2008 february expo features FINAL.

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SURVIVING A
DOWN ECONOMY
Take steps now to ready your
show for what lies ahead
By Francis J. Friedman

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G ravity and economics dictate that what goes up must
come down. The past four years have seen a rise in over-
all economic activity. Now, however, with the effects of the sub-
prime mortgage crisis and the tightening of financial liquidity
and credit availability, exacerbated by increased costs for such
items as energy, raw materials and health care, we’re sitting on
the edge of an economic downturn. Consumer out-of-pocket
expenses for energy, mortgages and food are increasing faster
than wages, and as consumer spending slows, business sales and
profits are also expected to slow. This can lead to reduced
employment, reduced capital investment, and reduced market-
ing and promotion expenditures.
We can soon expect chief financial officers (CFOs) to trans-
form into aggressive cash guardians. Budgets could be tightened
significantly to meet the fundamental needs of the business and
deliver the earnings per share (EPS) targets promised to Wall
Street. In effect, the CFO now becomes the new customer
spokesperson for both exhibitors and attendees.
How can you protect your show? A thorough analysis of
your industry, as well as your show’s exhibitors and attendees,
will provide insight on how to plan for a potential downturn.
History is our teacher
Black Monday (Oct. 19, 1987) saw the stock market
lose 22.6 percent of its value in a single day. The ripple effect
collapsed markets around the world. It wasn’t until 1992
that business got back on its feet. What we learned from
that downturn:
1. Cut fixed costs. Outsource everything that can be outsourced.
2. Reduce payroll; hire temporary workers.
3. Cash is king. Wall Street values companies with positive
cash flow.
4. Increase financial controls and improve financial control
systems.
5. Invest in technology to lower costs and increase efficiency.
These new business practices fostered the concepts of the
lean, agile, learning company, one that can quickly respond to
changing competition, convert market opportunities and learn
how to invent its future.
The 2000-2003 bear market
The 2000-2003 downturn saw businesses react much faster
and more aggressively than in the 1987-1993 declines. The
increased investments in technology and that lean, agile organiza-
tion, came to the forefront. Business responses included:
1. Quickly cut outsource contracts; reduce personnel, invento-
ries and expenses.
2. Implement even tighter spending and operational controls.
3. Use new Internet technology to reduce travel expenses.
The two biggest changes to affect the exhibition industry
were the increase in justifying return on investment for
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exhibiting and a new wave of exhibitor companies holding their
own private events. including full-blown trade shows.
The recent economic surge
The 2003-2007 period has seen the uniting of customer
relationship management (CRM) and multimedia marketing,
including all forms of the Internet. Today’s marketing strategy:
1. Intense customer-centric focus.
2. Building brand awareness and brand loyalty using multimedia
tools.
3. Integrating Internet tools and personal interaction to reach
and influence more potential customers, more frequently, in
many different modes and at lower costs.
4. Cash is still king. ROI, ROI, ROI.
5. Engagement is the key to customer development and brand
loyalty.
Understanding your show’s economic
fundamentals
The first step in protecting your show is to comprehensive-
ly understand the financial underpinnings of the economic
sector your show serves.
As the different sectors of your industry feel the economic
pinch, where will money dry up first? Will attendees feel the
pinch first, or will exhibitors? How deeply will cut-backs be felt
by each sector of your industry? What impact will each sector’s
cut-back have on the potential exhibitors and attendees for
your show?
Knowing the deeper segmented economic structure of the
industry provides advanced warning as to what’s ahead in an
economic slowdown. This advanced warning allows you to
develop specific strategies and programs to meet the needs of
each industry segment as it faces a slowing economy.
Shifting exhibitor and attendee patterns
Exhibitor and attendee patterns diverge as the economy
changes. Exhibitors make financial commitments for booth
space well in advance of the show. As most show organizers can
attest, more and more attendees make financial commitment to
attend a show at the last minute. This difference in financial
commitment timing creates different participation patterns
between exhibitors and attendees.
In an economy just starting to turn down, a show organizer
typically sees a continuing up trend in booth sales, as exhibitors
continue to reserve booth space based upon the current up
economy and their associated available marketing budgets.
By show time however, the anticipated number of attendees
might fall considerably behind last year’s experience because of
last-minute cuts in company travel budgets. As we learned after
the dot-com bust and 9/11, cash budget categories, like travel
and education, are usually among the first to be reduced in an
economic downturn.
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SURVIVING A DOWN ECONOMY
In a slowing economy, show organizers shouldn’t assume
their shows are doing well just because exhibit space sales are
continuing on track or upward. In a down economy, show
organizers have to assume attendees are already under CFO
cash flow attack and facing internal budget cuts. Show organiz-
ers must develop their attendee promotion plan based upon
the assumption that the CFO has already said “no” to attendee
travel budget requests.
Understanding trade show audience
loyalty
Show organizers are in the attendee business. Exhibitors
expect shows to deliver a qualified audience or they won’t
participate. To deliver this audience, especially in a down
economy, show organizers must understand the composition
and loyalty of their attendees, which can be compared to an
archery target with concentric rings. At the center of the target
is the core audience, its most loyal group of attendees at the
show. Typically, they attend every show. They’re the heart of
the show and the ones who are most invested in the industry
or the show.
Moving outward from the core are successive rings of
attendees with decreasing loyalty and commitment to the
show or the industry. Typically, the core group and the next
two emerging rings of attendees comprise the essential audi-
ence for a show. The size of these successive two attendee
rings varies by show and what they contribute in total atten-
dance at a show.
Successive audience rings outward from the core include
people who are progressively less loyal to the show. These
