Posts Tagged ‘Tradeshows’

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Let’s Restructure Material Handling Rates at Trade Shows


2010
05.24

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Posted in Consulting, Tradeshow Management | 4 Comments »

While we all struggle to increase participation in meetings, tradeshow and special events, the issue of making exhibitor participation in trade shows more affordable has been making headlines…particularly here in Chicago.

   The biggest complaint I generally hear from exhibitors is the cost of material handling, also known as drayage.  It’s difficult for exhibitors to understand why it sometimes costs more to have their crates unloaded from a truck and moved to their booth, than it does to ship them across the country.  There is more to material handling service charges than simply unloading the freight from a truck and moving it into an exhibitors booth (also included are removing the empty crates from the booth once they are unpacked, storing them, returning them at the close of the show, and then loading them out onto trucks). However, I believe the current trade show material handling cost model is broken and outdated.

Presently, the material handling cost to exhibitors from general service contractors (GSC) is based on a dollar amount charged per hundred pounds, or per CWT (which stands for cart weight).  A CWT is a unit of weight measurement equal to exactly 100 pounds (a hundred weight), created and used by U.S. merchants since the late 1800s. Traditionally, this measurement is used by large common carriers in rating charges for freight.  It is also used by GSCs in the trade show industry.

I suppose it’s easy to understand why the GSC community initially adopted from the trucking business the CWT measurement for exhibit freight.  It was established and already in place, so GSCs (who came along long after trucking) found an easy unit of measure based on freight weight that they could bill from.  But is trucking freight across the country, and GSC material handling for trade shows an apples-to-apples comparison of services? 

I would argue they’re not.  However, GSCs have been using this billing model since exhibitions began, and exhibitor revenue from material handling constitutes approximately 75% of the GSCs profit on a trade show.  Knowing this, what can we do to restructure the costs and billing metric for material handling to make exhibitor participation more affordable?  I suggest that event producers and general service contractors give serious consideration to the following.

  • Change the general service contractor’s current metric of charging per hundred pounds (CWT.) for material handling to either a “per square foot”, or “time and materials” charge.
  • Change the general service contractor’s current business model so as not to rely on material handling for up to 75% of their profit margin. This would require industry acceptance by event producers and all GSCs, because if we ask general service contractors to lower material handling pricing, they will then need to charge the event producer for other items which have not traditionally been billed to event producers (or perhaps billed at a deeply discounted rate), such as show management decorating, furnishings, graphics, carpeting, custom booths, shipping, etc., and also bill for GSC employee planning time, travel expenses and/or charge the event producer a “management fee.”

While I realize that charging for material handling based on square footage or time and materials (as opposed to weight) are not new ideas, I thought it might be interesting to outline a couple of examples to stimulate some ideas and input. 

As you read on, please keep in mind that every show is different and there are a myriad of variables that can affect the general service contractor’s pricing, i.e., size of show, dates and location of show, type of show, etc.   As I was putting the following examples together, I was imagining a tradeshow of approx. (400) booths held in Washington, DC.  Let’s assume the show has approximately 250,000 lbs. of exhibitor freight, and if material handling rates were based on the traditional model of per CWT, the rate would be a flat (both warehouse and show site) $75 per hundred pounds.  The examples aren’t perfect, but hopefully they will help us all think about possible options for lowering the cost to exhibitors. 

Material handling pricing model based on square feet

A few footnotes regarding this model:

a)       The cost per square foot would be negotiable between the general service contractor and the event producer, i.e., lower or higher depending upon labor costs in a particular city, size of show, dates and location, length of contract between event producer and GSC, etc.

b)      To encourage exhibitors to purchase more exhibit space, the square footage pricing could be “tiered”, i.e., exhibitors with more space might receive a lower  per square foot material handling price

c)      The material handling costs can either be packaged into the event producer’s booth fee cost…or billed directly from the GSC to the exhibitor

Exhibitors with 100 square feet (10’x 10’ booth) – 300 square feet

  • Crated or palletized freight = base rate of $2.25 per square foot… (or $225 per 10’x10’ booth)
  • Loose boxes or cartons which need to be palletized for fork lift or brought in on flat carts = Add $1.00 per square foot to base rate
  • Load in or load out on overtime = Add $1.00 per square foot to base rate for each occurrence

 Exhibitors with 301 square feet – 600 square feet

  • Crated or palletized freight = base rate of $2.00 per square foot
  • Loose boxes or cartons which need to be palletized for fork lift or brought in on flat carts = Add $1.00 per square foot to base rate
  • Load in or load out on overtime = Add $1.00 per square foot to base rate for each occurrence

 Exhibitors with 600 square feet or more

  • Crated or palletized freight = base rate of $1.75 per square foot
  • Loose boxes or cartons which need to be palletized for fork lift or brought in on flat carts = Add $1.00 per square foot to base rate
  • Load in or load out on overtime = Add $1.00 per square foot to base rate for each occurrence

 Another model might be to have material handling costs billed to exhibitors on a “time and materials” basis. 

