What should be understood by event management and event marketing?
ShumovichThere are several definitions of event management. One of the shortest and most successful is this: an event is something that differs from ordinary life. This definition is due to Robert F. Janie, one of the managers of the Walt Disney amusement park. Of course, every person looks at the world through the prism of their profession, and it seems to me that the event is almost everything that happens around us. The theater is an event, going to a restaurant is also an event. Our meeting with you is an event.
I deal with business events - conferences, meetings, negotiations. There is another area of event management – organizing games and shows. This is a separate segment, and ideally it should be handled by specialized companies.
When it comes to event marketing, it is important to separate the two approaches. For some, event marketing is selling events. Let's say I do events that cost money to participate in. Therefore, for us, event marketing is the sale of events themselves. For participating companies, event marketing means selling something through events, i.e. a special marketing and sales tool. This may include promotions, BTL promotions, dealer conferences, etc.
What kind of events are there?
ShumovichSports, cultural, mass, business, charity. They differ in outcomes for participants. The organizers pursue their goals (for example, selling services), and the participants pursue theirs (for example, they want to have a good time, meet new people, meet friends). It is important that the expectations of each group of participants are met.
Recently, we often hear that the role of events in the marketing policies of companies is increasing. Why is this happening?
ShumovichIt seems to me that the instruments of direct influence are generally gradually losing their former positions. Consumers are becoming more sophisticated and cynical, and competition is becoming fiercer. Therefore, in order to reach consumers, it is necessary to use increasingly sophisticated methods, in particular, indirect advertising. First of all, the events.
Events are always an opportunity for a personal meeting. If you are dating a person, you have much more opportunity to influence him. But the main thing for the organizers is not to miss their strategic goal. And often people concentrate on technical and entertainment aspects.
Are there products that cannot be promoted through events?
ShumovichCertainly. You shouldn’t promote cheap products in this way, since an event is an expensive channel. In any well-organized event, the cost of one contact with a consumer is quite high. It makes sense to hold an event to promote cheap products, for example, when you want to attract dealers.
What marketing tools should events be combined with?
Sh.Events can be a separate marketing tool - and for some companies it is almost the only promotional tool - and can be supported by an advertising campaign. Let's say pharmaceutical companies like to hold events for doctors, this is their official strategy. They gather doctors, teach them how to use the new drug, and talk about its features. All this is done in a pleasant atmosphere: everyone is taken somewhere. And doctors feel grateful, and, other things being equal, will prefer the right drug.
Many IT companies behave the same way. They tell CIOs about the merits of their solutions not through brochures or advertising, but through events.
VoroninIt makes sense to promote almost all services and the premium segment through events. For example, the Zepter company promotes its cookware only through events: they organize presentations and demonstration meetings with chefs.
The company decided to hold an event. Where should you start?
ShumovichFirst, she needs to determine the goals she plans to achieve and establish ways to evaluate the effectiveness of the event. A goal is a strategic direction, a measurable achievement. Next, you determine the resources you can spend to achieve your goals. See what you can do yourself and what you need to entrust to specialists. It’s a good idea to brainstorm: how to achieve the desired goals, what options exist. You can borrow someone else's idea from another industry or country: the main thing is that it works in your situation.
If you decide to hire an event agency, it is better to start working with them from the very beginning, by setting the goals of the event. This way the results will be higher and you will get a professional look from the outside. Sometimes companies initially set the wrong goals, and a competent event professional will immediately point out the mistakes.
The ideal case is when a client contacts an event agency, talks about his goals, the budget of the planned event and how he sees the event itself. After this, experts give recommendations that are best heeded.
Let me give you one illustrative example. We were doing a conference for an IT company. We planned to have some entertainment in the evening. They told us: we want to organize a good banquet and think through a program. We ask: why do you need a banquet? They answer: so that people can communicate. We propose: no numbers are needed, we will introduce restrictions on alcohol, and we will put light jazz in the background. The company refused and insisted that singers should be invited, even if it would be more expensive. We began to argue, but our arguments were not listened to. They called the group, the event was noisy, there was no communication. When it was all over, the company admitted it was wrong. But in the end, we spent twice as much money and did not achieve our goals.
When an event agency comes to a company, it probably begins work by studying the client. What are event planners most interested in?
ShumovichPersonally, what interests me most is the company’s previous experience in organizing events. This way you can understand whether mistakes were made and how you need to work further: from scratch, or based on previous achievements. If the company does not have any background, you should find out why it suddenly decided to organize the event. Often events are organized because competitors are doing the same. In this case, to come up with something original, you need to study the experience of competitors.
