July/August 2006 New Association Show Models Three executives reorganized their association shows and increased their revenues. Here's how they did it.
By Patricia Sherman
Associations depend on their conventions and trade shows for much, if not most, of their annual revenue. No matter how lofty the mission of the organization, association shows must often compete with for-profit shows. And to do that successfully, association shows must operate on the same sound business principles as their for-profit competition.
EXPO recently talked to three executives — Nancy Berg, former Executive Director of the Society of Manufacturing Engineers, who is now an independent consultant; Karen Howe, Executive Director, Conventions and Meetings, National Safety Council; and Gregg Balko, Executive Director of the Society for the Advancement of Material and Process Engineering — who have operated some of the largest and most competitive association shows. Each has more than 20 years’ experience in trade show management and, before moving into top positions, they were hands-on show managers. All three reorganized their show structures and increased revenues. Here’s how they did it.
EXPO: In terms of business practices, how are associations shows different from other shows? Berg: Two differences come to mind: First, associations are purpose-driven vs. profit-driven. They’re obligated to create programs and to incur costs that a commercially motivated company might not. The obligation that comes with the nonprofit tax status is to invest in the organization’s mission. But “not-for-profit” should refer to the mission of the organization; it shouldn’t be the financial plan. Second, the association relies in part on a volunteer workforce, which impacts timing and available talent. This may require training efforts and other expenses that commercial organizations don’t have. Howe: In the for-profit show arena, a business proposal is judged by market research and market size. In the not-for-profit arena, the mission is the driving force. Many of our members are first responders, safety engineers, utility and construction workers, etc., who put their lives on the line on a daily basis. Because of the seriousness of safety, our event reaches every aspect of industry, homes and communities. There are divisions, sections and chapters that need to be consulted as we consider change. Balko: The members generally bring diversity and passion to the board, but they often don’t have the complementary skill sets that you would find in a business. Some boards aren’t skilled at business forecasting. The association executive has to give them the information to make solid decisions, although they don’t always listen. In a for-profit business, everybody comes together at the same bottom line.
EXPO: What do you know now as an association executive that you wish you had known when you were a show manager? Howe: I wish I had known how challenging it would be to implement change within the organization. Not only as a department but also as it relates to interacting with other departments, our divisions and sections, our council-owned chapters and our independent chapters. Berg: I wish I had known that when harnessed, the power of the whole association is very formidable. Our American spirit and culture, even how we structure companies, drives us to an independent, or silo, way of thinking and working. My experience suggests that if you reach out to the entire association, including the membership and the people who produce goodwill programs, you’ll find the tools to help build the emotional support of the association for your show. Linking your show closely to the mission of the association yields great results. Show people tend to know a great deal about their exhibitors, but they must know more about their exhibitors’ customers in order to build value. Balko: I wish I had appreciated the big picture and not focused so much on specific assets. Now, I would be out talking to meeting and conference planners, exhibitors, members and attendees. I’d chat with them about where they’re taking their businesses. I’d be asking questions and looking for trends.
EXPO: What particular business challenges did you face managing the association and its shows? Berg: Associations tend to zigzag as their committees and elected leadership change. This often impacts the direction of the organization and of the show, resulting in modifications of the strategy that may not be market-driven. This is dangerous. In fact, even minor strategic modifications that are not driven by the market can cost an organization time and money, not to mention stature and relevance. Associations must maintain focus on growth and on their industry as a whole. The association exec must be diligent in keeping the organization on point. Howe: I managed the Annual Congress and Expo, the second largest revenue generator. There wasn’t a comprehensive marketing and sales plan. Because of the lack of focus in these two areas, the event had been declining for five years. The business challenge I had was to stop the decline of a mature property. Through research, we were able to determine new market segments to target for growth.