Material handling pricing model based on “time and materials”

a)      Time—assume the total cost of a worker to handle exhibitor freight is $85/hour.  This includes the cost the general service contractor must pay the worker per hour, including vacation and benefits.  Also included is the general contractor’s employee time to supervise the labor, payroll costs, and profit.  Assume for each 10’ x 10’ booth, it requires (1.5) workers for (1.5) hours to unload the exhibitor freight from a truck and move it into the exhibitors booth, removing the empty crates/boxes from the booth once they are unpacked and store them, and finally return the empty crates/boxes at the close of the show, and once they are packed, load them out onto a truck.  This example also includes costs for special handling, i.e., loose boxes, and miscellaneous non-forklift driving freight personnel, i.e., checker, etc.

The straight “time” cost per 10’ x 10’ booth would be $191.25

If on overtime, add 25% ($47.81) or…$239.06 per 10’ x 10’ booth

b)      Materials—assume that the general service contractor rents (some GSCs own this equipment, but let’s assume they are rented) three (3) forklifts per (100) booths. (400) booths = (9) forklifts.

Cost of forklift per week…approx. $500 x 9 = $4,500

Cost of delivery/pick-up…approx. $400

Cost of fuel/surcharge…approx. $75 x 9 = $675

       Sub total = $5,575

Plus…standard 30% contractor mark-up of materials  =$1,672.50

Total materials cost for (9) forklifts = $7,247.50 divided by 400 booths = $18.12 per 10’ x 10’ booth

Total cost for 10’ x 10’ booth on straight time based on “time and materials” :  $191.25 + $18.12 = $209.37

c)      The cost per hour would be negotiable between the general service contractor and the event producer, i.e., lower or higher depending upon labor costs in a particular city, size of show, dates and location, length of contract between event producer and GSC, etc.

d)     Because this model is based on actual time and materials utilized, I would not provide a discount to exhibitors who rent larger space.

e)      I do not see this model being packaged into the event producer’s booth fee cost, but rather billed directly from the GSC to the exhibitor

In order to make either one of these models more affordable for the exhibitor, the general service contractor base rate, e.g., cost per square foot, or cost per hour, must be structured low enough so that the total material handling cost to the exhibitor would be at least 50% lower than the anticipated material handling cost to exhibitors utilizing the existing CWT pricing model.  Otherwise we would just be swapping out “units of measure.”  And, as I previously outlined, in order for the base rate to come down, it must be accepted and encouraged industry wide.   Event producers have to be open to a model where GSCs charge for what have typically been complimentary show management items and for GSC personnel time and travel.

These are just my initial ideas to spark thoughts and conversation.  I realize that material handling is just one facet in the current trade show business model that needs to be addressed in order to make exhibitor participation in trade shows more affordable.  I hope that many of you out there feel the same way.  The current tradeshow model is outdated, overpriced and desperately needs to be revamped in order to attract customers (exhibitors) and flourish. 

Thanks for reading and I welcome your thoughts and comments.

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Asking Attendees and Exhibitors for Input


2010
05.05

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Posted in Consulting, Meeting Planning, Special Events, Tradeshow Management | 1 Comment »

My current career path allows me to work with several client events (both corporate and association) and my assignments vary.  Sometimes I’m involved with the advance planning, other times I’m hired to only to work on-site, and sometimes I’m just brought in to handle “one time” projects such as writing an exhibitor prospectus, or researching the feasibility of starting a new event.  In virtually every one of these business ventures, I’ve been extremely lucky and grateful to work with a lot of very talented and nice people.

Having said that, I have to admit that something has been bothering me.  I am continually surprised that several of my clients (past and present) don’t keep up-to-date with obtaining customer feedback from their face-to-face marketing events.    Whether an annual meeting, trade show or corporate event, I have seen situations where extremely valuable customer information (which could have/should have been used by the event producer to help make strategic business decisions moving forward) was not gathered. 