INIn the holiday segment, the problem is different. If conferences are taken seriously, holidays are initially perceived as drinking. More precisely, a motivational binge. End of the year? Great, let's have a good rest and have a good drink! Therefore, today there is no equality between the customer and the agency organizing the holiday. The market is at a stage where we cannot come to a client and say that he is doing something wrong.
This is how work in our segment is usually structured. We meet with a potential customer, and he says: “Offer us a concept.” I can come up with ten to fifteen holiday concepts for you right now: Pepsi-Cola Day, Red Napkin Day, Red Sofa Day... Sometimes it gets to the point of absurdity. Recently, one company suggested organizing a military-style party. To this they tell me: “Our director is a former military man, so don’t touch military topics.” In another company we offer the same thing, to which they answer us: “You know, our director never served in the army, so we can do without the military.” All ratings are at the level of like or dislike. But it is important to treat organizing holidays as a business, when you can say: if we do this, we will get this result, and if we do this, we will get this.
How important is it to take into account the specialization of an event agency? Is it always important to contact an agency specializing in conferences to organize a conference?
ShumovichWe still have to do little extra, festive parts. If the holiday part gets bigger, we prefer to use a holiday agency. We advise our customers to do the same.
For example, one of the main areas of our company’s work is preparing conferences for the IT industry. But we recently lost a tender due to the fact that we did not have experience working with database specialists. Imagine, there is an IT area, and within it there are a lot of directions. And there is a company that specializes in preparing events just for database specialists. For me personally this is a good sign.
When a company turns to an event agency, it should treat it as a super manager with super powers. Consider the agency as a staff unit, listen to its opinion. Don’t just hire “hands” who will simply implement your plans. Hire "heads"! Representatives of the event agency should be invited to meetings where the goals and objectives of the events are formulated.
And if the tasks are set at the Board of Directors, should companies invite you to its meetings?
INThat's not the point. We want to be called not when the company has decided everything for itself! The format of the event should be discussed jointly, and the event agency should be invited only when a certain problem has arisen in the company: low sales, disloyal clients or employees.
Are there any problems that can only be solved with the help of events?
INYes, for example, for the HR department, events, and especially holidays, are the only tool for emotional impact on employees. Other tools, such as salary and motivation, are functional.
And here it is extremely difficult to work with clients. A standard call to our office looks like this: “Hello, we have 300 employees, we deal with computers, suggest two holiday concepts.” Okay, let's make an offer. We have a lot of standard developments. But they need to be seriously adapted every time!
They made an offer, so what next?
INAnd then we write the script and other problems begin. The person who has the power to make decisions begins to change our scenario at the very last moment.
Do you often have to come up with something completely new?
ShumovichNo, we always rely on previous experience. And he is always there. Not in the company, but in the industry, not on the Russian market, but abroad. Why reinvent the wheel? Knowing about this experience, we decide what to do to raise the bar higher and make the event better. Much better than the previous one.
INIt's the same on holidays. Naturally, we try to convince the client that his party is completely exclusive, but when organizing it we rely on existing experience.
Does this mean that every company should have an event strategy? Or is each event relatively independent, pursuing its own goals, and therefore continuity and sequence of events is not the main thing?
INWhat do we see in the holiday industry? Usually the company celebrates an anniversary, New Year, goes somewhere in the summer... There are three or four holidays a year in any organization. And how are they usually organized? Today we made a Star Factory, tomorrow we have a gangster party. In the summer there is a barbecue, and on New Year’s there is a Latin American party. They did it, they did it. Some liked it, some didn't. Why? People are like this: some always like everything, some always dislike everything, some were scared by a black man in childhood, so he doesn’t like anything Latin American. How is the holiday assessed? Only on an emotional level. If I got drunk and had a headache in the morning, everything is bad. To avoid this, we have developed four approaches to organizing events.
The first approach is resource-based. This is when we take the clowns, the magicians, the venue, the food, the booze and put it all together. The role of the agency here is purely organizational: to come to an agreement with everyone, to invite everyone. An experienced company does this over the phone in 30 minutes. But there is a big problem. If we come to a large company and tell them that we have magicians, fakirs and drinks, they will ask us: “guys, what about the concept?”
