Transparent Pricing
By tony | 6 Comments
What is the number one change that would benefit conferences and events? I think about this question all of the time. Awhile back, I posed some questions about things I didn’t get about the event industry. Why were industry suppliers so fragmented? Why were things so expensive? Why are so many conferences reinventing the wheel?
Beware the Meetings Industrial Complex
Now, the answer seems obvious. This industry employs too many people working in sales roles.
In 2009, MPI publicized a letter to congress highlighting the value of our industry. The number one value, according to them, was how many people we employ.
It was the least inspiring call to action that I’ve ever read. I don’t build products for this industry because I’m excited about supporting a giant make-work project. I build products for this industry because it is a powerful force for education and catalyst for new ideas. The meetings industry is the most critical piece of our society for pushing change forward.
Here’s my litmus test for whether you’re on the same page as me. All other things being equal, if the event industry could be 1% more profitable or 1% more educational, but employ 1% fewer people, would you consider this a good trade or a bad trade?
Pillars of our community
The meetings industry employs incredibly bright, honest, and helpful sales people. Many of the hardest working leaders in our industry work in sales roles for our suppliers. Our industry is built on the relationships that they help foster. No matter. THEY SHOULD BE REPLACED.
Sales people represent a scarcity of information. If ratings, rankings, honest assessments of features, pricing, and comparisons were available online, event organizers would never talk to sales people. But that information isn’t available online. There’s no Yelp reviews of event suppliers. There’s not even honest information on most supplier’s websites.
There are 190 online registration providers. Some conference is paying for the worst of those 190 registration providers. How did that happen? The registration market should be incredibly simple: EventBrite, RegOnline, ActiveEvents, and CVent in a desperate struggle to make sure they have the best product and services.
Sales people make everything more expensive. They spend most of their time talking to people who aren’t ever going to pay them. This is called the sales pipeline. They approach 100 people, 10 people agree to talk to them, one person agrees to buy. If you’re that one person, you’re paying for all the time that sales person spent on the 99 other people. Plus, it’s their job to jack up the prices through upselling and information hiding.
Why isn’t there more standardization? This one’s a little bit trickier, and I have a feeling I’m going to have to find some way to demonstrate this over time. People in this industry seem to think every event needs excessive customization. Clearly, sales people support this because customization is a really common upsell. But is it bad? I think, at least, that making more information public would move events to standardizing more often on well tested enhancements.
Goodbye dinosaurs, hello mammals
Here’s the thing, the only way sales jobs go away is if they are replaced by something better (or if the event industry fails to adapt, in which case all jobs go away). The way that other industries do this is that they encourage sources of independent, trustworthy information and then work to choose winning suppliers in each category.
Today, if you go to an event for event planners that’s showcasing the best new companies, there’s a very good chance that those companies are there simply because they were willing to pay a fee of several thousand dollars. That’s not independent, trustworthy information.
There’s starting to be easily accessible, trustworthy information online. If you join an #eventprofs twitter chat you can get your information directly from another event organizer. That’s a start, although you’d really prefer to get information from someone who could see the entire industry at once.
Suppliers too, could make a change. Probably the most successful software company in the event space right now is EventBrite. They process a few hundred million dollars in tickets each year with a relatively small staff and all of their information as public as possible. (although they do manage to charge twice as much as RegOnline for no real benefit–something they couldn’t do if comparison information were more available).
Finally, transparent pricing
I started CrowdVine to be the type of company I would want to work for. I also started it to be the type of company I would want to work with. In short, we want to be mammals. How are we doing? Are we all sales and hype?
Thankfully, we’ve always had good word of mouth business. If we do a good job for one conference we get more conferences. That makes it easy to make decisions that are aligned with the interests of our customers.
We have standardized prices and packages. That, combined with word-of-mouth incentives, means we’re pretty good at pushing what’s valuable rather than what we think you can afford. Inside a standard package our incentive is to do anything that does actually translate into a better experience.
We’re pretty transparent about what’s working and not working. For example, see this post on the failure of OpenID adoption and this post on how to get a social network launched successfully.
