Many firms are rethinking their business strategies right now in an effort to save money. Even companies whose profits are flat or positive feel the pressure to save and, more importantly, maintain a fiscally responsible game face in the name of shareholders and public image.
In some cases, events are being cut, leaving all types of programs -- even major conferences, with thousands of attendees and years of revenue-generating history -- vulnerable to elimination.
But before your firm follows suit, consider the following points. Sparing an important event from the ax could save critical revenue -- not to mention your job. Planners with negotiation acumen, accounting skills and contract savvy will be the most valuable in this new, economically parched environment.
A so-called liability audit approximates the total liability of your project, should you cancel your event for any reason. Ideally, you have prepared such an audit from day one and have updated it every month or so. You should be able to rattle off rough cancellation damages upon request at any point in time during the life cycle of your event.
Note: While in the past a force majeure clause tilted liability in your favor, it rarely mitigates overall liability these days. That's because the "acts of God" that define force majeure have become stricter. For example, if an airport is wiped out in a hurricane, the venue might argue that guests could have flown into another airport, or traveled via train or car.
A quality liability audit takes into account both actual costs and perceived damages. How much is it really going to cost you to cancel? Could your company suffer irreversible damage if you suddenly go silent in the marketplace?
Generally, events worth saving fall into at least two of the following categories: face-to-face client meetings, planning or strategy meetings, revenue-generating events and training. One also can argue for the morale-boosting value of the sales incentive; a number of firms are taking the conservative strategy of postponing incentive trips or offering cash/merchandise in place of travel at present.
Product launches should be examined on an individual basis; some products and services, such as those tied to job growth, economic stimulus or infrastructure, are critical during a downturn. In other cases, launches can be postponed until the economy improves.
Cancellation isn't the only option firms have for trimming meeting costs. Scaling back on an event can be a viable alternative, as long as it doesn't sacrifice the image or integrity of the conference.
The following changes can save up to half of total event costs.
• Move the event locally and/or closer to the majority of the participants.
• Eliminate food and beverage (have attendees pay for their own), or cut back to bare minimums.
• Shorten the meeting by a day.
• Trim the number of required attendees to the bare minimum.
If you do decide to cancel the event, determine how you will handle damage control. Explain to all involved why you have opted to cancel, express disappointment, end on a positive note and make sure to include contact information. Be prepared to deal with particularly angry attendees, exhibitors, sponsors and/or vendors.
Be sure to pay vendors (especially small businesses) for the work they already have done and cover any expenses they have incurred; it is the ethical thing to do.
Louise M. Felsher, CMP, CMM, is a principal consultant for San Carlos, Calif.-based Ellipses Strategic Marketing.