We all know that businesses in other industries (outside of the face-to-face event production arena) utilize market research, consultants, and obtain customer feedback via surveys, focus groups, telemarketing, etc.  So why do some event producers fail to communicate with their customers and gather business critical information?  Why don’t we ask our customers (because that’s what they are) what they need and want? 

  Is it because the event producers are too busy?  Is it that they get too tied up in managing event logistics, that they can’t see the forest through the trees?  Are they afraid talking to customers will add more work to their already full plates?  Some of these reasons may play a part, but I think the real culprit is “fear of change.”

Let’s face it; most people don’t like change.  We get into our day-to-day (or should I say, event-to-event) routines and it’s easy to say, “This is how we’ve always done it”, or “the board, committee or executive director would never approve that.”  However, in today’s high-speed, super technological environment, being open and able to change quickly based on customer wants and needs is a prerequisite for any successful business.  So, event producers beware:  Albert Einstein defines insanity as, “doing the same thing over and over again and expecting different results.”

We should be asking our customers (attendees and exhibitors) what they want and need…on an ongoing basis. What I mean by “ongoing” is before, during and after each event.  For example, I remember reading about an event producer who, prior to their event, created an interactive environment between registered attendees and speakers.   Registered attendees were able to supply questions to the speaker in advance of the event so the speaker could address the questions during the session.  And this interaction was “live” right up until the session.  What a great way to keep the session cutting edge and to provide the speaker with information so he or she could deliver the most pertinent up-to-date information in a session.

In terms of obtaining on-site feedback, many of you have probably read about the use of Twitter during educational sessions to provide live feedback between the audience, the speaker, the event producer…and even other interested people not attending the conference.  It’s here, it’s being done now and it’s a successful way to obtain feedback.

Another commonly used method for obtaining customer feedback on-site is to have small “by invitation” feedback lunches with attendees and/or exhibitors to talk about their impressions.  Most people are very receptive to these as long as they’re not too long and a skilled staff member or facilitator keeps things moving.  Also, it’s a nice way to say thank you to participants.

  There’s always the most traditional method for obtaining customer feedback: the survey.  Surveys can (and should) be done before, during and after every event.  I have found the best way to obtain a large response rate is to offer some type of personal incentive for completing a survey (a chance to win an iPad, a trip to some nice location, etc.). The free conference registration typically offered just doesn’t seem to cut it anymore.

What’s also great now is the variety of inexpensive survey tools on the internet, for example, Survey Monkey.  In addition to being cost-effective, these services have nice templates that can be emailed, and can handle some basic tabulation for you.  One important thing to keep in mind when developing survey questionnaires is to hire someone with market research experience.   Most event producers do not have the market research experience and knowledge to write non-leading, objective, unbiased survey questions.  So, budget some dollars and hire a market research professional to help.  It will be well worth your money if your questionnaire is more precise and to the point, and you will achieve definitive results.  Exhibit Surveys is a well-known market research company with a great reputation for solid work.  And there are other smaller firms, like Premier Research Solutions, founded and run by my long-time friend, Linda Wing with whom I worked at SmithBucklin.

The bottom line is this.  We all need to stay in better touch with our customers so that we don’t lose sight of why they are participating in our events.  The customer you never hear from after an event…and who never comes back…is the worst possible scenario.  But that doesn’t need to happen.  Reach out, stay in touch and ask the customers (attendees and exhibitors) what they want and need from your event in order for them be successful in their businesses.  And then…be sure to deliver it…and you and your event will be successful as well.

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Education is King & Get Involved in Your Industry Associations


2010
04.08

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Posted in Consulting, Meeting Planning, Special Events, Tradeshow Management | 1 Comment »

I was thinking about how tough it must be for those young people who are just finishing college.  Imagine how discouraging it must be as they attempt to enter the workplace, only to find minimal employment opportunities.   A recent article in the Chicago Tribune stated that the jobless rate for 16 to 24-year-olds is 18.5%.  Although my kids are now in elementary and high school, if they were in junior or senior year of college, I would tell them to stay in school and work towards a graduate degree.   I mean, what else would they do if they left school in today’s job market?  I suppose they could volunteer their time with some worthy cause, but then again there’s probably a good chance they’d sit around the house, eat, and bum money.

