By Phil Soar, co-founder of CloserStill Group and Chairman of Nineteen Group
I was in Warsaw in 1990 walking round a market with a Polish friend. We stopped at one stall which, strangely, appeared to be selling light bulbs which didn’t work – not broken, but just not working. My friend bought a couple, for around 2 pence each.
No, I couldn’t work out why either. Then she explained:
“It’s impossible to find new light bulbs in the shops – the Soviet command economy ignores light bulbs. So what we do is to steal working light bulbs from our offices and factories. But it would raise suspicions to leave a light fitting with no bulb. So we carry around a dud one at all times and replace any working bulb we have stolen with the dud.”
If you’d asked me to explain why there were stall holders whose income depended on selling non-functioning light bulbs it would have taken me years to come up with an explanation.
But there are strange realities everywhere which we fail to question.
Examples of strange realities
Why are we adamant (Comprehensives are the only way, close the Grammars) that there should be no selection of school children under 18 by ability? And yet, the moment those same pupils magically hit their 18th birthday, the whole university system should be based entirely on selection by ability?
Why are we so adamant that you cannot buy a better university education (Oxbridge etc), but we are happy for people to buy better healthcare, better schools, better holidays, better housing etc.
And in our own business, let’s pick out a few.
Why do we sell square metres of concrete at the same place everywhere in the hall? And why don’t the venues apply “surge pricing” to organisers at peak times?
Why do we not charge visitors at UK trade shows while many other countries (Germany, Spain) regularly do? And why don’t we “price surge”?
The pricing of square metres in our halls
Some shows do try to apply “premium pricing” to stands (usually) at the front of the hall. Though this ignores the research which says that the most densely populated location in halls is about half way back off-centre. But mostly we don’t.
And this goes against standard practice in most media forms. It costs more to book the back page, or a right-hand page facing copy, in a magazine or newspaper. It costs a great deal to have your product at the top of a Google listing. It costs more to have your ad run first in the cinema.
But, generally, we persist with the same price everywhere. Our (considerable) research does tend to conclude, though not absolutely, that having gradations of price according to location has a negative effect on the majority of exhibitors – they feel that they are second or third class citizens and don’t like it. Just as BA’s relegation of Gold card members to Silver recently has driven a lot of “Silvers” to Virgin/Delta. Having said that, the idea of charging everyone the same price is, when you stand back, odd.
And our venues are also interesting. Their rack-rates don’t vary that much during the year – while we all know that some months are far more attractive than others. 28% of all UK exhibitions run in September/October. 6% run in December/January and 7% in July/August. In theory at least, venues could charge more than double for the busy months – whereas cutting rates by 75% would not induce most trade organisers to run in August.
And charging visitors or not? Are we strange?
I have written about this a number of times, so won’t expand too much. But it is normal in many parts of Europe, particularly Germany, but rarely seen here. And yet we are seeing (with my own companies) rather more “VIP “pricing for special access and comfortable lounges which can generate north of £100,000 on an event.
Again, it seems to be tradition and it is hard to persuade people (sales staff in particular) to go against their, perhaps, subconscious prejudices.
I don’t offer a profound explanation. Anyone who has listened to me knows that I believe we can create “Registration Charge” as part of the normal online registration form, and I would bet that we will see more and more of this in the next five years.
And what about surge pricing?
We are very familiar with this – Uber, concert tickets, above all else airline prices (Ryanair are charging £1200 for flights to Budapest for the EC final). But we never do it. Partially because we set our rebook prices 15 months ahead and appear terrified to ever change them, but, bluntly, we simply don’t think about it in sectors which are frothing over. This doesn’t happen much in retail or manufacturing where the rate of change is slow. But, to quote CloserStill, our AI shows and our (now seven) massive DataCentre events generate really heavy demand. Why are we, as an industry, not prepared to respond to high demand like other industries – putting up square metre prices and, perhaps more relevantly, delegate prices. Striking while the iron is hot is not in our DNA.
But my point really is about the broken light bulbs. Some things appear incomprehensible when you drill down into them – and the reasons often seem to be “We do it that way because we do it that way.”
