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April 4, 2008

Rory Sloan: Taking care of business

It’s important as agencies that we look at how the outside world influences our industry and our business. It is quite obvious that the financial sector is in for a shaky time over the next 12 months and there is likely to be some tightening of budgets. While we don’t work regularly with this sector directly, a lot of our suppliers do. So we need to keep a careful eye on not just our own business, but also those of our suppliers.

In terms of delivering the events and experiences we’ve planned, we are heavily reliant on our suppliers, so we need to be certain that we are not going to be let down and that our suppliers are in a safe a stable place. Having a supplier pull out at the last minute for whatever reason can be extremely damaging and it has certainly been known to happen in this industry.

Up close and personal

The key to avoiding getting your fingers burnt lies in knowing your suppliers and having a frank and open relationship with them. The closer the relationship, the more of a feel you can get for how things are going. It tends to be that management and staff get stretched before something bad happens, so the indicators are there if you look for them. Often agencies are guilty of using too many suppliers, and this scatter-gun approach makes it difficult for teams to have day-to-day contact with them.

The personal element, gained by such regular contact, is essential as it allows agencies to spot any potential business troubles early; looking at things such as whether deliveries are turning up on time or whether people are answering emails promptly can be a good business barometer. While this may seems pretty straightforward, it’s easy to over look these things in the heat of the planning process.

Although this is undoubtedly a problem across the board for all suppliers, AV companies can be particularly vulnerable to fluctuations in the market as they have to hold a lot of very expensive stock, and this can become a financial burden if it’s not going out the door. They also tend to be used heavily within the financial sector for high-profile presentations.

Seasonal fare

The reality is that when you’re working with events it can be very seasonal, with peaks around summer and Christmas, so everyone has to be set up to deal with this – a lot of suppliers to the sector use freelance staff and so are much more fluid and adaptable. The AV sector doesn’t necessarily have this seasonal fluctuation as they have more year-round application, which in some ways also makes them less flexible.

So far this makes it sound as though I’m laying responsibility squarely at the door of suppliers, but we also have duty to look after them. Agreeing tight terms for payment and then sticking to them, is one of the most obvious things we can do. We need to work with these people not against them so we need to be as consistent as possible. We need to understand that there are very likely to be budget cuts, but by working with our suppliers to understand the pressures they are under, we can understanding their issues and challenges and look at how can we address them.

Of course, if it all does go wrong, there are always people who are keen for the business and can make amazing things happen in a very short space of time. But really we want to be avoiding that option if at all possible.

Traditionally, our sector has done well in turbulent times as it is relatively easy to research and justify the return on investment. Hopefully this ability to weather the storm will continue. Certainly the recent Bellwether report suggests that people are still investing in event marketing. However, this will be a challenging time for us all and we need to think about what’s happening on a wider scale and make sure we don’t get burned fingers.

Rory Sloan is head of production for experiential agency RPM

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