Picture this: You are the director of event services for Venue XYZ. A customer booked space at your facility a few months ago for a 2,000 person event to be held in just a couple of weeks. However, you still haven’t received a few critical bits of event information from them. The menu keeps changing. They just called and said they will need another projector, possibly two. So, as usual, you’re starting to sweat the staff and resources you’ve allocated for this event? Will it be enough? Too much?
You know that if you don’t have the right details, you will probably either over-staff the event – which will cost more to your venue – or you will under-staff the event or lack resources – which will lead to a less than desirable customer experience for both the direct customer and attendees.
Is the familiarity making you tense? You know that not having the right details at an early enough time will cost you.
There is true value for venue event managers in receiving information in a timely manner.
The “time value of money” principle states that a certain amount of money today has a different value than the same money in the future. A similar principle applies to the information venue event managers receive. Here are some assumptions we can make:
- The later we get event information, the less accurate and “thought out” the event plan will be.
- People tend to plan the unknown or variable items last (labor, consumable goods, etc.), which also happen to be the highest cost/lowest margin items.
- Without event information, we will over-plan or under-plan.
Over-planning equals increased cost to the facility: payment for unnecessary manpower, resources that were allocated inappropriately, and so on.
Under-planning equals decreased customer satisfaction and loss of customer loyalty. With that, there is often a decrease in revenue or profit as a result. The decrease in revenue can either come from loss of a returning customer, or a loss of future opportunities if that customer shares their bad experience with other prospects. Or, as a result of under-planning, your profit margin can suffer if you have to give discounts for things that didn’t go right.
Worst case scenario: you over-planned one resource and under-planned another, so now you have both increased costs and you have to give discounts! It gets unprofitable fast.
So, what can you do to account for the time value of information? Here are two things to consider:
Motivate event organizers to provide you with information earlier.
Sticking with the time and money connection, perhaps consider time-based pricing. For instance, if you incentivize event organizers to provide information early with discounts, you will get information earlier and develop a more accurate plan (barring any unforeseen issues). If you deter organizers from providing information late with higher fees, you will either successfully motivate them to give you information earlier or cover the aforementioned costs from receiving late information.
Make sure you have the right tools in place to manage your information.
A few months ago, I posted a LinkedIn survey to a group of venue managers, asking them if they currently utilize a time-based price structure that motivates organizers to provide event information and resource needs earlier versus later. Over half of the respondents do not. Why?
Most people say they have a single price structure because they have a hard enough time getting their price structure accurate in the first place without adding the complexity of a time-based price structure. If you don’t have the tools in place to manage your price structure to begin with, it’s impossible to incentivize!
It helps tremendously to have a system in place that manages your venue’s event information – from rental space to catering to equipment rental – in a timely fashion. A system that gives you visibility across multiple events, which allows you to plan your high cost items across multiple events (setup, labor, etc.).
For instance, if you need three people to handle setup for one event and three people to handle setup for another event, but if you have them at the same time you only need four people to do the same work, you can reduce your labor cost.