groups include people who want to be where the action is in
the industry, have additional available budget to attend
trade shows or attend as part of an expanded
presence by a company that’s already attending.
These expanded outer attendee rings con-
tribute to growing attendance numbers
in an expanding economy, but they’re
the first ones to leave a show in a
downturn.
An analysis of historical
attendance records can
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help you determine the composition of your attendee loyalty
groups. For example, attendees who have participated for each
of the last five years can be considered core attendees. Those
who have attended four of the last five years can be considered
part of the next most loyal attendee group, and those who have
attended for three of the past five years can be considered as
part of the next most loyal ring of attendees.
There are other methods for analyzing attendee loyalty
based upon the industry and the show. Another approach is to
analyze how many years a given company has sent representa-
tives to attend the show. It may be that there’s a high turnover
of specific individuals year to year, but a given company may
always be represented with attendees at the show. In this
analysis format, companies with five consecutive years of
attendance at the show would go into the core attendee group
and so on.
Another alternative would be to analyze past attendees by
job title or job function. What’s the most popular job title at
the event over the past five years? What’s the least popular or
transitional job title or job function at the event over the past
five years? This analysis would lead to a sorting of job titles or
job functions into the appropriate loyalty rings for the show.
Once you’ve evaluated your audience composition, you can
determine what each segment wants and needs from your show
through market research.
Engagement by segment
Today’s marketer is focused on engagement — the ability to
emotionally involve the customer in your product or service to
the exclusion of competitive offerings. The higher the level of
emotional engagement in your product or service the greater the
brand loyalty.
Engagement is driving new types of research,
strategic planning and tactical implementation
for show offerings. No longer can show organ-
izers assume an audience is engaged in a
show just because they show up. The
2008 february expo features FINAL.qxp 1/30/2008 2:55 PM
question today is: How engaged is the audience, and will they
show up again and again at future shows?”
Assessing the engagement of each audience segment is an
important step in helping to determine how loyal that segment
will be, or remain, to the show. Look at how much time atten-
dees spend on the trade show floor. How many seminars do
they attend? How many days do they stay on show site? How
much networking do they engage in? What more is each audi-
ence segment wanting from the organizer to increase their sat-
isfaction and engagement? How well do they like the show?
By segmenting each audience target and assessing the
engagement level of each segment in your show, you can begin
to determine where the show has existing strengths and where
the show needs to implement remedial actions. You need to
determine if there’s enough existing research to answer these
questions or whether it’s time to implement a research and
information-gathering program to increase customer retention.
Segment analysis will also help you determine where the
show is most vulnerable from an exhibitor perspective.
Traditionally, trade shows are vulnerable to the loss of the
10-by-10 exhibitor population that’s new to a show on an
annual basis. The exhibitor vulnerability question can also
be assessed by product segment in the show, as well as by
booth size.
Analyze your programming
What programming needs to be developed for each segment
of the show’s audience to hold them in the show? What does
each segment want, and what are they willing to pay for? The
program includes the exhibit floor, educational sessions, net-
working, special events and physical space management. Unless
the programming for each segment is compelling, they’ll find
reasons to stay home, especially when cash is tight.
In an up economy, the trend is to look at opportunity and
business expansion programming. Downturn economy program-
ming should focus on helping attendees solve problems that
immediately confront them. These problems generally tend to
be related to cost control and cost cutting, doing more with less,
maintaining sales and sales volume with reduced resources,
finding new business, working with current customers, etc.
Problem-solving programming formats include expert
speakers, case examples, industry leader panels, technical paper
presentations, exhibitor showcases and facilitated roundtable
networking sessions. Programming focused on problem solving
makes it easier for prospective attendees to justify attending
the show.
The last-minute decision to attend a trade show is typically
based on the prospective attendee’s perceived price/value rela-
tionship for the time and money invested to attend the show. To
increase the attendee’s determination to attend, add more value
to the show. The tricky part is determining what value is for
each segment.
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4 tips for
promoting
your show
in a down economy
1. Write for the CFO
Many attendees need permission to attend a trade
show. Your pre-show brochures need to be the
sales tool that enables an attendee to visit your
show. Pre-show promotions need to be written as
if you are speaking directly to the CFO asking for
travel money. Be specific and benefit oriented.
Answer the question: What will I take home and
put to work if I attend your show?
2. Showcase new as problem solving
People attend trade shows to see what’s new. In a
down economy, new has to be re-cast as problem
solving in pre-show brochure copy. By presenting
new in the context of helping to solve problems, a
trade show becomes more relevant to its industry
and better able to justify CFO travel approval.
3. Engage exhibitors to promote the show
Most shows already encourage pre-show exhibitor
promotion. In a down economy, however, this
activity needs increased attention by show man-
agement. Exhibitor customer service reps should
tout free pre-show promotion tools. Continuing
exhibitor pre-show follow-up will be necessary to
ensure these tools are actually implemented.
4. Engage the facility and the city
A fall-off in economic impact from a show hurts a
city and a facility. Many facilities and cities can
provide in-kind services to help organizers promote
their show. These services can include attendee
telemarketing, e-mail blasts, blogs, links from their
Web sites to your show and CVB newsletters. Ask
what they can do to help market your show.
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SURVIVING A DOWN ECONOMY

