e4 Blog » The Economy

Does Remarkable Customer Service Drive Economic Recovery?

Michael M McCurry, CMP — Mon, 26 Oct 2009 13:00:00 +0000

Depending on who you talk to, or which news channel you are following, there is chatter that our country is emerging from the recession… I wonder which dial or meter validates this magical news!!?? Reality is you can’t flip a switch and announce our world is no longer in economic turmoil. There are still plenty of signs we are not out of the danger zone.

While our Government claims the “recession is over” and the DOW is back above 10,000, that is only the tip of the iceberg. In our business, the Meetings & Events world, the outlook is still difficult at best. Across our industry hotels, associations, suppliers and other businesses are feeling the pain in a multitude of ways.

Sadly, in an era where “existing” customer relationships are more important than ever, budget cuts and service cutbacks occur all too frequently. The historical survival strategy in a down economy has been for businesses to reduce fees, cut expenses, simplify or eliminate non-core services and reduce staff. Ironically, this tactic may be “biting the hand that feeds them” … that of their existing customers.

It is questionable whether the above strategy has ever been optimal, but in our present situation it certainly isn’t. Here are a couple of relevant discussions I found in my “blog surfing” addressing this issue:

The Price of a Poor Experience — Peter Bregman, Blogger for Harvard Business writes about the relationship between membership loyalty, pricing and service experience in the context of “non-profit” associations. His reference point is a consulting firm, called Measuring Success, which helps non-profits make decisions based on quantitative data. This firm collected data across hundreds of organizations and noticed something surprising about their successes and challenges in this economic downturn:

“First, what they didn’t find: there was no correlation between membership and price increases. In other words, customers didn’t leave simply because an organization raised its prices.

But they did find a different correlation: between membership and an organization’s net promoter score, which measures how likely a customer is to recommend the organization to a friend. It turns out that if customers liked an organization’s products or services enough to recommend them to others, then that organization could raise its prices, even in a down economy, without losing any of its customers. But if the organization downgraded the customer’s experience, then not even lower prices would prevent customers from abandoning it.”

Toxic Hospitality Marketing Strategies — Madigan Pratt, in his blog article focusing on counterproductive hotel trends and strategies asserts the following:

“What happens in a hotel cycle [during a recession] is always exactly the same. Revenue dissipates, occupancies go down, hoteliers then sacrifice rates, discounting to boost occupancy. As they discount rates, they also decrease services and they cut back on every item of expense. Rates continue to fall as occupancy rises.” [Bloomberg Report]

Referencing Bregman (above) Pratt continues with these statements, “In the highly competitive hotel industry, people may be looking to pay less today but still expect to receive good value. Cutting rates while diminishing the guest experience will decrease a hotel’s “net promoter score” and brand value, which makes it more difficult to recover when the recession subsides.”

All year we have been hearing about the “new normal” in business; that things are going to be different “post-recession.” Businesses are going to be more prudent about when and how they spend their financial resources. As a natural by-product of their increased diligence, customer loyalty will shift to those organizations delivering the best customer service at a competitive fee.

So, in my mind’s eye (and many others) if I manage a hotel, or a service-providing business, I would be focusing on finding ways to deliver enhanced value to my customers at a moderate price point. If I am an association or meetings professional, I would be brainstorming with my team to develop new services driving membership/attendee satisfaction (and therefore retention.)

In a highly competitive business climate customers have higher expectations. If your organization does not deliver, they will look elsewhere and likely find what they need from someone else!

Question — Where does your company/organization fall on the service spectrum? Are you delivering (positively) memorable customer service experiences to your clients, or are you just getting by with reduced resources? What are you doing to distinguish yourself from your competition?

Let the conversation continue!

“Truly Measuring Meeting ROI – Is it NOW or Never?”

Rick Binford — Fri, 23 Oct 2009 16:23:17 +0000

Seems hard to believe that it has now been more than a full year since our industry first began to see meetings cancel and meeting attendance shrink -and what a year it has been!

