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January 16, 2009

CONFERENCE CRUNCH:Will internal meetings and events feel the full force of corporate cost cutting?

In the current climate, can companies still invest in their internal meetings and events programmes without potentially incurring the wrath of their staff, stakeholders and customers – not to mention the basic factor of affordability? Ian Whiteling looks at the likelihood of conferences falling off the corporate agenda.

In the past, the slightest sniff of recession has resulted in marketing budgets being slashed. However, at a time when competition is particularly keen, and therefore the need to stand out in the marketplace more important than ever, this move is being seen as somewhat short-sighted – at least for the moment.

But what about internal communications – essentially marketing to your workforce – of which meetings, conferences and other corporate events play a key role? Certainly tough trading conditions mean that brands and companies will have to be careful where they invest their money. So will internal events now fall off the agenda?

Managing change
Recent research by interactive events technology experts Crystal Interactive indicates that 60% of human resources (HR) and communications personnel at major UK businesses believe that the ability to manage change provides companies with a competitive advantage in the marketplace. And in the current economic turbulence, businesses need to review the way they operate and act accordingly. This makes their ability to manage this change paramount, and one of the most effective ways of achieving this is through internal events, so it would also seem short-sighted to slash budgets in this area.

More importantly, Crystal Interactive’s research also reveals that around a third of companies are not good at managing change within the business, which means that perhaps more money needs to be invested in effective internal events, rather than less.

Apart from facilitating better change management, internal meetings and conferences can also strengthen brand values and improve performance through training and motivation. All of which help to deliver a better service and closer customer communications – both key elements in the fight for market share.

Panic over logic

Although this seems to make perfect sense in theory, the question is, as we fall deeper into recession, will panic overtake logic?

Crystal Interactive managing director Chris Elmitt is hopeful.

“It’s the brands that already enjoy a gold standard reputation that maintain clients’ trust during the lean times, because they can be depended upon not to skimp on service delivery as a means of cutting their own costs,” he explains.

“Nowadays, there is widespread recognition that internal communication is just as valid (if not more so) than money spent on external marketing events. The key is to make every moment count and to guard against conspicuous consumption, which can have the twin effect of making both staff and stakeholders think that a company is being irresponsible with its money.”

The last of the big spenders

So does this mean that those companies spending vast sums on internal events are going to have to cut back?

“The short answer to this is ‘no’, not if you can show that you are getting more out than you are putting in,” says Rupert Fitzmaurice, partner at events company Involve. “It is important to demonstrate how any spend is impacting on an organisation's ability to perform better. If you are involving your people, and generating both commitment and understanding about how they can better meet the needs of your customers and consumers, then it is easy to justify.”

However, Fitzmaurice says that the days of lavish sets and well-paid celebrity speakers are over as organisations reflect on what they are trying to achieve.

“Money should be spent on events where there are tangible outcomes and not peripheral niceties," he says. "Bigger sets and brighter lights have never helped support the bottom line and they are not about to do it now.”

Amanda Stranack, director of Event Services at booking and events agency Inntel, agrees, adding: “Those companies that have measured return on training activities in the past, will already have an understanding of how best to utilise their budget in order to achieve this. Focus on concise messaging with exciting content, and a day-long meeting can be just as stimulating and motivational as a five-star gala dinner.”

Under the knife
Last year was pretty good for the events industry overall, despite the downturn, but the first signs of what 2009 may hold was the dramatic cut in corporate Christmas parties. So which areas do experts think will be hit next?

“The big, brash parties and lavish incentive trips will be the hardest hit by the wave of opinion in the country,” says Robin Carlisle, managing director of Mobile Promotions. “Celebrations of trading successes in the banking world were one of the first types of events to be hit, and this is being fed through the food chain to business of all types. Many companies are still trading effectively, but they can't be seen to be celebrating this.”

As Stranack points out: “You can’t take your sales team to the Caribbean when you are making operational staff redundant.”

Function and value
Ultimately, all companies face a dilemma when it comes to expenditure at the moment and internal events are no exception. Businesses, therefore, need to make sure that the events they hold are appropriate, have specific objectives and that the benefits can be measured. The industry, meanwhile, should concern itself with proving the return on investment (ROI) that its events generate, as well as working more closely with clients to help them save money and deliver more value in other areas, such as service and advice. More creativity can also help.

“By refocusing on delivering specific messages and ROI, companies can still invest wisely in internal events,” says Carlisle. “We held our own internal event recently in aid of Children In Need, where each of our employees did a job swap to give them all a perspective about what other people in the country did. We raised money for the charity in the process, and it got people talking more than most teambuilding events would.”

Ways to save
There are also some practical ways to get more from your internal events budget.

“Reduce the length – obviously if you can halve a two-day event you immediately save on the cost of dinner and overnight accommodation,” advises Crystal Interactive’s Elmitt. “With careful content planning, including reducing the length of speeches, and incorporating multiple break-out sessions, organisations can gather and share intelligence, raise issues and identify solutions in just a few hours. And the delegates will enjoy a much more collaborative experience into the bargain.

“Much marketing activity applies a scattergun approach with an inexact and unpredictable rate of success,” he continues. “In the last few months, I have seen lonely individuals manning stands at public conferences and exhibitions hoping that someone might be interested in their product. I hope that the leaders of those organisations at least considered whether that money might ultimately have been better used in supporting and cultivating the organisation’s own frontline ambassadors.”

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