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Merging trade shows.

Stand together for collective clout.

MERGING TRADE SHOWS

After seven years of sponsoring a trade show, in 1988 the Indiana Association of Plumbing-Heating-Cooling Contractors, Indianapolis, began to make exhibitor and attendee projections. The IAPHCC show had grown to 175 booths with more than 2,000 attendees. Our convention committee asked, how much larger could the show become? Should we consider inviting the public to attend? What other means were available to expand and diversify the show?

The committee concluded that

* The products of one constituent group were well represented while the other's were only marginal, and plumbing contractor attendees outnumbered heating and air-conditioning (HVAC) contractors three to one. * With the help of local suppliers, we attracted attendees from all geographical areas of the state. Many suppliers brought customers to the expo on charter buses. * We had no competing shows to contend with. * Exhibitor growth had slowed dramatically as we approached market saturation, at least in plumbing. And, * The show was perceived as "plumbing only," a stigma IAPHCC also fought regarding its membership.

The next logical step was to broaden our exhibitor base and attract more attendees, especially on the HVAC side. While we couldn't predict revenue gains, without any competition we had a wide open market to pursue.

Joint venture incentives

The simplest way to bring more market depth to the expo, the IAPHCC committee reasoned, was to bring related shows under our umbrella. Our pitch to prospects would have three prongs:

1. Exhibitor participation in trade shows increasingly depends on sufficient attendance by industry personnel. Exhibitors want results, and show managers are challenged to find innovative ways to deliver customers to their events. 2. Attendees have heightened needs for education and little time to satisfy them. A broad-spectrum package of seminars and exhibits helps justify investment of time, effort, and money. With overlapping disciplines at the expo, we could conduct joint educational sessions, using industry talent as presenters. 3. For our partners, co-sponsoring an industrywide trade show would streamline administration. Three of the four groups we had in mind had no paid staff, so volunteers planned and promoted their annual meetings. This strain made it difficult to recruit volunteers to work on meetings. Volunteer-only show promotion is also less credible, and with stagnant or declining attendance the future viability of many events is threatened.

Over three years, we approached and successfully merged the following organizations into the IAPHCC show:

* Central Indiana Chapter of the American Society of Heating, Refrigerating, Air-Conditioning Engineers, representing commercial and industrial HVAC technicians and designers; * Hoosier State Refrigeration Service Engineers Society, providing technical education and certification for HVAC technicians; * Central Indiana Chapter-American Society of Plumbing Engineers, addressing trends in plumbing design and engineering; and * Indiana Well Drilling Contractors Association, a trade association of contractors who install and service water wells.

With the exception of the well drillers, all the groups we approached were having difficulty maintaining prominence within their respective membership markets. Affiliating with the IAPHCC show would thrust them into the limelight, enhancing their credibility and ultimately their organizational viability.

Assess your prospects

Hostile takeovers do occur, but for a friendly merger look for groups that complement--not compete with--yours. These are the first steps IAPHCC took.

1. Identify good merger prospects. Read trade and professional journals to determine which groups are struggling with their trade show or have no show. Of the four groups IAPHCC targeted, only three had small shows. 2. Visit these shows. Observe their style, format, strengths, and weaknesses. We did not use a formal evaluation form, but by talking with 5-10 percent of exhibitors, you will discover their level of satisfaction. Has the show grown, stagnated, or declined in recent years? Are the show hours and overall schedule satisfactory? Are exhibitors receptive to the idea of a larger joint show? Avoid coming on too strong--you may be talking with one of the show's committee members.

On one such visit, I discovered that my prospective affiliate's two-day exhibition was scheduled in direct conflict with educational sessions during daytime hours. Traffic in the exhibit area was sparse because most attendees were in educational sessions, and local members were still on the job. Vendors were very open to a show that would avoid schedule conflicts and limit exhibit hours to a late afternoon and evening format. 3. Reevaluate prospects' potential. Do you have common vendors? How many booths could you gain in a merger? Are their current vendors content, or would they jump at the chance to try a new and improved show? Have they fully penetrated their own market, or could you attract new exhibitors to a bigger show?

Many of your evaluations in steps two and three are subjective. I tried to listen to the talk on the floor and read between the lines. Consider what you can do to appeal to exhibitors. For example, IAPHCC expanded the traditional charter bus service to include more customers. 4. Make your pitch. If one or more prospective show has potential, it's time to approach each organization's leadership. If the association has staff, contact the meeting planner to present your idea. If the response is negative, you may want to drop the prospect. Going around staff to persuade the volunteer committee can brew later trouble. If no staff exists, schedule a meeting with the convention or trade show volunteer chair.

Following an interested response, ask to meet with the appropriate committee or the full board to make a formal presentation. This is where you bring out the big guns, distributing samples of your promotional literature, trade show guides, photos, and anything else that puts your efforts in a good light. IAPHCC's strategy included showing a videotape developed to promote exhibitor participation and generate attendance. Spell out the advantages you see for them and how your own interests are served.

You may be surprised by an enthusiastic welcome, particularly if their show is struggling. The organizations we courted responded, "Your trade show is very successful. Why would you want us to join you?" They were flattered by our proposition.

