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A virtual press conference from Sound & Video Contractor

Addressing today’s economic environment!

With industry (Tradeshow and Event Services) revenues down thirty (30%) to fifty (50%) percent, real unemployment closer to twenty (20%) percent (BLS rate (10%) PLUS short-term and long-term “discouraged workers?), and GDP down four (4%) percent, it’s extremely important to consider how one’s organization is going to adjust and overcome these issues.

Unfortunately, the talk of coming out of the recession is still just an emotional response. Capital investment and lending (aka GROWTH) have come to a near standstill. Instead companies (aka clients) are still contracting; shrinking sales, layoffs, budget cuts, etc. New product development (and “introduction?) has also slowed dramatically (lack of capital investment) or is being “stretched? over longer periods with fewer products coming to market. Sales and marketing budgets are also being trimmed. The emotional influence driving these actions/decisions is FEAR.

What does this really mean?

Most business decisions are based on a risk/reward analysis, whether researched and analyzed by the finance department or just in one’s head. With the overall forecast being pretty gloomy, or the reward side of the equation somewhat dim, it shouldn’t be surprising that the risk side of the equation may respond in fear based decisions.

Alright, enough with the psycho-babble; in English this means that companies (aka clients/customers) may chose to stretch their sales and marketing costs across smaller, more frequent “investments?; in other words, spread their risk. Whether or not it produces the desired ROI isn’t weighed into the equation as much.

Some considerations:
1. Event (tradeshow) expenses usually appear as a single entry on the consolidated income statements, or the statements the decision markers review.
2. These entries appear very LARGE in comparison to other sales and marketing expenses (aka percent of expense).
3. Versus other forms of sales and marketing, the cost per “touch? or “reach? is fairly high (aka ROI).
4. We (the industry) understand the closure rates (sales & ROI) can be very high with the products and services we provide.
5. But, unfortunately this isn’t connecting well with the gloomy economic outlook or fear.
6. In other words, the value exchange HAS been affected.

With regards to “taking care of your own? events, the current political environment does not look kindly on these events. Organizations (clients) realize there is significantly greater risk associated with these types of events.

Social events follow the same trend; economic concerns affect one’s personal environment, maybe even a greater impact. Also, please be careful not to interpret “noise? (aka interest) with actual business.

Solutions:
1. Understand and respond to the shrinking; don’t act like it doesn’t exist. In other words, rethink your business model and adjust to the current economic environment.
2. Discover or rediscover your place in the marketplace (“niche?) and sell-out to that position – be the “go-to? solution. Because you had this position in the past doesn’t mean it still exists. Unfortunately, some “niches? are just going away.
3. Rethink / re-identify your CUSTOMER on a cost basis.
4. Address your SUPPLY CHAIN (internal and external) – your product offering.
5. Breakdown your business into parts, tighten expenses on a segment (of the business) basis, and maximize productivity.
6. Think outside the box.

In this environment, we have to work smarter not just harder.

Bo Klune
Klune & Company, LLC
404.803.9892
bo@klunecompany.com
www.klunecompany.com

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