Until today, we’ve had one glaring hole. We hid our most expensive packages behind a call-for-pricing policy. That means if you wanted to know the price you had to get on the phone with us. I think that policy works against us and gives the impression that we want to get you on the phone in order to work our high-pressure sales magic.
We’re done with that policy. All of our pricing is now available on our packages page. Plus we’ve added answers to our most frequently asked pricing questions. Are there hidden fees? Do we secretly have better deals for people who ask nicely? All of those questions are answered.
Now I want to know, can we go further? What other annoying vestiges of sales processes can we remove?
If all meetings were the same then no one would want to go. Customization allows for a meeting to push forward the innovation we need in the industry. As a result it is difficult to price this out since there are so many variables to consider. Salespeople can make the process quicker, more efficient and easier by understanding what your goals are and helping to meet those goals with our products and services.
There are many examples of online mechanisms to book meetings. Unfortunately meetings are often more complex, there are many variables and in many cases they cannot be standardized or else they would not be stimulating enough. The location is also an important factor. What works for a conference in Pittsburgh will not work for a conference in Las Vegas. An educated sales person can help to navigate this landscape and provide options to make the meeting or event more stimulating and drive more traffic.
It is true that the only reason an attendee should come to a conference is for the education and networking. The reality of the matter is that the attendee is also coming for the experience and the location does matter. Without a trained salesperson you would miss many opportunities to add value for your attendees and create excitement. The conference market is filled with many conference options. This is a very competitive market. Would you choose to go to a conference that offers the same material in Detroit( sorry Detroit) in January or go to San Diego? Certianly the optics are different and there is a closer examination of the location and the content of a meeting but all things equal then most people would choose San Diego ( do not get too big a head San Diego)
The problem with transparency is that even when the prices are clearly listed the client mentality is to negotiate. Everyone wants a deal. When you state a price the feeling is that is where we start and not where we will end up. How do you do this with a computer and not have a salesperson involved?
The most successful conference we work with is exceedingly simple. They have great speakers and great networking, and have very few customizations.
I agree with you, that it’s hard to understand why you would have a conference in Detroit in the winter. But somebody is booking there. I’d love to know why, but right now the reasons are held by just a few salespeople representing hotels there.
We’ve been testing set pricing and pre-defined packages for years. Nobody ever walked away because they couldn’t get a 10% discount. And everyone responds well when we can speak from experience about why we defined our packages the way we did. If we did something different for each customer, then we wouldn’t be able to offer the same depth of knowledge.
Tony, very interesting post! I agree with you on many points, but have different opinions on others.
Reason to meet You’re right on the money with this one. Organizations don’t hold meetings because they are good for the economy. That may get the ears for lobbying, but doesn’t address the bigger picture of business improvement value beyond the hospitality industry.
Less sales people Hotel’s are starting to trim down their salesforce and deploy against customers instead of specific boxes. Smaller meetings are being commoditized because the cost of sales is too high and decisions are being made off of a grid. Hotels are kind of weird because the ownership is fragmented. They have a perishable supply and need to price based on demand to yield the best return.
Transparent Pricing For lower cost alternatives, this makes a lot of sense. Once you start getting into higher ticket items or enterprise solutions, where decisions are made by committee, sales people are needed to help the buying organization compile the business case. When a change in process is needed to drive value, sales people help the buyer envision an improved future. Marketing alone will not make the phone ring for these larger opportunities.
Find your niche The key success factor is for a company to have a deep understanding of who their product is best suited for. Their direct sales efforts need to be very targeted to that niche. Marketing can help support that through the creation of sales tools designed to that niche. If you rely strictly on incoming opportunities, you’ll likely not have a sustained offering.
Dave,
Thanks for chiming in. You’re the type of person with a broad view of the industry that I think could be the first stop for transparent, high-integrity information.
It seems like software can be the first segment of suppliers to reduce their sales force and replace it with actual self-service information. I’ve never had a customer who was unhappy with information that they could get themselves.
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