Your organisation runs an annual conference and exhibition. The attendance figures are steady and you are attracting on average between five and ten per cent of your calculated total universe. Exhibitor and sponsor numbers are holding up and revenue is on target.
So far so good
Two years ago you introduced a specialist pavilion for one of the sectors of the industry you serve. It’s been a huge success and now attracts 15% of your total audience and generates 20% of your sales. But there is a problem. The companies and visitors involved want their own event. They want to be the focus rather than a sideshow and they are getting very vocal about it.
What are you going to do?
- Stick to your guns, but pacify them by giving them a bit more space and a couple more sessions in the conference programme.
- Create a ‘mini’ co-located event.
- Grasp the opportunity and develop a second event.
- Nothing. Very happy with the status quo thank you very much.
Why would anyone answer yes to the last question?
One simple reason – they can’t get past the cannibalisation problem.
It seems like forever that this thorny old issue has been hanging around, with the publishing and events industries particularly sensitive. From whether a successful supplement should become a publication in its own right; to investment in websites and social media that would take readers away from the printed page; and currently whether or not a virtual conference or meeting space will reduce footfall at a live exhibition.
The main argument against developing a pluralist strategy is that it causes a reduction in revenue or perceived market share. But the truth is that when carefully planned and executed such a strategy can result in a larger share of an increased total market. Examples within the retail industry abound: when Coca Cola introduced Diet Coke, sales of Coke fell, but ultimately led to an expanded market for diet soft drinks. Forward thinking and successful FMCG companies positively embrace the idea as Apple CEO Tim Cook explains:
“iPad has cannibalised some Mac sales. The way that we view cannibalisation is that we prefer to do it to ourselves than let someone else do it. We don’t want to hold back one of our teams from doing the greatest thing, even if it takes some sales from another product area. Our high-order bid is, ‘We want to please customers and we want them buying Apple stuff.’”
Why then are B2B publishers and events organisers still struggling with the idea of creating virtual experiences in addition to their current physical and online activity?
Hybrid and standalone virtual conferences, training and meeting sessions may affect audiences but the truth is that they are likely to deliver more visitors, both from a wider geographic area and from a demographic that would normally be too time-poor to engage in a live event. Detractors suggest that viewers online are not as engaged; but neither is every visitor at a conference (particularly at 2pm).
The bigger question is not how many visitors or delegates you are going to lose from your live event, but how many people from your total market universe are you failing to connect with? Anecdotally we know that membership organisations attract on average 5% of their total membership to live events. In commercial event organisations, marketers need to hit a target universe seven or eight times in order to pursuade between five and 10 per cent of them to attend. Plus, if you only engage with this audience once a year you are putting up constant barriers to retaining and growing the audience and its levels of interaction, which in turn diminishes your opportunities to drive and grow your revenues and profit.
Tony Rossell from Marketing General, Inc. has done some excellent research on this subject in the context of Association Membership: his work shows that Associations which create multiple opportunities for engagement with their members, whether via annual meetings, professional development, webinars, social networking etc. are more likely to show increases in overall membership in both the long and the short term as well as an increase in new members and renewal rates.
It stands to reason that the more you engage with your audience, both exisiting and potential, then the more likely they are to engage with you. Hybrid events don’t have to reproduce your live event verbatim and virtual events don’t have to be restricted to specific times and dates dictated by venue contraints.
Where virtual events are concerned, it’s time to put the issue of audience cannibalisation to bed once and for all and embrace the concept of market colonisation instead.
Once upon a time, when hand to hand combat was the norm and eating vegetables a sign of poverty, people believed that there was no such thing as a black swan. That was until Cygnus atratus was discovered by the English naturalist John Latham in 1790.
In 2007 Nassim Nicholas Taleb published Black Swan - The Impact of the Highly Improbable in which he expounded his Black Swan Theory on how random events are much more common than we think, have huge impact, are impossible to predict and yet we spend huge amounts of time (which could be better spent) trying to rationalise them.
It is this process of attempted rationalisation that is most damaging. Drowning in an overflowing and ever increasing sea of information and data, individuals and organisations spend so much time trying to second-guess what might happen and what the affects might be that they become glued to the past and present rather than being able to adapt and deal with the future.
Taleb advocates “stochastic tinkering” as a method of scientific discovery rather than research which is dictated by top down thinking. This non-determinist approach fits well with the virtual business solution. Starting with a question, which might not be the correct one, the participants in a virtual event or virtual communication space can use provided content and information to begin their own collaborative process, where randomisation can be embraced and included in the process without the fear that this will result in a poor (or the predicted ‘wrong’) outcome.