All associations, businesses and professions must continually adapt in order to survive.
Organizations, products and services go through a four stage life cycle: startup, growth, maturity and decline. Unless the organization reinvents itself, it declines and ceases to exist.
The business life cycle also applies to conferences, meetings and events. Where do you think your conference is in this life cycle?
The Product Life Cycle History
Theodore Levitt originally developed the idea of a product life cycle in the 1965 Harvard Business Review article “Exploit The Product Life Cycle.” Maintaining growth or maturity is extremely important for an organization to have a sustainable revenue stream. Once an organization’s products or services arrive at maturity, it has to resist becoming comfortable and overconfident. To avoid potential decline, it must continually adapt and reinvent its products and services.
Organizations that regularly reinvent themselves are healthier than those that don’t. Their business life cycle looks like this:
If the organization does not consider a new path for its products and services, it can waste away and die.
The Conference Life Cycle History
Many associations started their annual meetings as a way for the members to meet face-to-face, to comply with association bylaws and to elect new board members. During the startup and growth periods of those conferences, association leadership realized that their annual meeting provided an additional revenue stream. Leadership found new ways to grow the conference and added education offerings, tradeshows and special fundraising parties. Revenues increased and the association grew. Associations then became dependent upon the conference revenues to maintain its annual budget.
The Mature Conference Market
At first many of these conferences grew rapidly and without much effort. Now ten, 15, 20 years later, many associations are facing maturing conferences. Some are even declining.
At the maturity level, sales growth and volume reach its peak. This is the stage where an organization makes its most money from a conference. The association’s primary objective becomes defending market share and cutting costs as it faces increased conference competition. Associations that take defensive action have a greater potential of not realizing extended product life cycle maturity.
At the maturity stage, association leadership must make some tough decisions to alter their current conference strategies and avoid decline.
Some considerations for the mature conference market are:
- Conference Differentiation – Attendees are looking for unique experiences not found at other events.
- Increased Incentives – Some offer increased incentives such as hosted buyer programs, discounts and special offers to encourage attendance over other competitors.
- Price Wars – because of increased competition, some offer reduced prices.
Conferences On Decline
Many conferences were started to help industry professionals advance and improve. If the conference does not continually challenge its attendees to evolve, it becomes mundane. Emergent industry professionals can quickly become commonplace and the norm. If the conference does not offer forward-looking information and education, it can start to decline.
Conferences enter decline when sales and profits start to fall. Conference registrations decline for three reasons:
- Market Saturation
- Conference offerings have become obsolete
- Attendees’ tastes have changed
If a conference is in the decline stage, leaders may hold-on and offer new features or consider expanding to new markets. They may also consider selling the conference to a competitor. Ultimately, some drastic measures need to be taken to avoid the conference from becoming obsolete.
Which stage is your current conference or event in? What trends and practices are picking up acceptance that can be offered in your conference to push it to new growth?
Michael Thimmesch says
Great post, Jeff. I hope this isn’t too obvious a comment, but what really changed the game for associations having to look at their conferences as a product was the influx of for-profit media companies jumping in their sandbox.
Media companies had a similar abundance of content and industry contacts, and realized they could make a pretty penny starting their own shows. Nothing like competition to improve what the customer gets!
Jeff Hurt says
Thanks for reading and adding your insight. You’re right that an influx of for-profit media companies offering education, often for free, is a game changer for associations. As is the media companies that have entered the conference and tradeshow areana. It will be interesting to watch as the competition increases.