I think there’s an analogy for those of us in the meeting, tradeshow and special events industry.  Unemployment continues to rise, the job market is dismal, and growth in events is slow.   Why not make the best of it by using our time to educate ourselves about important issues within the industry, and participate in the activities our industry associations offer?

The industry associations I belong to, i.e., Association Forum of Chicagoland (The Forum), Professional Convention Management Association (PCMA), International Association for Exhibitions and Events (IAEE), and the Green Meeting Industry Council (GMIC), all offer education and other ways to get involved too.     

The cool thing about utilizing industry associations is that we can accomplish these two things, education and participation, for free…or at least at a reasonable cost.  For example, The Forum recently offered a very informative session, titled, “Pushing Your Vendors: How to Get Affordable Local, Organic Foods for Your Meetings and Events.”  It was free and was an excellent session.  They have another free upcoming session for members, “Protecting Your Organization from Fraud.”  Not only can you learn something at these sessions, but you can network and meet people.  Whether you’re a planner or supplier, meeting new people or reconnecting with those you already know from the industry is a must.

PCMA, IAEE and GMIC hold educational sessions every other month or so.  I’ve seen all types of good topics including; “Virtual Events: Fad or Fabulous?”, “Calculating the Return on Your Show Using the ROI Toolkit”, “Top Industry Leaders on the Future of Meetings – Where is our Industry Headed Today?”, “Creating Surveys to Maximize Effectiveness”, and the all too familiar and mysterious for some “Social Networking.”  Although half or full-day programs run a little more, the cost for breakfast or early evening association-produced sessions is usually very reasonable.  The presenters I’ve seen are very good, and the attendance is a nice split between planners and suppliers, which produces great networking.   

Nothing against Webinars…which are great and allow remote access to education, but in our business…nothing is better than face-to-face interaction.  Some other things we all should be doing more of while things get back up to speed is getting more involved with our industry associations by volunteering for committee work, or involvement with an association’s special interest groups (SIGs).  I made a conscious decision at the end of last year to get more involved in the groups I belong to.  I joined the Chapter Relations Committee of my local chapter of PCMA.  I also have volunteered to join the Golf Tournament Planning Committee (maybe a little selfish indulgence here) of my local chapter of IAEE, and I’m serving on the board and membership committee of the local chapter of GMIC.   

You’re probably thinking…either this guy must not have any work, or he’s independently wealthy.  Well, let’s set the record straight that the latter is definitely not the case.  And, my “regular job” is doing fine, except like all of us I could always use a few more accounts. 

In terms of time commitment to get involved with your industry associations, done correctly, i.e., everyone does a little; committee, board or SIG participation in these groups does not have to be an overwhelming obligation.

Through these opportunities, we can give back to the industry and the associations by sharing our talents and connections.  We also reap the benefits of new friendships with other members, and gain exposure within the industry by participating.  What a win-win for everyone. 

Hopefully we’re on the road to economic recovery, but we can use the slower time wisely.  I suggest we take advantage of this time to get educated, participate, network and make good use of the membership dollars either you or your organization pays the industry associations for your membership.

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Greening Your Events


2010
03.17

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Posted in Consulting, Meeting Planning, Special Events, Tradeshow Management | No Comments »

  In the spirit of Saint Patrick’s day, I wanted to share some thoughts about why…even in an environment of budget cuts and job scarcity in our industry…we should work hard to continue to support and implement sustainable practices and the “greening” of meetings, tradeshows and special events.

The concept of environmental responsibility and sustainability have been around for some time now, but we have a long way to go in terms of 100% participation by the meetings/tradeshow and special events industry.  But with that said, there are lots of great sustainability initiatives going on, and I’m sure you’ve read numerous articles in the industry trade journals about what some association and corporate groups are doing.   But rather than rehash those, I’ll share with you some recent personal experiences. 

  While attending the PCMA Midwestern Chapter March Educational event at the Chicago Hilton, I noticed a couple of simple, yet important things related to sustainability in the meetings environment.  During the educational sessions, the hotel provided water stations with eco-friendly plastic like cups made out of some type of corn based product. 

Apparently, these cups can be thrown out and will disintegrate quickly in a land-fill…as opposed to regular plastic cups which I think take like 90+ years to disintegrate…if ever.    Additionally, the hotel had recycle bins throughout the public areas and in the meeting rooms.  These are small things, and there may have been more I overlooked, but obviously the Chicago Hilton is making an effort by implementing sustainable practices and being environmentally responsible with their group meeting business. 

