July 25, 2012 by Jeff Hurt
Many of us often forget that annual meetings and conferences are actually a business.
When we are a member of an organization, we expect the organization to provide an annual meeting at the lowest cost possible so we can attend.
But are those member expectations justified? It really depends upon the business model of the event.
A business model describes the rationale for how an organization creates, captures and delivers value.
It emphasizes a system-level, holistic approach to explaining how organizations do business. They seek to explain how value is captured and created.
The simplest way to define a business model is to answer, “How do you plan to make money?”
We often forget the making money part of the business model–especially for conferences. We forget that someone, somewhere is paying for the conference expenses. There may have been a registration fee that covers some of the expenses. However, in the case of the hosted buyer experience, the burden of the conference expenses fall on the host, its sponsors and exhibitors.
There are a host of other questions that follow the money making question. They include:
Most conferences and annual meetings fall into one of the following three business model categories.
Let’s face it. The majority of conferences exist to make revenue for the organization. In the nonprofit trade association world, some conferences’ profit make up to 40%-60% of the organization’s annual budget. Without the revenue from the annual meeting, programs, services and staff would be cut and in some cases even disappear.
Most revenue generating conferences make a profit from registration fees, exhibitor booth sales and sponsorships. Conferences that don’t have a tradeshow component may depend upon high registration fees and sponsorships.
Break-even conferences make enough revenue to cover the conference expenses. The goal is not to make additional profit, just cover the costs of the event.
These conferences are completely underwritten by the host organization. Sometimes, the organizers even cover the attendees’ airfare, lodging, ground transportation and expenses.
These conferences may be exclusive, invitation-only events for loyal and high-end customers. Often the organization wants to show appreciation for the customer’s support and loyalty.
Sometimes the conference is used to roll-out a new product or service. It may even be used as a content-marketing strategy with magnetic content to position the organization as a cutting-edge thought leader and attract new customers.
Or the conference is used to invest in customers and help them progress in the industry. It may be educational as the organization wants to get as many people instructed as possible to make positive change.
What would happen if conference organizers had to publicize the business model used for their annual meetings and conferences? How can conference organizers balance the expenses and revenue from all of its stakeholders more evenly?
Filed Under: Business Model
This is incredibly relevant to the Academic conferencing market. I think the key to balancing is using ‘GTD’ as is it such a daunting task. Good planning is very important, but you need to be able to track the progress (Especially with regards to payments) easily as you go. Thank you so much for posting,
Thanks Tracy for reading and sharing your views. Appreciate it.
Academic conferences are rarely for profit. But if they really want to make money, they can easily do so through sponsorships, and peer reviewing and publishing papers presented by researchers attending the conference.
I find it interesting when groups try to pretend that they are NOT about revenue generation, when their event is all about making money. It impacts all they do (speaker selection, food choices, level of quality of decor, nametags, etc…).
It is not a bad thing to host the event to make money, but when they pretend they are all about delivering an experience to the attendees…. they will come up short (on both).
Yes, I think we forget that conferences and events are a business and take money to organize and implement. Like you, I know when I’m getting spin from the conference hosts and they are trying to sell me an inferior product versus when their intentions are for my good as an attendee.
Thanks for reading and commenting!
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