CHAPTER 2

Sales and Marketing

KPI: Qualified Lead List

Owner	Sales Department
Data Sources and Collection	The sales team members will have to track and record the qualifying process, probably by means of a checklist. Final approval on qualifying should come from the head of sales
Reporting Frequency	Quarterly

Why This KPI Is Useful

This KPI describes a relevant performance measure for sales and marketing. It is also a means of accountability, which makes apparent the discipline, activity level, and effectiveness of salesmanship. This KPI includes aging of the lead, lead source, preferred dates and space, targeted market, and confidence level.

Two schools of thought exist regarding sales leads. One is to count nearly everything as a prospect. I regard the counting and attention paid of all leads to be time consuming and of little value. The other school of thought is to have a process to “qualify” the lead after being vetted by a separate marketing department or marketing manager within the Sales Dept.

Convention centers need a logical, streamlined process for defining a “qualified” sales lead. The process should be uniquely suited to the center’s business model and similar to the one used by CVBs. The recommended process is detailed below:

Objective

Ideally there should be a qualified lead for as many future open dates as possible. This does not mean disregarding qualified leads for dates and space already licensed to other events. Record them all, maintain the relationship and communicate appropriately. Keep the leads apprised of events, changes, and activities at your venue. If the business interest endures, think of the leads as a waiting list.

Managing Unfavorable Conclusions and Inferences

Clearly it’s a bad sign if open dates have few or no qualified leads. Maybe the lack of leads is a matter of salesmanship or perhaps it’s more a question of marketing strategy. After a clear-eyed review with no obvious paths toward a solution, I would take an introspective look at your targeted markets. Collaborate with the CVB on this. Ask local hoteliers their opinions. For a variety of reasons, there are some vertical markets and sector leading events that are aggressively pursued but with little success. While at the Javits Center I recall spending a great deal of resources trying to convert a lead from a major music event. We proceeded incautiously and impulsively without useful business intelligence. Had we done so, we would have easily learned there was no way the event would ever leave Nashville and Anaheim. The lesson learned was that there was never a business case here and we should never have regarded it as a qualified lead expending marketing time and funds as we did.

Ultimately some prospects may be a bad fit for certain cities and convention centers. Perhaps your sales team and the CVB made some bad choices about the probabilities of converting certain event types and economic sectors. Take another look at items 4 through 7 of the qualified lead process above. The process is not a cursory checklist but rather a review requiring a high level of attention.

How to Calculate and/or Organize Data

A master list can be compiled by office staff as shown in Work Sheet 2.1. Alternatively there are many software programs designed for sales teams which may be appropriate.

QUALIFIED LEADS - SALESMAN (init.) ____
QUALIFIED LEADS	ORIGINATION DATE	LEAD SOURCE	TARGET MARKET? Y/N	OUT-OF-TOWN COUNT	CONFID. LEVEL (1 - 3, 1 highest)
Seth Classic Car Auction	03-Mar-19	Local Auto Dealers Asso.	N	1200	2
NACS - Midwest Chapter	30-Nov-18	CVB	Y	1000	1
State Interscholastic Wrestling Tourney	17-Dec-18	Sales Call from AB based on industry rumor	Y	800	3
Midwest Gift Fair	12-Apr-19	Prospect Inquiry -phone call	N	2300	3
Music Teachers Ann.Mtg.	29-Apr-19	CVB	Y	950	1
TOTAL LEADS	QUALIFIED LEADS	QUAL LEADS/ LEAD TOTAL %
35	5	14.3%

Work Sheet 2.1 - Qualified leads

Presentation Notes and Formats

Table with head of sales commentary. As a supplement to the qualified lead list, it would be very helpful if the list were also displayed in a calendar form where managers, trusted stakeholders, and board members could see the future possibilities. Qualified leads presented in calendar form essentially becomes your “ waiting list.”

Things to Watch for–Misinterpretations, Nuances, and Cautions

Be Cautious about Leads Generated by a Prospect’s RFP Process: Say you have received an RFP for a large event. Know that the invitation does not necessarily mean there is sincere interest in holding the event in your city. Too often your proposal with all its preparation time and expense will not be seriously considered. Your invitation may be just a part of an organizer’s selection process requiring a set number of proposals. This is often done for price comparisons. If your rent and service prices are high by comparison and you do not need to discount to obtain business, you may not want this exposure. Conduct research to find whether the prospect is serious about your coming to your city and that your city and venue are not simply names on a white board or spread sheet.

