At this year's ACCED-I conference, several conference center directors spoke about their journey with evaluating and setting rates for their conference departments.
Following along from a recent post of ours on complete meeting packages, we asked one of the directors to share her story and tips as her department went through the process.
Suzanne Shaw with Yale Conference and Events (YC&E) is our guest blogger. She has shared the process YC&E recently went through to organize and re-evaluate their pricing structure for conferences and events.
Grab your cup of Joe and read on for her tips.
Are you looking to create a perfect pricing structure within your Conferences and Events Department?
Perhaps you are just getting started or are simply looking to revamp your current rate structure.
We all have various ways in which rates are created and maintained, different demographics, areas of responsibility and services offered. Not all departments are created equal and there are plenty of grey areas when it comes to business practices, especially in our non-cookie cutter industry.
Creating your perfect pricing stucture doesn't have to be a fairy tale.
Yale Conference & Events (YC&E) recently revamped their pricing structure and did it with much success.
If you are reading this, chances are you have started to wander down that path in the woods. But before you embark on creating your perfect pricing structure, consider taking these 2 EASY steps:
#1-Know the true value of your institutional space/services offered:
- Perform a full institutional space and asset inventory and services offerings.
- Find out what the local square footage real estate is worth in your area.
- Research what other schools, hotels, and similar businesses offer and how they price their services.
You might be surprised to learn what hidden gems may be right in front of you...then price accordingly - don’t be afraid!
#2-Ask the right questions!
- How does your department revenue and budget objectives effect your current rate structure?
- Are you a profit center? Or does your department provide support to your institution? Or both?
- What are your product lines or services that are for sale? Do you offer any waivers?
- Do you know your true costs - direct & indirect? Do you have a roadmap for any cost recovery strategies?
- Do you charge a management or administrative fee? If yes, is it a % or pp? And why? Do you charge a mark-up on internal services?
- Who are you currently serving? How can you capitalize on current clientele, lines of service or future collaborative opportunities?
- Who are your stakeholders and partners?
- What is your institution's/department's mission and vision? What are your department’s directives, if applicable? If you don’t know then ask!
Yale’s story - the short version:
To be blatantly honest, revamping our pricing structure was a painful process which took a few years to perfect. To all who can relate, it was like falling down multiple rabbit holes all at once.
During a change in leadership, we kept peeling back layers of the onion as we asked the questions listed above. We were forced to reflect and ask “why this and why that.”
YC&E is a self-supporting entrepreneurial profit center which currently does not receive any university funding. Our department has a directive from the Office of the Provost to produce a net dollar amount which rises substantially from year to year.
To meet it, we knew we had to dig deep and do more, but in a smart strategic way. It all had to start and end with a solid, sound pricing strategy.
YC&E had dozens of rates (over thirty years in the making) and our job was to systematiclly streamline them all while validating the structure. We decided it would be best to break everything down; question everything and essentially start from scratch.
As we embarked on multiple working group sessions (IRG-Issue Resolution Groups), we constructed the execution of the build. We discussed our business philosophy and focused on the core of our business, identifying what makes us tick. We ranked our clients (treating exceptions as just that, the outliers and one-off’s) and planned 3-5 years out, with annual reviews.
We ripped off the band-aid for some and rolled out annual steps for others to play catch up. We did this knowing that not all clients can afford anything over a traditional annual consumer price index (CPI).
The goal was to be consistent and to stay organized.
One of YC&E’s best practices came out of our new pricing strategy: to consistently communicate with clients and make sure we follow time lines for all deliverables.
YC&E does not currently offer Complete Meeting Packages (CMP’s) as a common practice. We find that offering CMP’s would require more work as we need to break down rates anyway (due to technology restrictions and for accounting as well as transparency purposes).
We do, however, believe in customization so if the client wanted we would consolidate into a package, but only on request.
The true secret is to identify and capitalize on the low hanging fruit within your own organization. No fairy tale, this takes time, effort and persistence….but in the end it will be well worth the fruit of your labor!
Contact Suzanne Shaw with Yale Conference and Events if you would like additional information on how to reassess your pricing structure.