EXPO: What challenges do association show managers have? Berg: Managers of association shows must think about how to use volunteers for the success of the show, but avoid letting members do the manager’s job — which can easily happen with strong and vocal committees. Managers also need to focus on building relationships not just with their exhibitors, but with their exhibitors’ customers, as well. Howe: The challenge for me was a mature property, an aging work force and a disconnect with the exhibitor community. We established an exhibitors’ advisory council, launched a VIP Buyers Program, introduced new market segments and launched a Congress within a Congress. Balko: Some exhibiting companies still assume that the organization must do all the marketing, and they do very little of their own marketing. One of our challenges has been to help them with booth layout and presence on the floor show so they get results from the show.
EXPO: What has changed in your events strategy? Howe: One huge step for our organization is that we’re being more open to input about our shows and asking questions. We had not been listening to our exhibitors. We established an exhibitors’ advisory council. We brought them to the headquarters for a meeting last year. The council is 95 years old, and this was the first time exhibitors had been invited to the headquarters. Berg: You must know more about the exhibitors’ customer; work those relationships through approaches that, early on, may have little to do with the show, but more to do with other association programs that build emotion, heart and buy-in. Once you do this, getting the right people to attend your events becomes a different, and much easier, sell. Balko: We’ve created more value for the exhibitors. For instance, we’ve developed a sponsorship menu that extends the show value beyond the booth. We’ve produced surveys that reveal attendee recall of exhibitors’ messages to help exhibitors better position themselves. We’re developing new attendee markets. For the first time, we’re alternating the show from Southern California to the East Coast. To build attendance, we’ve gotten exhibitors to share lists. The show next year in Baltimore will enable us to draw on key legislative areas. We’ve also determined that the Southeast is underserved, and we’re doing a satellite show with 50 to 100 companies.
EXPO: What changes have you made in operating your shows? Balko: The role of show staff is changing. They’re becoming initiators instead of merely implementors. They’re becoming the business drivers. The association is 60 years old. The typical staff tenure is more than 10 years, so this was a huge change. We had never had a dedicated sales person until last August. Howe: We had four meeting planners and one sales person. We re-allocated responsibilities so that we had two staff in sales and three meeting planners. Now that sales have increased, I’ve been able to add meeting planners. We switched registration providers and set up new accounting practices. We have so many layers in our organization — chapters, industries, regions, networking groups — and we’d been supporting too many shows and events. We’ve been working on a better financial package by bundling shows and educational sessions around common areas. So far, we’ve cut the total from around 90 to 50 a year. We’ve also developed a Hispanic component to our Safety and Health Congress, starting this November in San Diego. It will conduct 32 parallel education sessions in Spanish and will focus on sales to the huge Hispanic market. Berg: SME is moving toward closer integration of its show and conference functions. While this was a gradual transition, today there are event, rather than show or conference, managers responsible for developing content and orchestration of the combined mega event and, of course, profit and loss. SME is also developing relationships with exhibitors and their customers to encourage them to buy into the organization as a whole. For instance, we have worked with The Boeing Co. to acquaint them with the breadth and depth of the organization. We collaborated on work force development programs. This resulted in Boeing sponsorships for SME events.
EXPO: What business changes do you think would most benefit the operation of associations? Howe: Examine how the overall structure functions. Evaluate processes and procedures that have been in place for a long time. Success depends on modernizing and streamlining and on well-trained staff. Review current vendor partners to ensure that the right suppliers are in place to handle the job efficiently. Look for synergies within the organization where potential new growth might be available through existing programs. Partner with corporations whose values mirror your association’s mission. Berg: Four things come to mind that make up my R.O.A.D. map for successful associations: • Remove roadblocks in your structure. This can mean changes in structure, reporting, business processes and maybe even people. Hire the right people, multi-taskers who are relationship-driven leaders and marketers. • Orient and then lead volunteers so they’re successful. Engage them in the right areas of the organization and shows. Keep your volunteer workforce focused on what they know best, probably contributing to strategy, content and relationship building. • Acknowledge that the association is a business. When the association succeeds as a business, it can accomplish more as a nonprofit. • Develop strategy focused on growth and directed toward the future, not the past.