All across our industry, we have scrambled to adapt as quickly as possible “a new normal” of fewer events, fewer attendees, slashed budgets, and a heightened level of scrutiny in regards to each and every event-related decision. And while many event stakeholders are holding firm to the premise that history will in fact, repeat itself, and the business will eventually rebound, I for one, wonder just what portion of our event business may in fact be gone forever?

Many of us believe whole heartedly, that in fact there is nothing that can truly replace the value of the face-to-face interaction and learning experiences that are core to most meetings and events. Just how well are we, as true meeting professionals, standing up to the charge of our C-level stakeholders in effectively measuring the unique return-on-investment (ROI) associated with the very meetings and events we believe so strongly in, and are fighting so dearly to protect for the future?

While there has been a substantial effort in recent years in building reasonable methodologies and a body of knowledge around the concepts of “ROI”, how are we really taking this to the street? While there has been much lip service to ROI as a “must have” capability as it pertains to expanding science of meeting and event management, I am curious as to just how deep our commitment is to accurately measure the true ROI of our event expenditures? What types of investments, both financial and intellectual, are individuals and organizations making to this effort and what are the obstacles to integrating ROI measurement into our event management process just as a consistently as we have implemented other types of best practices?

It seems to me that there has never been a more important time to truly go beyond dialogue about ROI and start putting the numbers on paper. What do YOU think?

ASAE 2009 — A Virtual View From the Cheap Seats!

Michael M McCurry, CMP — Wed, 19 Aug 2009 16:52:48 +0000

This week I attended the ASAE Annual Meeting in Toronto, but the cool thing is I didn’t have to fly there. I was a virtual participant!

While I obviously was not able to experience the normal networking and social opportunities that go along with physically attending a conference I was able to at least experience a significant portion of the educational content. Utilizing a live Twitter stream, marked by Hashtag #ASAE09, I attended three General Sessions (Sunday, Monday and Tuesday) following the tweets posted by virtual and live attendees. It was a very positive and interactive experience! Sunday’s opening session featured Gary Hamel, and was outstanding, and I wrote a blog article recapping it from the tweets that were posted.

To their credit ASAE made a significant effort to embrace and utilize social media tools to enhance the quality of this conference. On Friday I posted an article on my personal blog (McCurry’s corner) outlining all the innovations introduced at the 2009 ASAE meeting. To view that article please click here.

Sadly, one major component was missing from the ASAE conference, a live webcast of their general sessions. In my opinion this adds a blemish to what could have been characterized as a “technology homerum” for ASAE. During the conference I posted a Twit Poll asking attendees if they felt ASAE should have offered these sessions in a webcast. Unanimously, all respondents answered “yes.”

The only session offering a webcast was one led by Jeff De Cagna (Twitter handle @pinnovation) entitled “Associations Next: Serious Questions for 2010 and Beyond.” Jeff actually webcast his session independently of ASAE, using a personal video camera. To view an archive of this session click here. The quality of the video is so-so, but the quality of the content is top notch. In addition Jeff did a really nice job of connecting with the virtual audience! One tip — when you open the video please fast forward by fifteen minutes to avoid some tech issues at the beginning. From that point it is excellent!

It is really exciting to see the meetings and events industry demonstrate innovation and adaptivity to new ways of doing business. Congratulations to ASAE for leading the pack with their 2009 Annual Meeting! Not only did they serve their live & virtual attendees well, but they showed thought leadership and a commitment to the future of the industry as a whole!

This situation is a classic example of great customer service! Many ASAE members/non-members were not able to attend ASAE in Toronto, but due to the innovations deployed by ASAE at this event, they were able to virtually connect with attendees and enjoy “cliff notes” of the education content. I know, from my perspective, experiencing all this motivates me to find a way to attend the event live next time around. I am gonna start saving my money now!

If you were a virtual or live attendee at the ASAE 2009 Annual Meeting how do you view the experience? What did they do well and what could be done better? If you did attend virtually does this experience spike your interest/desire to attend next year’s meeting live? Please share your thoughts with us?