So we conceptualize all of this and call it gangsters. We get gangster magicians, gangster fakirs and a gangster presenter. We come up with a conceptual name. Although in fact this is the second – director’s – approach. Its difference from the first approach is that everything is united by a certain common idea, as in the theater. 95% of companies involved in organizing holidays are at this level: they take a resource and put it into some kind of concept.
But people’s emotions don’t work here, and our task is to involve them in what is happening. For this we use the third approach - story-event. Its meaning is that you need to come up with an interesting story, following certain rules. There must be a conflict in the story, it must be true or at least plausible, and it must touch the heart. That's not all, because the story needs to be conveyed to the audience, so it is important to choose the right communication channels. You can use anything to reach the right people. If everyone is properly prepared, then the person coming to the event already understands what will happen. In a standard situation, he was told a story, the outcome of which would take place directly during the holiday. At the end of the event, it is important to hold a supporting event, such as a photo exhibition, that will remind participants of what happened.
The fourth approach is strategic. It is at this level that a real understanding arises that a holiday is not a drinking session, but a strategic tool. At this level, the agency is faced with the task of not just coming up with something, but offering a story that will convey the company’s values to the participants. The result will be a set of events, each of which will have its own history and participants. In the end we get a client club and an employee club.
Look, can you imagine an advertising campaign where one video says “we are the most creative”, another says “we are the most positive”, and the third says “we are the bravest”? During the holidays this is real, the main thing is to build the right strategy.
It’s interesting that events work on this principle not only in business. Take figure skating. There is a skating rink, skates and figure skaters. They skated for three minutes and that’s it – a resource approach. If we take everything the same, but add a well-thought-out program - a director's approach. Story-event - the same elements, but it’s not just anyone, but Evgeni Plushenko, where one name shapes the story. For example, this: he devoted his whole life to sports, but before the last Olympics he broke his leg; the doctors gave him up, but Plushenko did not give up, he overcame himself. Everything will happen on May 10th! Guys, let's support Zhenya! And thanks to a good story, figure skating is watched by people who are not interested in this sport in itself.
But organizing such events is very difficult. How to form a budget, what to include in it and how to calculate expenses?
ShThere are different approaches here. First: we have so much money, what can we get out of it? Second: we need this and that, how much will it cost? There are no other options that are fundamentally different from this.
Perhaps there is often not enough money?..
ShWhy? It happens that the Client overestimates the budget and we point this out to him.
How to control expenses?
ShIn this regard, we are all far from ideal, and we all step on the same rake. For example, the client said that he had a certain budget and wanted to see what could come of it. Typically, the agency shows an estimate for the event and explains how the money is spent. If the budget is exceeded, the organizers need to prove that this is necessary.
Second option. The agency is given a goal and writes a budget. If a certain “critical point” (in the client’s mind) is exceeded, the need to increase costs is extremely difficult to justify. Don't forget that with a well-organized event, increasing the budget by 10% can increase its effectiveness by 100%. It's like the difference between a car that costs 20 thousand dollars and a car that costs 50 thousand dollars. Agree, she is great. But if you take cars for 200 thousand and for 220 thousand, the differences are much smaller, the difference is in the attention to some details.
Cost control directly depends on the system by which the event agency receives its fees. There are two approaches here: external and internal fees.
In the first case, you name a fixed amount of your remuneration for organizing the event, based on the value of the services provided. This approach encourages transparency about other expenses, but does not provide much incentive to save.
In the second, there is a budget for the event, in which the agency’s profit is already included and distributed among various expense items. This approach encourages agencies to save money, but can affect quality, since the agency will try to spend as little money as possible on the event itself, because as expenses increase, its profit decreases.
When we discuss pricing with colleagues, many say that the fee is usually 10-20% of the budget. 15% is the default price. At the same time, funny things happen. For example, the program includes a singer’s performance that costs a thousand dollars. Accordingly, the agency's fee is $150. If the organizers invite another singer, say, for 10 thousand dollars, then in this case the agency receives one and a half thousand. Why? There wasn’t 10 times more work! In my opinion, it is strange to calculate fees as a percentage of the budget.
And what solution do you propose?
ShIt seems to me that the fee should depend on the amount of work that the agency carries out. We had situations where the fee was 5% of the budget, and 40%. In the latter case, we did a lot of our own work (and it can't be cheap) and managed to keep costs at an acceptable level. If the agency receives a percentage of the budget, it is not particularly interested in saving the client’s money. Quite the contrary.
