationships and then talk later about how they can help each other?
Dunno — this is a conundrum and my “gut” finds it like those calls for timeshares.
I have been to several of the hosted buyer programs and found them to be very beneficial, for both me and the suppliers. In April, I went to GIBTM in Abu Dhabi. I was working with a client on a lead for Dubai at the same time. It was great to be able to sit down with the hotels and talk in detail about the lead we were working on, as well as answer any questions that they had about the program. Since my client was unable to do site visits, I drove the hour and half to Dubai, and did 11 site visits of some of the hotels being considered (in a day and a half). I was able to come back and deliver a full report on the hotels along with pictures and the hotel I recommended was selected for the program. Now having seen these hotels in person, I feel I am a much better resource for my clients and better equipped to to contract business in the UAE, making me a better partner for the hotels in the region.
One thing I have found useful, is before going to one of these major tradeshows, is to call my clients and see what locations they will be considering in the next year. That way, I can target those people I will be working with shortly. So at IMEX, I was able to meet with hotels and DMC’s in London, Costa Rica, and several other locations I will do business with in the next 12 months. (The contract for London was signed this week with one of the hotels I met with at the show). This also helps me to maximize the ROI and time for the suppliers too, as I am not meeting with Botswana if I have no potential for them any time soon.
I am invited on hosted buyer trips and Fam trips all the time. I turn down most of them, as I either am too protective of my time or do not have current business for the area (like the one I got today for Reno).
So, as I mentioned, I have gotten some great benefit out of hosted buyer trips. In talking with many suppliers who exhibit at these shows, they also feel that there is great value in them as well (and if there were not, they will not continue to exhibit). As long as the qualifiction process is in depth enough to weed out those looking for a free vacation, I think that a well run hosted buyer show is one of the best uses of my time, which is my most valuable assets. Where else can I meet with hotels and destinations all over the world, in one place, and develop the relationships needed to continue to be a major resource for my clients?
‘@Sue, thanks for adding your speed dating thoughts. At tradeshows, the primary goal from a buyer or seller should be to either qualify or disqualify each other. In many cases, this is just the start of the conversation or one that advances the buying process. I think both parties should be able to assess that in a brief encounter and decide if the conversation can and should continue.
@Joan, hosted buyer programs for the meeting and incentive business are becoming more common place. To me, that means that the shows weren’t delivering enough value (including education) to be worth an investment and planners believe that other resources will allow them to do their job well enough. Government and corporate planners working for organizations with gift policies, are going to have a tough time getting approval. For most shows, being part of the hosted buyer experience is an additional expense to exhibiting.
@Tim, thanks for the great example of how you work these shows and decide on which ones to participate in. I get a bunch of invites still and don’t book rooms any longer. I’m sure you’ve seen travel companions that you know shouldn’t be there. I think the more the hosted buyer model is adopted by planners, the more stress is going to be placed on paid education and the value of meetings/events. With everyone struggling to show the value of face-2-face, why are our industry shows devaluing them by basically paying attendees to come?
Dave, in all your comments, you are assuming that the hosted buyer program is taking away from a tradeshow. I would strongly disagree with that opinion.
When a show organizer is trying to maximize ROI for exhibitors/sponsors, by bridging a connection (again assuming proper qualifications are done), you are the “connector” and the link that brings them together.
Let’s also be honest to ourselves; as budgets have been cut,many very qualified buyers are no longer able to attend a given show due to travel restrictions. You are mistaken to think a show is so great that somehow, somewhere they magically find money to attend when there is a travel. Also, as Tim said above his most valuable commodity is his time and he gets great value from this model based on his availability and actual need.
One other fact; many companies who buy booths at shows and send staff to man the booth who are not engaged in being at the event. They would rather spend the day with their family and are really not engaged. Therefore, when you call the Marcom at that company to see how the event was and you get a negative response, you are stuck. Questions about “did we get good traffic”, “where the buyers qualified” are an immediate flag in the sales process.
By being a “connector” and brokering a set schedule of meetings, you are also able to ensure maximum value to that exhibitor/sponsor and eleminate the unknown of “did he/she see the right people at their booth”? You know they did, you made it happen, you provided true ROI and you are a critical link in their strategy of F2F marketing.
I realize their are some organizers who do not qualify buyers appropriately (this is the core of the problem of why you see these as boondoggles), but I really feel you have a very jaded view on this topic.
Dave, I do not see the hosted buyer programs as “devaluing meetings” at all. For me, it is just the opposite. These shows enhance meetings for me, bolster my relationships with hotels and destinations, and are the introduction to many valuable partners. In addition to the appointments I make (most shows set a minimum of 8-10 appointments a day, most selected by me, some requested by suppliers), I also meet with many great people in the industry from all over the world. But if I were the only one happy with the model, that would not be enough. I talk to many suppliers before, during, and after these shows, and they are delighted with the appointment system, the quality of buyers that are they are guaranteed to meet with, and knowing the traffic level before the shows begin. At EIBTM last year, there were over 3000 suppliers exhibiting. Did I visit with all of them? Not a chance. But I met with the ones I have pending or real potential business with, thereby maximizing my time and theirs. In addition to my appointments, I also learned more about some destinations I was not too aware of before. This year, I am adding a few days in Lisbon (at my own expense), and this is due 100% to learning about the city last year at the show. Based on my research, I feel like this would be a great meeting destination, and will be talking about this to any client looking for a value destination in Europe. I agree with Nancy about travel money. I personally budget a certain amount of money for meetings, trade shows, and industry education a year. This year, I spent a very healthy portion of that on registering for my CMM, a class I will be taking in two weeks. So when I see a show that I really want to go to, I either have to exceed my budget or look for ways to cut my costs to attend. This year I got lucky due to the fact that RCMA and PCMA were both in the DFW area, so I was able to attend a couple more shows than I would have normally. But I had to miss some shows that may well have been exceptional, due to travel costs.
‘@Nancy and Tim, thanks for your continuing to share your views and experiences on the benefits of hosted buyer programs! We’re loving the dialog…especially how it will help those considering this model as organizer, exhibitor or participant.
I think the one thing we can all agree on is the need to deliver key buyers and to be a connector. The question really boils down to whether or not the value of the show will be enough to attract those key buyers or if you need to subsidize and incent them to attend and make meaningful connections.
There’s no one size fits all solution, but it’s good to hear that you’re both seeing benefits to the model through your experiences. Both of you are buying and selling the good time shares. 😉
Interesting post and very interesting comments, all around.
While I do believe something needs to be done to revitalize the way business is done in the meetings industry, the hosted buyer format is not a silver bullet. (Is there ever such a thing?)
The biggest change I think needs to take place with suppliers expecting that just showing up at a tradeshow should guarantee them business. And too many salespeople judge shows by the traffic that stops by their booth only.
The biggest improvement with hosted shows I think will be that the appointment format will force suppliers to put more time into pre-show preparation, something they should have been doing in the first place…
Doreen, great addition! Agree that hosted buyer programs do help force the issue of advance preparation for exhibitors. Advance appointment setting and the ability to search and plan how a buyer will tackle the show floor is growing…especially for younger participants.
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