We Are The Faces of the Meetings Industry

Debbi Beldon, CMP — Tue, 11 Aug 2009 13:00:12 +0000

Just got back from e4 – what a terrific time we had networking with clients, partners and colleagues. I learned a lot too. For instance, I learned that people really will follow me on Twitter, even though I’m not exactly sure why yet. I learned that I need more than five hours sleep a night and apparently that I get cranky if 45 minutes goes by without eating something. I also learned that it is unwise to drink an entire Diet Coke if the session is going to be 90 minutes long and the bathroom is a mile and a half away.

But seriously, I also had the pleasure of attending the closing general session where we learned from Roger Dow, President and CEO of the US Travel Association about what’s going on with the events industry.

Roger shared a number of interesting facts with us, such as:

1 in 8 jobs in the United States are related to travel and tourism
Meetings and events contribute $101 BILLION in spending in the United States
A survey of Chief Marketing Officers indicated that meetings offer the highest Return on Investment of any marketing channel
Roger Dow

With facts like that, it is shocking to me that our industry is facing such scrutiny. How can people, including our own government not understand how valuable our industry is to the economy of our country? According to Roger, part of the issue is us. He says that “we can no longer afford to play to not get hurt; we have to play to win.” The meetings business is America’s Industry – travel and tourism plays a role in every state.

Paco Saldaña

I was moved by the story of Paco Saldaña. Saldaña, director of guest services at the Ritz-Carlton, Amelia Island, Fla., was chosen by thousands of his peers to be the new ‘Face of Travel.’ More than 16,000 people participated in the Faces of Travel contest creating and voting on hundreds of videos submitted from around the country. Paco Saldaña was selected as the industry spokesperson that embodies the vitality of travel and the importance of increasing travel to and within the United States. Unfortunately, when business meetings and events are cancelled, its people like Saldaña – not corporate CEOs – who pay the highest price.

We must speak out to change the perception of our business. Perception does not pay the electric bill, or feed our families. We are all the “Face of Travel”. So put a “face” on our industry – write letters to elected officials, post articles about the meetings industry on your Facebook page, Linked In, and Twitter. Tell your family, friends and everyone you meet what you do and how important it is to our country and our economy.

“What lies behind us and what lies ahead of us are tiny matters compared to what lives within us.” – Henry David Thoreau

State of the Industry

David Gauthreaux, Freeman — Wed, 01 Jul 2009 11:00:42 +0000

How many times have you read or watched news shows about the economy in the last several months? If you Google economic conditions in the United States you will get more than 37 million hits.

The reason I talk about this is that the Exhibition Industry is not immune to the economic restraints we are experiencing. In 2008, the Industry was down significantly for the first time since 2003. Even though we face a unique set of challenges that could greatly affect recovery, we continue to see that companies still value the face-to-face marketing strategies.

That’s because face-to-face is core to human relationships. Why do you think people flock to the Super Bowl, inaugurations, concerts, etc.? When people meet face-to-face, trust is established, ideas are exchanged, business occurs, relationships are built, and so on. Think of the great events in history – would Martin Luther King’s speech have been as effective if he had given it over the radio instead of in front of thousands of people? Even though we can access information through the internet, TV, radio, etc. – we still thrive on the live experience.

When I sit down with a potential client, speak to an audience or just spend time with people I’ll be working with in the future, it builds a relationship that lasts and creates a bond that enables far greater communication.

Although we have this need for face-to-face interaction, we know that the industry is ever changing. Two of the most prominent challenges we face are: 1) the role/importance of live events to young professionals and the next generation of workers; and 2) the impact of the Internet and virtual events.

We live in an online digitized world, which young professionals and next generation of workers are very familiar with. This world, where most communication is done online, is how these young professionals communicate on a daily basis. Knowing and understanding this is a helpful step in changing the way we do business that incorporates both worlds.

Change can be a scary thing. But overall – change is good. If we don’t change with the industry we will get left behind. We all know that the ultimate goal of customers is to spend less, increase revenue and still promote products. The exhibition and event community is here to help companies successfully attain these goals.

Long-term growth for the exhibition industry is promising, but even though the industry has rebounded strongly after previous recessions, there is no guarantee the recovery will be the same this time around. Continuing to change and being flexible to the ever changing economy will make us an even stronger Industry.