Without Collaborating, Producers Can Find Budgets and ROI a Risky Business

The cheapest route is rarely the best route, though it might seem, at first glance, the most compelling. If you are producing an event, taking the least expensive approach will rarely achieve the results you want, or the return on investment (ROI) that clients demand.

I think John Ruskin, the 19th century English art critic, had it right when he wrote, “It's unwise to pay too much, but it's worse to pay too little. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better.”

Faced with the struggle of building a realistic stage budget, Ruskin's insight is worth recalling, but it's only part of the equation. The overall solution is to treat your vendor and your client as if they were partners.

Partner With Your Staging Vendor

If you think the best way to get a sound ROI is to call around looking for the cheapest staging company, think again. Since the first producer rolled out a slide projector and a microphone, producers have been concerned about costs. There's nothing wrong with this, unless it becomes a producer's sole concern. Focusing too narrowly on costs has actually driven some staging companies out of the industry because they don't understand their indirect operating costs, and it has also ruined numerous business relationships. Indeed, the belief among some producers that the way to make a profit on a show is by finding the cheapest staging vendor is risky and, ultimately, ill-founded.

The adage “do it right the first time” applies. If you find the cheapest labor and gear to rent, you'll have to set money aside for a contingency. Why not begin a project by partnering with a staging company you can trust, who will stand behind its gear and people, and give you good advice? Even if you pay more up front, you may end up paying less in the long run than if you have to pay out that contingency money.

A case in point is the way McDonald's founder Ray Kroc dealt with vendors. In his early years, when looking for a new supplier, he would choose a reputable company and tell it he would give it all his business. He went on to say he didn't expect it to be the cheapest or the most expensive. What he did demand was that its overall pricing be competitive, and its service extraordinary in return for his commitment. This kind of “partnering up” with vendors helped him grow a small Southern California start-up company into a worldwide giant.

If you plan on being successful in the staging and event industry, you have to partner up with the right staging vendor. That's a reality of the business. When it comes to gear, project management, and technical labor, I'm sure you'll agree the substandard vendors will drive up your preparation time, drive down your credibility, and erode your customer base.

You not only have to choose the right equipment, but as Kroc demonstrated, also choose the right labor — not the cheapest vendors, but the right vendors. These are the companies that deliver the right equipment and labor in the right amount of time. They stand behind their promises and understand your needs. Such vendors are out there, and they are priceless.

For a long time, the event and staging markets were a seller's market. The tables have turned given today's travel decline, the state of the event and meeting industry, postwar blues, and a second year of recession. According to Future Watch 2003, in a study done by MPI and American Express, “meeting suppliers are predicating a 5.8% increase in budget spending in 2003 vs. 2002, while meeting planners are projecting a 1.7% decrease.”

This further exerts pressure on event and meeting vendors to provide products and services at lower prices by fostering more competition and continuing the swing to a buyer's market. Staging and A/V rental vendors must bear a larger burden by proving the value of their offerings and absorbing more of the economic risk.

Partner With Your Client

How do you stage a first-class event with drastically cut budgets? It's your job to prove value and deliver results. Be realistic about cost and budgets, and partner with your client to build a budget together. The key to value and a sound ROI is strategic thinking. Before embarking on the first steps of planning, and right through the ROI process, objectively consider how your client perceives the staging vendor's role.

Strategic thinking in planning events entails designing and delivering audio and visual impacts that provide measurable, meaningful results — results that move your client and partner closer to his or her goals. The entire planning process must be linked to desired outcomes. This may seem obvious, but considering the multitude of tasks required to produce an effective event, it can get lost in the details.

To deliver value and demonstrate ROI, you have to broaden your preproduction planning cycle from a logistics-first approach to one that takes into account goals, objectives, and measurement. Some critical responsibilities of the staging vendor are to design, develop, and deliver innovative, engaging and effective events. To make this happen, you must consider not only the efficiencies of budget and time, but also the delivery of meaningful and measurable results for both client and audience.

Taking the following into account before going into production will help you deliver the most meaningful results:

  • Identify objectives and priorities. The main objective of any staged event is the quality of the impression the audience perceives. What are the specific objectives for this event?

  • Collaborate with your client on creative content before production. Since the client knows the audience best, ask for his or her ideas on how to make an outstanding impression.

  • Maximize A/V technology, but don't over-engineer a project. Make sure the audience isn't so focused on the “wow” that it misses the message.

  • Give the client choices before committing to a budget.

  • Build staging equipment configurations around the content's best format and medium.

We have all had clients who submit a very loose request for proposal (RFP) — one in which the only clear objective is meeting and beating prices — only to end up with a show with the wrong gear, under-qualified labor, no rehearsal, missed cues, cost overruns absorbed by the vendor, and a tarnished reputation.

Our ideal is the client who submits a clear, exact RFP specifying gear callouts, well-defined labor needs, preproduction planning cost allocations, site inspections, stated media content objectives, audience profiles, post-event evaluation surveys, and manageable timelines.

We'd all like to see RFPs like this all the time, but the only way we're going to get them consistently is to partner with our clients and help create them. The building blocks of any budget are services, quality, and price. If you want the cheapest cost, you can probably have any two of these, but not all three.

Do it Right the First Time

To summarize, an efficient staging budget roadmap should include:

  • Developing an A/V technology configuration that maximizes content format without being over-engineered;

  • Pre-planning for the venue;

  • Meeting audience expectations based on demographics and previous events;

  • Establishing measurable results criteria;

  • Advocating strong preproduction planning;

  • Managing needs for flawless project execution;

  • Including a post-event critique to establish ROI credibility.

Business relationships are the cornerstones of every great business. Make sure you partner with your vendors and your clients to maximize rate-of-return.

John Paul Brozyna is National Account Manager for AVHQ Show Solutions (www.avhqshowsolutions.com), a part of Audio Visual Services Corporation, based in Los Angeles. Brozyna is a member of ICIA's Staging and Rental Council and its Professional Education and Training Committee. The ICIA Field Report is penned each issue by members of the ICIA through its Editorial Alliance Program. For more information, email twalsh@infocomm.org.

Email him at jpbrozyna@avhq.com.