We are in the middle of an economic and financial storm with uncertain prospects for recovery, and according to most commentators, have yet to see the worst of it. Real GDP in the U.S. is growing at 1.3 percent annually (according to the U.S. Department of Commerce’s Bureau of Economic Statistics’ third estimate for the second quarter of 2011), inflation is running at close to 4 percent (according to the U.S. Department of Labor Statistics in September 2011), companies remain exceedingly cautious with retained capital, and operational budgets remain under close scrutiny, with very few cost centers unaffected since late 2007.
The effects of the recession have included a drop in events, late payments, negative cash flows, layoffs, and businesses with weak balance sheets going into liquidation. Mergers and acquisitions have become commonplace as the market shrinks and consolidates.
Procurement departments have become increasingly involved in tracking and analyzing corporate event spending, as well as driving the use of formal preferred and approved supplier lists. While this has been seen in many ways as a positive, providing the platform event marketers have long sought in order to demonstrate the value they bring to their firms, it has also given rise to the commoditization of event services and can stifle creativity.
The business landscape has shifted, and the new norm is a changing world with little stability.
Going forward, events need to have a real purpose, to be integrated into the wider marketing mix, and to be measured in terms of their effectiveness. Events can no longer stand on their own—we need to sweat the asset more than we’ve ever done and demonstrate both the commercial and intangible value I believe events can deliver. Everyone involved needs to know the business objectives for hosting the event and be accountable for achieving them.
I see two significant changes taking place. First, large corporations will shift to outsourcing some or all of their event management function to minimize the overhead and fixed cost and adopt a more flexible, cost-effective resource. Second, I predict an increasing trend toward globalization. With corporations looking to both ensure a consistent message and manage their global spend more accurately, agencies need to be where their clients are and provide a broader service offering.
In the past 18 months, the price of gold has hit all-time highs as investors seek a safe haven for their funds. Agencies and suppliers need to be seen by their investors—their clients—as a safe haven for their money. Businesses with a gold brand in today’s market need to have financial stability and an excellent reputation, be client-centric and innovative, and add real value to their clients. They must be someone clients can trust.
In troubled times, relationships are paramount. Trust is at the forefront of people’s minds. There’s a great book called How to Sell, by Jo Owen, that defines trust as T= (C+V)/R, meaning trust equals credibility plus values divided by risk.
When I first read this equation, a light came on. It’s so simple. All organizations need to build trust with clients and employees. If you don’t have trust, you don’t have a brand. Events are key occasions for deepening relationships, communicating, reasserting value, and affirming trust, which is why I believe there is great opportunity out there if you’re willing to adapt with the markets.
It is said that the Chinese use two brushstrokes for the word crisis. One stroke stands for danger; the other for opportunity. There is no doubt in my mind that the next couple of years will be tough, but those who acknowledge the danger may just come out better and stronger than ever.
—Richard Waddington, C.E.O., First Protocol, New York, @FirstProtocol