Is Your Conference Ready to Become an Industry Giant?

It’s common for conference organizers to have an events portfolio that looks similar to the solar system, where one flagship ‘Large Scale Event (LSE)’ acts as the Sun, providing financial security to the other satellite events, which revolve around its success.

At some point though, most ambitious organizers will want to create fresh new solar systems for their most promising satellite events, creating a new flagship ‘star’ event from which yet more smaller conferences can spring and flourish.

Typically it’s these LSEs that create the majority of an organizers’ market value, too.

However, achieving this is obviously not easy.  A number of questions have to be answered first:

  • Is the timing right?
  • Is the market ready?
  • Are you in a strong enough position?
  • Are you confident enough to make the necessary investments?

These are a few of the questions we want to help you answer below, with the help of some prominent conference industry leaders.

What is a Large Scale Event ?

The first thing to do is get a clearer picture of what we mean by a ‘Large Scale Event (LSE)’. While definitions are always contentious, for the purposes of this post, we’ll say an LSE typically has:

  • Revenues of $1 million and up (typically much higher)
  • A relatively balanced revenue stream between delegates and sponsorship/exhibition sales
  • A substantial exhibition element to it
  • Upwards of 1000 attendees (both paid and speakers/exhibitors, etc.)
  • Significant investments in branding and the onsite experience

Katie Moore, Group Events Director at CE Media (who launched the Elite Business Event), says it best. “Being an LSE organizer means you have a very different revenue model and business model compared to most other businesses and you have to be prepared to market the business three ways: to the sponsors, exhibitors and the delegates (whether free or paid for tickets).”

Is the Timing Right?

Is_the_timing_right

Perhaps one of the most important elements of successfully moving from a ‘niche’ event to an LSE is timing.

Push too soon and you risk alienating your original supporters, looking overly aggressive, losing your investment and harming your existing brand and market position – while showing your hand to the competition.

Push too late and you could miss the boat entirely, see a larger competitor move into your territory (and eat your lunch), and forever be seen as secondary event in the industry.

So, how do you assess if the timing is right for you?

There are several internal factors you can turn to in order to assess if you’re ready for ramping up the growth curve into an LSE.

The first and most obvious is sales growth.  Is it healthy, is it growing strongly?

But of course you have dig a little deeper than that.  What you really want to look for is a positive coefficient, where your sales are trending upwards and outpacing the amount of effort you’re putting in to achieve them.

It’s all very well to see sales increase from $250k to $500k year over year, but if your sales and marketing costs went from $100k to $200k in order to achieve this (commissions, additional staff, paid marketing campaigns etc.) then your costs are increasing at the same rate as your revenues, and this indicates a worrying lack of organic growth.

If it takes that kind of effort to grow your top line, then you’ll be looking at a very tough, very expensive road to building a big, Large Scale Event.

 What you should be seeing is that for every dollar you invest in sales and marketing, you’re getting an increasing return, so you should be able to achieve that 50% increase of #250k in revenues on a 25% increase in investment from $100k to $125k.  If these are the kinds of results you’re seeing, then that suggests you’re at an inflection point, and that’s a great time to accelerate growth towards becoming an LSE.

Another leading indicator would be the number of inbound enquiries your getting.  These should be increasing as the market expands and your position in it drives organic leads to your doorstep, which would generally mean that you’re seeing results like the second set of figures, rather than the first.

Moving away from sales and marketing, you also have to consider the team.

How experienced are they?  Are they motivated to make this happen? Do they have the right breadth and depth of relationships in the industry to push things forward?  Is the team large enough for them to focus their energy on growing this event, without impacting the rest of the portfolio?

As Katie Moore says, “ Although I’ve organised many LSEs it’s always a challenge to launch a new LSE such as Elite Business Event. The best piece of advice I can give you is to get a great team around you!”

Once you’ve got some answers to these questions, you’ll have a pretty good idea whether the timing is right, internally, for you to push for growth towards an LSE.