And here’s the beauty of this example at the Chicago Hilton and why it’s is win-win for everyone.  As a meeting planner who decides or influences where meetings are Chicago booked, obviously I noticed the eco-friendly plastic like cups.  And, it made me feel good that the Chicago Hilton was using them.  If I noticed them, you can bet that many other planners in attendance at the PCMA meeting did too.  So, even though the eco-friendly plastic like cups may cost the hotel a little more money than regular plastic cups, the Chicago Hilton, by branding itself as practicing sustainability and being environmentally responsible (which a lot of people care about and think highly of these days), may in fact influence me or other planners in our decision to select them versus another hotel to place a meeting.  And, as affirmed by the age old adage, “people buy from people they like.”  So, not only is what the Chicago Hilton is doing great for the environment, but it’s also smart business. 

I also recently attended a session sponsored by the Association Forum of Chicagoland, “Pushing Your Vendors: How to Get Affordable, Local, Organic Foods for Your Meetings and Events.”  The presenter was Greg Christian from gregchristianconsulting.com.   Recognized as “Chicago’s Conscious Caterer™,” Greg is a professional chef, caterer and entrepreneur, author (he has a new book, Food and Forgiveness) and a pioneer in the foodservice industry’s zero-impact movement.   His message is very moving and inspiring.   Because of a variety of reasons, including unsustainable farming practices, and creating a tremendous amount of waste, Greg feels that the food service industry has been a destructive force and has been using up a lot of the earth’s non-renewable resources at an alarming rate. 

Greg believes that the meeting, tradeshow and special event industry (especially because over 5 billion dollars is spent annually on catering) can have a tremendous positive impact on the environment by selecting foodservice providers that use seasonal, and locally grown organic foods.  And, that if event producers begin this requirement process early on, i.e., at the request for proposal (RFP) stage, with suppliers (hotels, convention center, caterers, etc), the requirements and process will be easier to implement.  And most importantly, the positive impact event planners and suppliers can make on our community, and our environment.   

Additionally, Greg has been instrumental in working with the Accepted Practices Exchange (APEX), an initiative of the Convention Liaison Council (CIC), to write policy and procedure focused on bringing together best practices and standards related to food and beverage for green meeting and events, including sample RFPs.  For more information about APEX, visit http://conventionindustry.org/apex/inprogress.htm

Here’s a  video of Greg talking about his journey and message.

        

And last, but certainly not least, I recently received an invitation to join and participate in a relatively new (6 year old) membership-based professional organization, the Green Meeting Industry Council (GMIC).   As described on their web site, www.greenmeetings.info, “The Green Meeting Industry Council (GMIC) is the premier global community solely dedicated to sustainability in the meetings and events industry, not only through education but also by spearheading research, policy and standards.”

GMIC’s membership dues are very reasonable ($185 per year for individual membership, and varying levels of participation for supporting business memberships) and a good friend of mine, Barbara Connell with the American Society for Gastrointestinal Endoscopy (ASGE), is going to be heading up the Chicago chapter as president.   

Following are the organization’s mission and vision statements, and a short video from the organization’s founders.  If you’re interested in getting involved and doing more in terms of implementing sustainable practices and “Greening your Event”, it might be a really good idea for you to join GMIC. 

       
 

GMIC Mission:
The Council seeks to transform the global meetings industry through sustainable practices which incorporate environmental considerations throughout all stages of a meeting in order to minimize the negative impact on the environment. The Council will promote environmentally responsible strategies through the collaborative efforts of meeting industry stakeholders, balancing economic, environmental, and community objectives. Your support is an integral component of our success.

GMIC Vision:
According to the Green Meeting Industry Council , a green meeting incorporates environmental considerations throughout all stages of the meeting in order to minimize the negative impact on the environment.

In conclusion, if you’re not doing so already, there’s lots of easy ways to start implementing sustainable practices in your meetings, tradeshows, and special events.  For example, event organizers can utilize eco-friendly name badge holders, and reducing printed promotional and on-site materials.  Additionally, organizers can request that their supplier partners utilize things like sustainable carpet at trade shows, recyclable trash liners, and that food service suppliers use water stations with the aforementioned eco-friendly plastic like cups, recycle, and compost.

It’s all good and helps the planet too. Take care and I welcome your thoughts, comments and ideas.