September 2003
One neat package

Association creates its own general service contracting company to stabilize or reduce exhibit costs at PACK EXPO

By Cathy Chatfield-Taylor

In the week preceding PACK EXPO International 2004, to be held Nov. 7–11 at McCormick Place, Chicago, 1,600 exhibitors will move 16 million pounds of packaging machinery into 1.2 million net square feet of space. The charge for this Herculean effort? Just $3 per square foot.

Once the largest and most unpredictable cost associated with exhibiting in PACK EXPO, drayage is now included in the space fee. The Packaging Machinery Manufacturers Institute (PMMI), Arlington, VA, had planned a $1 per square foot space fee increase for 2004, then added an additional $3 to cover the cost of providing drayage, which had been charged by the 100 weight.

“As the cost to exhibit went up, exhibitors would bring less machinery,” says Jim Pittas, PMMI’s Director of Expositions. “Our attendees want to see machinery, so the way to counter that trend will be to provide drayage. Now exhibitors can bring as much machinery as they want, and 80 percent will be even or save money.”

Exhibitors who have been members of PMMI for more than seven years will now pay just $13.50 per square foot including drayage, up from $9.50 per square foot in 2002. Non-members, who comprise 60 percent of the exhibiting companies and 40 percent of the exhibit space, will pay $21 per square foot, up from $17.

The drayage-included program is part of PMMI’s overall plan to create more value for exhibitors. To make it happen, the association had to take the unprecedented step of creating its own general service contracting company, PACK EXPO Services LLC (PES).

Unlike a for-profit general service contractor, PES can operate with near zero assets. Staffed with two to four full-time employees, PES will manage delivery of all exhibitor services by subcontracting with various suppliers, from freelance material handlers to cleaning companies. In all, at least 15 services will be packaged and delivered through PES.

PMMI has licensed The Expo Group’s Single Source Solution® to provide online order-processing and customer service, with the ultimate goal of “taking the hassle out of exhibiting,” according to Matt Croson, PMMI Director of Communications.

Instead of having to order services from multiple vendors with different deadlines, exhibitors will be able to order all services on one online form (with the possible exception of facility exclusives such as electrical and plumbing) and have one customer service contact from pre- to post-show. PES will be responsible for quality assurance, and PES aims to be more proactive in addressing problems as they arise.

PMMI expects to deliver superior service by providing one customer service representative for every 75 exhibitors. And they expect to stabilize if not reduce exhibitor costs by leveraging high-volume purchasing power and eliminating for-profit mark-ups. “Even though we can’t predict there will be an X percent decrease in costs, we’re confident that we can at least stabilize costs over time,” says Croson.

One key to savings will be upping the number of pre-orders to at least 90 percent with an aggressive pre-show communication campaign that will include monthly online exhibitor universities. The goal will be to hit home the idea that exhibitors can save money by ordering early and using the preferred vendors.

“Pre-ordering is a tough issue for our show because of its size,” says Pittas. “Our show taps out our vendors. When they get orders on site, it wrecks havoc with their system.” If more exhibitors order early, vendors can be more efficient delivering services, and PES will be able to negotiate better prices in the future.

“We’re going to make a concerted effort to sell that value proposition and make it clear to them that they benefit directly by participating,” says Croson. “We’d like to get everyone involved in PACK EXPO Services so we can get the best prices for everyone.”

PACK EXPO STRATEGY
Goal:  Enhance the value of the PACK EXPO brand. 

Objectives:  Stabilize the cost of exhibiting, improve customer service and take the hassle out of exhibiting.

Strategy: Create PACK EXPO Services LLC to serve as general contractor for PACK EXPO tradeshows.

Tactics:  Include drayage in the exhibit space fee, negotiate competitive prices for exhibitor services, and provide a single point of contact for customer service, a single order form for all services, and a single deadline for ordering.   

Results:  Drayage-included program is expected to stabilize or reduce costs for 80 percent of exhibitors.