Posted by

Barry Siskind

Community Manager

One of the toughest jobs an organizer or association executive can tackle is predicting the future profitability of their conferences and exhibitions. I read an interesting article in MeetingsNet which focused on Hal Vandiver and his three metrics of success.

Vandiver was the executive vice president at the US based Material Handling Industry of America Association and is now a consultant and President of his company Vandiver and Associates.

As an association executive he was aware of the constant pressure to produce events with realistic expectations. What he discovered were three metrics that when used properly helped him predict with incredible accuracy the potential profitability of an event.

His thesis starts with a basic premise that exhibitors are investors in an event and the attendees are the consumers.

When you focus on exhibitors as investors you shift your understanding that the decision to participate in an event is based on forecasting that their investment will ultimately improve their company’s bottom line. Therefore according to Vandiver “the amount of money they have to invest is in direct relation to corporate profits.” More profits mean more investment. Corporate profits, according to Vandiver, are a good indication of what corporate spending will be in the next four fiscal quarters.

Attendee’s behaviour, which is the second metric,  is related to their level of confidence in the economy. Indexes like the US based Consumer Price Index are an excellent method of forecasting how the consumer will feel, and therefore spend, up to 6 – 12 months in advance.

The third metric is Gross Domestic Product (GDP). In Vandiver’s experience GDP will lead event performance by 12 months. So, if the GDP is beginning to decline the exhibition industry can look to a similar decline the following year.

According to Vandiver, when you take these three factors into consideration your ability to predict profitability increases significantly.

If you are interested in reading the article here is the link.

http://meetingsnet.com/trade-shows/how-you-can-predict-your-next-show-s-profit