However just because you feel ready internally, that doesn’t mean it’s the right decision – the next question you have to ask is whether the market is able to support an LSE?

Is The Market Ready?

Is_the_market_ready

First things first, you’ll want to check the obvious numbers for the industry that you intend to build your LSE for.  These are things like:

  • How big is the overall market?
  • How fast is it growing?
  • Do other economic trends suggest it will continue the upward trajectory?

Most of these should be a Google away, with top-line numbers like this getting released by companies such as Gartner or Juniper on a regular basis.

The next consideration is what the ecosystem of the market is like, considering both the buy- and the sell-side.  Is it a monopoly or oligopoly; or is it highly fragmented?  Generally speaking you’ll want both sides of the market to be a triangle, with a handful of large companies at the top, a middle tier of fast-growing challengers (ideally in the dozens) and a much larger base of startups, consultants and secondary suppliers (in the hundreds).

If power is too consolidated at the top, like it is in a monopoly or oligopoly, you probably won’t have the leverage to run an independent event, and they may form an alliance or association together, which leaves your event vulnerable.  Too fragmented and you can’t build out a core of lead sponsors and anchor exhibitors that provide a reasonably consistent revenue source year to year.

Finally, you need look at the motivations of your industry when attending the event.  The key thing to look out for: are they shifting from education and learning, to evaluation and buying?

If the industry is still relatively immature, there may not be enough actual sales to sustain an LSE.  If you feel the market is now at a tipping point, and you have the internal metrics to suggest putting your foot on the accelerator is right, there are still two more things to consider before pulling the trigger.

Are You In a Strong Enough Position?

Strong_enough_position

Even if the market is ripe and your internal numbers look good, you have to take a look at your competitors too.  Marketplace economics strongly suggest that only one company will emerge as a leader for any particular market (think eBay for auctions, Amazon for online retail, Google for search, AirBnB for room rentals, etc.)

Before taking the plunge, you have to seriously consider if you’re likely to emerge in the number one spot (or at the very least number two).  If you don’t end up in one of those positions, the investment made might not be recouped.

To assess this, think about how fast your event has grown, but are others growing faster?  Do they have deeper pockets?  Or are they better positioned with key industry influencers?

Unless you’re confident of having the momentum, financial muscle and political clout to win a marketplace battle, you might find the fierce competition leaves you battered and bruised, but no better off than when you started.

If you feel you can’t out-and-out win, there are other options to establish a leadership position and continue strong growth, including geographic domination, or splintering the market into disctint verticals where you can truly own the space.

 Are You Confident Enough to Make the Necessary Investments?

necessary_investments

Finally we come to the big question:  Should you invest in a growth strategy to create an LSE?

This means bringing together all the above questions – internal growth metrics, industry growth and ecosystem, competition – then look at what investment you feel will be needed, and finally calculate the potential upside.

To make a smart decision, it’s important to not only have reasonably conclusive ‘YES!’ to the internal, external and competitive questions; you also have to be realistic with your numbers.

Successfully growing a dominant LSE cannot be done on a shoestring budget.  You need to start taking an exhibition organizer’s mindset–caring a lot more about branding, mass awareness campaigns, features and the onsite experience for attendees.

It is a completely different mindset to the operational and logistical planning that goes into a smaller, niche conference.  And getting them wrong can send out all the wrong signals, so you need to be ready to invest properly.

Secondly, you need to be realistic about the returns in years one and two, if you’re putting in the right levels of investment.  You might find that your actual profit margins are not as high as expected – particularly if you’re battling it out with competitors, in which case your sales and marketing costs will soar. However, if you can see it through and play the long-game, you should find the upside of dominating a large and fast-growing market is worth every penny.

Conclusion

Turning a conference into an LSE is no easy feat, and very few successfully make the leap.  However, if you plan carefully, time it right, and are prepared to invest in making it happen, then the rewards can be long-term market dominance and a big increase in market value for your company.

Do you have any tips or experiences of growing events to become market dominant LSEs?  We’d love to hear from you in the comments!