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Mice Asia Net : October 2008
backstage Ronnie Lim, President south east asia, staging ConneCtions grouP price strategies on the rise Ronnie Lim says price strategy is becoming increasingly important in the business events industry. In Asia, events are riding the economic boom as businesses continue to use this impactful medium to connect with their customers. But in order to remain relevant, event agencies need to move with the times in terms of pricing: to evolve or face extinction! There is a lot more transparency in terms of events than ever before. We established our event agency in 1992, when the events industry here in Singapore was still in its infancy. Back then we spent a lot of time educating clients about the services we provided. Now, clients are much more savvy. This, coupled with procurement, has opened up new challenges and opportunities. Today, there are a lot more processes in place to ensure that when businesses are contemplating events and procuring event services that they are acting within their corporate governance guidelines. We are dealing more with procurement departments, particularly with large global businesses. Procurement’s objectives and worldview can be in conflict with how events work. However, we understand the need for responsible buying, and we ourselves have set up our own procurement department to ensure that we procure best value for our clients. Clients are more sophisticated so there is a greater focus on return on investment and objectives. When a company is spending big bucks on an event and committing countless physical resources, everyone wants to make sure that the event delivers on its objectives. Audiences too are much more sophisticated. Consumers have countless entertainment options at their fingertips in their home and can generally access these at the highest HD picture-quality standards. An event has to stand up to and surpass those standards in order to engage an audience effectively and deliver an exciting and memorable experience. As the events industry continues to grow, so does competition. And it is in this competitive environment that the industry is witnessing greater pricing competition just to get the event with little structure in terms of price determination, resources utilisation, experience and importantly to ensure the right business outcome. What we have learned through years of experience in the region is that pricing right W ith the industry maturing, greater competition and an increasingly sophisticated client base, pricing right will play an increasingly important role. puts the industry directly in a position of either evolving or becoming extinct! Under-pricing puts a strain on resources which has a cyclical effect on your business. You price below cost to deliver the event so you need an increase in the volume of your work to compensate for this. In turn you are stretching resources, affecting attention to detail and leading to potential poor delivery. The downward cycle then leads to a lack of resources to invest in people who in turn burn-out or leave, and you will likely end up with an inexperienced team. The impact is a drop in product quality - poor event delivery and events that don’t meet ROO, making it harder than ever to price right as clients will cease to see value in outsourcing! This cycle repeats until extinction. Pricing for events involves finding the right balance. This allows event agencies to acquire the right mix of work at the right volume. It means that the event agency becomes an effective resource to clients; enabling event agency personnel to get to know the client and invest in the development of the client’s brand in order to value- add. In addition, it gives the agency the resources to invest back into the business, be it in training, process improvement or research. The ultimate outcome: client satisfaction and a re-enforced belief in the power of events. All of which is critical for the agency and the industry to evolve. For event agencies, it is important to find a pricing module that allows for re-investment for evolution so that the event agency can grow and continue to value add. Event agencies need to have clarity on the services they offer clients. Event planning, project management, risk management, event design, or experience design so that the client understands the value of what they are getting. They need to feel comfortable that they are dealing with an agency that will deliver on its promise and represent the brand to the highest standard. Event agencies need to continue to work with their clients to educate them, improve processes, and embrace greater transparency in the event procurement process. Ronnie Lim is a pioneer of the events industry in Asia. He established his business in Singapore in 1991 and for the past two years his company, Staging Connections TEC, has been voted Singapore’s #1 event agency in a survey of leading marketers. miceAsia.net 21