Leveraging logistics

With four willing partners, IAPHCC assessed the practical issues. Three questions to work through are: What is the time frame for merging? What financial arrangement suits? How will the show be managed?

Time frame. From our first contact to meeting with the board usually took two months. Getting approval took another three months. As you sit down with a new partner to set a schedule, ask leading questions. Do they have pre-executed contracts with hotels or other convention facilities for future years? Do they have escape clauses? Will the proposed merger be delayed--or expedited--by volunteer leaders, committee members, or staff who have their own agenda?

Two shows successfully merged with IAPHCC's the following year. A third affiliate delayed because of a hotel contract, although the organization was within its right to cancel. The group did not feel comfortable breaking the contract, and we respected that. Be aggressive soliciting affiliates, but be certain to spoon-feed--not force-feed--your prospects.

The fourth merger was delayed a year because a supportive committee member wanted to wait until he was committee chair. He needed time to select committee members and lay the groundwork for a favorable response.

Finances. Merging small volunteer-run shows, as we did, can be quite straightforward. None of our new affiliates' shows produced net revenue. The deal we offered was to take over all administrative tasks and costs for the trade show. Our partners were happy to hand over the risks and headaches; IAPHCC also kept the profits.

The single exception was for an affiliate that sponsored a scholarship program. We agreed to underwrite its $1,500 funding each year as a plum to attract their participation in the show.

If you work with shows that have been turning a profit, you may devise a percentage system based on booth sales or attendance generated. Be sure that as show manager you capitalize on your dominant position.

One of the key advantages of joint trade shows is economies of scale. Expenses such as printing, postage, telephone, sales and marketing, and general administration are combined and reduced. In addition, on-site expenses for security, signage, theme props and decorations, registration, and meeting room rental will be reduced significantly through a joint show. IAPHCC spent 10 percent more on overall costs and increased net revenue by 30 percent.

Show management. Centralized administration is critical. Planning, coordination, promotion, and general administration must be handled by one office. As show manager, IAPHCC did not execute formal agreements with its affiliates; we proceeded on a handshake basis from the start without any regrets. (With more intricate financial arrangements, you may want to have a contract. Consult legal counsel.)

I head a joint committee that runs the Indiana Expo. The committee includes two IAPHCC volunteer leaders and the chief volunteers of each affiliate. The committee establishes policy and priorities, while the managing organization implements the plan of action.

We meet every four to six weeks starting eight months before the show and frequently communicate by telephone. Early in the process we also invite an advisory committee of 20 vendors to talk about show hours and format.

Within the committee, each affiliate lets IAPHCC know what it wants for educational seminars and other events, and we work out time and space logistics. At the expo each group sponsors its own officers installation, and we plan a combined keynote luncheon and speaker. Each affiliate equally shares responsibility for soliciting vendors to exhibit in the show, act as speakers for educational seminars, and sponsor receptions and meal functions. Our strategy for building up the trade show has been to target particular companies--especially the larger vendors that hadn't exhibited before--and make up a hit list. The committee determines which affiliate has the most clout with each vendor and who will make the pitch. I act primarily as coordinator and catalyst, but sometimes join a group presentation to a show prospect.

Some differences still prevail. IAPHCC coordinates joint registration, for example, but our members pay $125 while the other associations charge $50, $25, and nothing. The committee is considering a uniform registration fee this year.

By serving as show manager, IAPHCC has boosted its image among members and the industry as well as in the eyes of the affiliates and their constituencies. We are perceived as a dynamic, pro-active organization. And while the staff time required to coordinate this event has increased, the benefits derived have been invaluable.

What's in a name?

Prospective merger candidates fear losing organizational identity. Rather than look at the positive aspects of merging, such as the increased visibility and credibility, most associations are concerned they will be overrun by the sponsoring association. Assure them your motivation is to expand the show, not swallow up other associations.

All through the solicitation process we did some hand-holding. Rapport, credibility, and trust are crucial to success. With IAPHCC, no one brought up the identity issue after participating in the show.

Choosing a new name for the show that does not dilute its focus is a real challenge. The name must be broad enough to include all of the industry segments represented, yet specific enough to have marketing thrust and appeal to the target audience.

The IAPHCC show was previously called the Indiana Plumbing-Heating-Cooling Expo. It's now the Indiana Expo, with subtitles to cover all the specialty fields represented. This format allows for future growth and expansion and has the continuity of a constant primary name.

The results of joint-venturing the Indiana Expo have been outstanding. Attendance increased the first year by 40 percent and an additional 20 percent the second year. Booth space increased only modestly the first year but jumped 15 percent in year two. Attendees responded well to the increased number of educational seminars.

Joint trade shows with related industry or professional groups can enhance credibility, increase nondues income, and improve member satisfaction.

Philip G. Amodeo, CAE, is executive director of the Indiana Association of Plumbing-Heating-Cooling Contractors, Indianapolis. For information about related topics or ASAE's Conventions and Expositions Section, call Barbara Silversmith at (202) 626-2764.
COPYRIGHT 1991 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Amodeo, Philip G.
Publication:Association Management
Date:Oct 1, 1991
Words:2009
Previous Article:Constructing criticism.
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