20150714 13.45 Price versus value, subvention versus value added

Price vs. value, subvention vs. value-added

The Faculty Your Faculty

Natasha Joyner

Events Manager

WOF

Sonia Thomas

Director Operations

UFI

Handan Boyce

General Manager

Haliç CC

Paul Gruijthuijsen

Project Leader VGF

NBTC Holland Marketing

Marketing Budget

vs

Events Support Budget

The Money Cycle

Is it?

Flat Price Tag

“Competing on price

is the price you pay

for not knowing your

clients”

Dr. Andreas Hinterhuber

Hinterhuber & Partners

Searching for the added value

World Obesity – Pricing vs Value

ICCA Research, Sales & Marketing Programme Twitter: #RSMP15

International Congress on Obesity (ICO)

• takes place every other year

• required to make a substantial profit to sustain the association in non-congress years.

• On a fixed rotation

World Obesity have small events that are required to cover organisational costs and make a small profit.

World Obesity Events


• Cover core costs associated with the congress

• Added value for attendees

- Discounted city travel for delegates

- Reception for sponsors

- Welcome reception

- Marketing materials of the destination

- Cultural entertainment

ICO – Subvention Uses


• CVB’s all operate very differently

• Often requirements are required from World Obesity depending on the subvention ‘rules’

• Subvention funds are not always guaranteed

How do these work in practice?


Subventions to further the strategic goals of World Obesity

• Ensure that World Obesity remains financially viable

• Enables people to understand and support what we do

• Big move from cash subventions to an emphasis on legacy

Biggest focus will be how do we measure this?

Looking forward

UFI – Importance of pricing


• UFI applies different pricing structures depending on the event

– The CEO Summit: 2 000 euro pp

• Ensures CEOs only attend

• Produces feeling of exclusiveness

• Service must follow, at all levels

• Programme must be intensive and perception of value high

– The UFI Congress: 1 000 euro pp

• Shorter programme but more attendees

• Main UFI event with 450 – 500 delegates and accompanying persons (& dedicated social programme)

UFI: Importance of pricing


• UFI Open Seminars

– « Cheaper » events: 600 – 800 euro pp

• More relaxed atmosphere

• Less expensive hotel(s) and less sophisticated catering arrangements

• Middle management

• All UFI events must make, at least, a small profit. For the Congress and the GCS, a larger profit is needed.

UFI: Importance of pricing


• The worth of something compared to the price paid or asked for it

• The material or monetary worth of something

• Different perceptions of value depending on the individual, country of origin etc.

• Overall experience is very important e.g. boat tour

Value:

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http://www.oxforddictionaries.com/definition/english/material#material__13

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• Hotels can prove challenging

– Hotel booking websites cheaper than negotiated rates

– Booking conditions can be very strict (and expose association to financial risk)

– Help is needed with negotiating with hoteliers

Extra value:


• Subventions can help, but will not be a decisive factor

– More interesting sometimes are incentives such as free public transport for all delegates

– Hate to have hidden costs and nasty surprises

– WIFI and AV costs, for example, can be very high

– Services that are paid for must be efficient

– Discounts can be useful, but must not compromise quality of service

Subventions/incentives:


• Discounts have become very much part of our culture

– We all like to think that we paid the « best » rate

– But discounting is in fact very opaque, often a case of perception as opposed to real reductions

• Prepared to pay for certain products/services. Think smartphones, concerts, beauty parlours…

Discounts:

Pre-financing & Guarantee Fund - VGF


• Founded 1986 by:

– Netherlands Board of Tourism & Conventions (NBTC)

– Dutch Ministry of Economic Affairs

– Dutch congress industry association &

– 20 industry members

• 2001 independent Foundation

– 1 director, 5 board members & 1 project leader

History VGF


• To encourage organisers of international multiple-day (scientific) conferences to come to the Netherlands

• Realise objective by reducing financial risks of organisers

Objective VGF


Two schemes:

1. Free of charge Pre-financing up to €90,000.-

2. Financial guarantee up to € 90,000.-

What does VGF offer


• Free of charge and interest-free loan to finance initial costs of conference

• Height of amount depends on congress size, budget size and liquidity prognoses

• Reimbursement of loan prior to start of the conference

Pre-financing scheme


• Possibility to cover possible losses due to disappointing numbers of attendees

• Costs are 2,5% (max. € 2,250.-) of the guarantee amount provided by VGF

• Height of amount depends on size of the conference, history, presence of sponsoring and the conference budget

Guarantee scheme


• VGF is set up for organisers of multiple-day international (scientific) conferences in the Netherlands.

• The budget and organisation must be done by a party that has verifiable expertise in organising international, several-day conferences.

• The application must be done 8 months prior to the conference.

• Both Dutch as International organisers can apply

Terms & Conditions VGF


• Online via

www.vgfholland.nl

• Or via [email protected]

How to apply

http://vgfholland.nl/en

mailto:[email protected]

PRICE-VALUE-SUBVENTIONS

VENUE PERSPECTIVE


CHALLENGES:

• STRONG COMPETITION ALL OVER THE WORLD

• PRESSURED TO BE PROFITABLE BUT ALSO FLEXIBLE

• INCREASING ROI EXPECTATION

OPPORTUNITIES:

• COMPETITIVE ADVANTAGES

• BE RESPONSIVE TO NEW INDUSTRY / CLIENT CHALLENGES

CHALLENGES AND OPPORTUNITIES FOR VENUES


PRICES VS VALUE


• RESEARCH, COMMUNICATION • EXCELLENT RELATIONSHIP, BUILDING TRUST, REPUTATION • DELIVER WHAT’S PROMISED, ENHANCE EVENT EXPERIENCE • USE YOUR KNOWLEDGE AND EXPERTISE & BE THE PARTNER FOR A

MEMORABLE EXPERIENCE • VALUE ADDED COMPETITIVE PACKAGE • A COMPREHENSIVE CITY WIDE APPROACH : AN OVERALL VALUE

PROPOSITION

VALUE PERSPECTIVE


SUBVENTIONS TO;

• ENABLE CITIES AND DESTINATIONS TO BE COMPETITIVE WITHIN THE INTERNATIONAL CONFERENCE MARKET

• ATTRACT HIGH YIELD INTERNATIONAL CONFERENCES IN TARGETED AREAS OF EXPERTISE

• SUPPORT THE CITY’S MARKETING, REGAIN THE IMAGE , ENHANCE CITY REFERENCE

TO BE CONSIDERED;

• OVERALL IMPACT OF THE MEETING

• POTENTIAL TARGET SECTORS AND FUTURE EVENTS SHOWING INCREASED ATTENDANCE AND GROWTH

SUBVENTIONS


SUBVENTIONS

"DON'T BE AFRAID TO GIVE UP THE GOOD TO GO FOR THE GREAT." JOHN D. ROCKEFELLER

The Faculty Q & A

Natasha Joyner

Events Manager

WOF

Sonia Thomas

Director Operations

UFI

Handan Boyce

General Manager

Haliç CC

Paul Gruijthuijsen

Project Leader VGF


The Faculty Thank you!

Natasha Joyner

Events Manager

WOF

Sonia Thomas

Director Operations

UFI

Handan Boyce

General Manager

Haliç CC

Paul Gruijthuijsen

Project Leader VGF


Education

20150714 13.45 Price versus value, subvention versus value added