Patricia D. Sherman is a Dallas-based freelance writer specializing in the hospitality industry. She was Senior Editor of The Meeting Professional magazine, taught business and professional writing at several Midwestern universities and managed a b-to-b communications and advertising firm.
Sidebar: Meet the Association Executives
Nancy S. Berg was appointed Executive Director of the Society of Manufacturing Engineers (SME, www.sme.org), in Detroit, in 2000. Previously, she was Director of Expositions, overseeing the association’s 23 domestic and international trade shows. Berg recently established an independent consulting practice, Berg Consultants, based in Moore, SC, with SME as her first major client.
Karen Howe has more than 25 years’ experience in the show industry. She has served as Executive Director, Conventions and Meetings, for the National Safety Council (NSC, www.nsc.org), Itasca, IL, for two years. She was President, USA, AR Systems, based in Toronto, and Vice President of Expositions for Advanstar Communications in New York. The NSC World Expo, among the top 200 trade shows in the nation, has more than 750 exhibitors and 16,000 attendees.
Gregg Balko became Executive Director of the Society for the Advancement of Material and Process Engineering (SAMPE, www.sampe.org) in 2004. Before that, he was Senior Vice President of PROMAX & BDA, a television marketing and design trade association based in Los Angeles and was a Senior Administrator SME. SAMPE, which is based in Covina, CA, sponsors an annual exhibition, as well as symposia and exhibitions internationally.
Sidebar: 2 Things Association Shows Should Stop Worrying About
1. Saving a few dollars. Associations tend to under fund new market and product development and new initiatives for shows, says Nancy Berg, former Executive Director of the Society of Manufacturing Engineers.
2. Being fair. “Of course you must always run a fair and ethical show,” says Berg, “but that doesn’t mean larger or most strategic exhibitors can’t be given superior service, benefits or packages in exchange for the important roles they play. Some organizations hesitate to treat their best customers as gold because they’re afraid that some members or other exhibitors will be offended.
Sidebar: 8 Things Association Shows Should Avoid
1. Depending on loyalty for success. Association shows have to provide value for exhibitors and attendees. Associations that wait for business to come to them are left with empty show floors, says Nancy Berg, former Executive Director of the Society of Manufacturing Engineers, who is now an independent consultant.
2. Assuming they don’t have competition. Association shows tend to have loyal customers, says Gregg Balko, Executive Director of the Society for the Advancement of Material and Process Engineering. “They cut us a lot of slack. But association shows are businesses, and other shows are going after our customers.”
3. Focusing on the show floor. Too often, show managers only know exhibitors who go to the show and set up the booth rather than the people who make the decisions, Berg says. Managers should identify those decision points and establish ties higher in the organizations.
4. Taking a limited view of the market. Berg points out that the association membership might not encompass the entire market. Associations tend to rely on input from members rather than market research.
5. Thinking promotion is marketing. Association shows are often more driven by brochure creation and deadlines than comprehensive marketing strategy. Positioning, content, strategic relationship-building are afterthoughts, says Berg.
6. Not keeping up with changes in buyers’ expectations. “A new generation of buyers may have different value systems,” says Balko. The Internet is one of the biggest challenges for shows. “People think it answers all their questions. We have to position the show as a place where they can get answers to questions they haven’t thought of asking.”
7. Adopting the worst practices of their members’ industry. There’s a tendency for organizations to model themselves after their industry. Engineers, for example, Berg says, tend to be detail-oriented and even a bit skeptical, which can require extensive justification of new ideas and change. Unchecked, these traits can slow down the ability to respond to opportunities and trends.
8. Making bad deals. Decisions, such as location or hotel commitments, are frequently based on members’ personal travel and recreation preferences, rather than sound business principles, Berg says.
