The topic of how event management agencies are appropriately remunerated for the expertise, not to mention the considerable resource they are often required to deliver, is not exactly a new one. But as I glance around the industry, it’s a drum I feel compelled to beat, if not give a good thrashing, while I ask myself the question: who among the reputed 25,000 supplier companies (apparently so) is actually making any money out of pure event management anymore?
As I’m sure fellow business leaders have noticed, there don’t seem to be too many annual accounts knocking about that are showing healthy numbers. On the contrary, plenty look to be poor or even loss making. I was at a gathering of the industry’s great and good recently and the common consensus was that companies are looking to build their business around other services as they are now finding it impossible to make consistent profits out of events.
So, hang on a minute. If our services are genuinely adding value to a client organisation, we are either collectively showing a large amount of commercial ineptitude, or we are failing to convince clients that it is not only perfectly reasonable for event management companies to earn a margin, but that if they do, the client will get a better long terms support service.
What needs to change? My feeling is that the idea of asking every man and his dog to tender for a piece of business is archaic. It is extremely costly for each company tendering and the conversion ratio is dire due to the number of companies involved. The client expects the laborious tender to be submitted for free and there is little real profit left when the final ‘winner’ is declared, as cheapest invariably wins and someone will always cut off their nose to spite their face.
It’s not a new idea, but I’m more than happy to add my voice to those that would like to see clients pay for the pitch. Why not? This seems both fair and sensible to me – it would improve briefs, and information flow and reduce the number of companies involved. This might also make the client look at awarding a series of events, instead of one-offs, which would greatly assist the event companies in controlling their staffing and overheads as well as reducing their pitch costs. The overhead issue is not going to go away. Flexible, skilled event managers are great in concept, but very few can afford to be at the end of a line and only working from project to project. Hiring, firing, re-hiring is a mighty uninspiring beat for any business to be dancing to.
Whilst I’ve sometimes been critical of procurement in the past, the more enlightened of the species do at least understand that businesses need to make a (small) profit to survive. Divide that small profit by the number of man and woman hours worked in this industry and the number can be shockingly small. Let no one doubt that people in this business work extraordinarily hard for their pennies.
Could this be the time for procurement to reinvent themselves as the event management industry’s hero by stepping in and stopping the madness? It was only a few weeks ago that the anniversary games returned to the Olympic stadium, where arguably the greatest event staged in the UK, took place just 12 months ago. The occasion was marked by a wave of claim and counter claim over what the true legacy of this spectacular show has been. Wouldn’t it be great if this legacy included a new enlightened approach from clients towards event management as a great art that thrives best when approached in the spirit of partnership and fair reward?
Procurement teams everywhere, here comes the baton. Please don’t drop it.
Any comments? Email sarah@mashmedia.net