In addition to problem-solving programming, added value Lower costs

may include more networking sessions, a cocktail party for key
Managing in a down economy means squeezing costs out
attendee executives to bring this high-value segment together, a
of the trade show equation for both exhibitors and attendees.
charity event for all participants related to a highly valued charity
Show managers must look at all costs they incur, and that are
for that group, CD/MP3 recordings of key seminars, a surprise
incurred by both attendees and exhibitors, to see where reduc-
guest speaker or a unique spouse program. The specific added
tions can be made.
value should be determined by the segment analysis and the
Can the average hotel block room rate be negotiated down?
positioning of the show in its market.
Can less-expensive hotels be included in the room block? Can
an official airline offer lower airfares? Can set-up rules be
Be empathetic changed to allow more time for hand-carry of exhibit materials
The lack of empathy by a trade show for its industry in a or for plugging in pre-approved booth lights? Can a different
downturn ensures that the show will not fare well. Generally, ground operator provide lower-cost airport transportation?
this is most apparent in pre-show brochures that don’t match Anything a show organizer can do to lower the out-of-pocket
the current tone of the industry’s economic state. Mismatched costs for both exhibitors and attendees will place the show in a
brochure copy includes an overly optimistic tone or too much more advantageous position.
emphasis on new equipment and new technology.
The problem is that in a down economy as people are Building in-person participation
laid off and as cash management becomes a major priority,
A down economy will lead exhibitors to focus on their own
businesses cut back on their new purchases. They extend the
private events, and both exhibitor and attendee companies will
life of current equipment, look for used equipment or defer
rely more on technology for information and communications.
purchases entirely.
New Internet capability upgrades, advanced video technologies
Empathy in pre-show brochure copy is a subtle art. The copy
and lowered costs will all contribute to encourage people to stay
can’t be gloom and doom either. “New” has to be framed as part
home and conserve budgets.
of problem solving, reducing costs or improving performance.
To overcome these reasons to stay home, a show organizer
The closer the pre-show brochure copy can capture the mood
has to build community — which is the other side of engage-
and pain of its industry and offer solutions and hope in its tone,
ment. You may have to spend more of your pre-show marketing
the more compelling the show will be perceived by its intended
effort on community building to increase actual on-site partici-
audiences.
pation. Pre-show community building can include Webinars,
The goal is for the industry to know that the organizer under-
video streaming of interviews or other content, blogs and viral
stands who they are and what challenges they’re facing. And,
marketing campaigns. The amount and type of this pre-show
that the organizer will produce an event that addresses the
community-building effort will depend upon the show and its
audience and meets their needs.
key audience segments.
As much as businesses use digital technology, people still
Increase customer service want and need to be with each other in person. The payoff of
For exhibitors in a downturn economy, a show organizer needs the pre-show community-building campaign is that people will
to increase its customer service efforts to help exhibitors be more want to be together in person at the show.
successful. Pre-show customer service includes such activities as
making personal pre-show contact with each exhibitor, helping an The view ahead
exhibitor to manage his space commitment level to stay in the
The depth and length of the coming downturn are unknown
show, counseling an exhibitor on how to exhibit with lower
at this time. What is known is that the slowdown is already
drayage expenses, helping exhibitors prepare their pre-show mar-
having its effects on a number of different industries. By taking
keting programs, and a post-show phone call to encourage exhibi-
the time now to analyze your show and pre-plan for a potential
tors to convert their show contacts into follow-up sales calls.
downturn, you can avoid nasty surprises later.
Many times in a down economy there’s turnover in exhibit
management. The new person may not know your show or may
have never managed an exhibition effort. Good customer service
Francis J. Friedman is President of Time & Place
will help that person create a successful exhibit program and Strategies Inc., a full-service consulting company to
justify the expense of exhibiting. the trade show, event and association communities.
In addition, on-site amenities for exhibitors and attendees He has extensive senior management experience
to help ease travel difficulties may include concierge services, assisting clients to build successful, branded, trade
pre-flight baggage check-in, direct transportation service to the shows and events in both down and up economies. He has also
airport, flight updates, weather alerts, etc. received the prestigious Chairman’s Award from IAEE.

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