INThe problem is not only this, but the general immaturity of the market. People are not willing to pay for creativity. For example, they want to receive a company’s concept for free. This is wrong. Good work always costs money, especially since during the holidays each plot is invented by two people, and for one event at the initial stage it is necessary to propose at least two scenarios. In addition, companies do not allow us inside. The maximum we can count on is that we will be allowed onto the organization's Intranet. In this state of the market, we do not have the opportunity to set our own conditions. If we go to a company that is going to spend 100 thousand dollars on a holiday and say that we want to earn 30 thousand, they will immediately say goodbye to us. So it’s too early to talk about reasonable pricing when organizing holidays.
We are talking about client mistakes, but often the agencies themselves do poor quality work. Are there any ways to identify event industry professionals?
Sh Try to understand from the very beginning whether the agency is selling price or value. If there is value, then it strives for the client to get the best result. If the agency sells the price, it tries first of all to reduce costs and be cheaper than competitors. Look at what the event company is selling: the same service as the others, but for less money, or a better service for the same money. If an agency doesn't want to cut the budget by offering additional services, such as a post-event report, that's a sign of their professionalism. Such an agency sells value.
INApparently, organizing conferences and seminars is a more mature and established market. I can't say that this approach works in the holiday industry. We analyze the factors that actually increase customer satisfaction, and the factors that have no significance in this sense. For example, if to decorate the scenery we take material for 100 rubles, and not for 60, no one will notice this, and we will waste part of the profit. If you take a suit for 100 dollars, and not for 30, everyone will notice it. The holidays are all about the picture, not the story or concept. Unfortunately, this is true.
How is the quality of an agency’s work usually assessed?
ShUnfortunately, events of different quality are called the same – events. And clients measure according to the lower bar, believing that this is normal. Everyone is accustomed to the fact that poor organization of events is a business specificity. Nothing like that! If planes crashed every day, this would not be considered the norm.
INThere is no loyalty to companies that organize events; clients are initially biased towards them. If we organized everything well today, then next time they will still announce a tender. We ask: why? They answer: we want something new.
Sh. This is not always the case in seminars and conferences. In the business segment of events, the level of loyalty to event agencies is high. It's a matter of experience, contacts and reputation among the right audience. Companies that are satisfied with our work continue to cooperate with us, and leave only if they are no longer satisfied with something. For example, I have a Client with whom I have been working for 6 years. This is sincere and mutual love.
What problems do the agencies themselves have to solve when organizing events?
ShThe most serious problems arise when event organizers do not follow their own script and begin to improvise. On the other hand, agencies must initially be prepared for the unexpected and spell them out down to the smallest detail. If this happens, you need to do this, if this, then this. This is technology.
INWe are making a risk map. Of course, you cannot insure against all unexpected events, otherwise the event would be very expensive, but the main risks should be insured. Let's say that an ambulance should be present at any event.
Who in the customer company should be responsible for holding events and their effectiveness?
ShIt is best to have an event manager in the company. It is clear that this only makes sense if there are a lot of events. If the position of an event manager is not provided, the person who is responsible for the event itself should be responsible for the events. For example, if the event is for company personnel, then the HR director, if for dealers or clients, then the marketing director, and so on.
Sometimes a company has certain specifics, and an event agency is simply not able to take into account all aspects of its activities. Therefore, there are situations when it is necessary to involve an employee of the customer company to organize an event. And an experienced agency should say this.
How can you measure the effectiveness of an event?
ShThe measurement scale must be created during the preparation of the event. The quality of the event can be measured by how well the event achieved its goals, financial performance, and participant satisfaction.
INFrom my point of view, the impact of holding holidays is generally impossible to estimate. How will you measure the effect of holding a corporate New Year? In addition, it often takes two to three months before the effects of the holiday begin to be felt.
Another problem is that I can’t imagine how to clear the assessment of side factors and not attribute something to the holiday that is not in it.
Do you think the event industry can be called mature?
ShIn a mature industry, standards, market players should emerge, professional education, literature and associations should appear. Events look weak in this regard. For example, the fact that so far I had to read about events was either in English, or bad, or bad and in English. A professional association with a code of conduct, quality standards, and a platform for communication has not yet been created...
But every year it is noticeably felt that clients are becoming more sophisticated, more experienced, and more demanding. We increasingly speak the same language. This means that the organizers become more professional, and the industry becomes more significant and respected. Event organization is one of the three most popular marketing tools. Events have a great future.
Interview to "Commercial Director" magazine