KPI: Market Share of Certain Event Types and Economic Sectors

Owner	Sales Department and CVB senior management
Data Sources and Collection	The task of researching the size of a particular market (# of events) and finding out how the competitors succeeded in hosting those events is best assigned to a reliable intern as a project
Reporting Frequency	Quarterly

Why This KPI Is Useful

Center management should know the state and rank order of market share vs. competitors. The “market” in this KPI is the event types and economic sectors considered target markets. Market value can be broken down in terms of economic impact, revenue potential, frequency, and time of year. For example, large convention centers such as, Las Vegas Convention Center or McCormick Place may regard the Tradeshow 250 as a market in itself and its market share as a useful performance measure. A small convention center may regard regional professional associations a valuable market worth comparing with competitors to validate performance.

Objective

This KPI will provide focus and cause a review of marketing strategies and salesmanship if the comparisons are unfavorable.

Managing Unfavorable KPI Conclusions and Inferences

If the relative market share is far below where it should be, your convention center is probably seeing unfavorable results from other KPIs. If there is a history of underperforming in comparison to competitors, then it would be useful to go through a period of analysis, starting with a strengths, weaknesses, opportunities, and threats (SWOT) analysis of your convention center. Also, obtain the opinion of others, perhaps a trusted event organizer or a hotelier who also services your city as well as your competitors and cover the subjects of rent and service levels. Additionally, there are research resources on city brand and reputation that rank cities using a wide variety of characteristics such as crime, transportation, tolerance, economic prosperity, and so on (Bloomberg, the Reputation Institute, Milken Institute, Martin Prosperity Institute). The process may feel overwhelming, but your team should, as a minimum, settle on the actionable pieces of the SWOT analysis.

How to Calculate and/or Organize Data

The researcher should compile results in a work sheet (see Worksheet 2.2) as follows:

MARKET SHARE OF CERTAIN EVENTS VS. COMPETITORS
Typr or Sector	# of Events	Capital City CC		Competitor 1		Competitor 2		Competitor 3
		#	%	#	%	#	%	#	%
SMERF	23	5	22	5	22	9	39	4	17
Tech	7	1	14	4	57	2	19	0	0
Health Sci.	17	7	41	4	24	3	18	3	19

Work Sheet 2.2 - Market share of certain event types and sectors vs. competitors

Presentation Notes and Format

Table, bar graph, or both with head of sales commentary. See a sample bar graph as shown in Figure 2.1.

Figure 2.1 Market share of targeted markets

KPI: Conversion Rates per Total Leads and per Qualified Leads

Owner	Sales Department
Data Sources and Collection	The Sales Department will have all this data
Reporting Frequency	Quarterly

Why This KPI Is Useful

This is an essential performance indicator for the department and individual sales persons.

Objective

Track and improve conversion rates. Use this KPI as a means to assess individual performances of your sales team.

Managing Unfavorable KPI Conclusions and Inferences

Compare the performances of sales team members and you may find an individual who is performing well below the conversion rate average. After a period of counseling, if necessary, you may have to take an appropriate personnel action. If the entire sales team has a below par conversion rate, then the problem may be deeper; ineffective qualified lead process, excessive micromanaging, low an travel and entertainment budgets, a targeted market where closing probabilities are very low, and so on.

How to Calculate and/or Organize Data

SALES CONVERSION RATES – INTERNAL
	Last 6 Mos.			Cumulatively - This Year			Last Year
	Leads	Executed Contracts	Conversion Rate %	Leads	Executed Contracts	Conversion Rate %	Leads	Executed Contracts	Conversion Rate %
Total Leads	93	5	5	173	9	5	164	8	5
Qualified Leads	17	4	24	31	7	28	29	6	21

Work Sheet 2.3 - Sales conversion rates - internal

Presentation Notes and Formats

Table with head of sales commentary

KPI: Lost Business—Numbers and Causes

Owner	Sales Department
Data Sources and Collection	There’s a lot to learn in this KPI if information can be obtained. Some prospects are reluctant to answer, some dodge the question, and others won’t be forthright about the real cause of locating elsewhere. The sales team should have built a good enough relationship with qualified leads that they can get a frank response.
Reporting Frequency	Quarterly

Why This KPI Is Useful

Finding out where the lost events chose to locate will provide valuable insight as to who your competitors really are. The knowledge base is important because it may expose problems, ones you may not be aware of.

Objective

Learn how the overall event market behaves when making event location choices. Use this information to change marketing strategy and effect internal improvements. Also reduce the amount of lost business from the most valuable events and event sectors. Some causes are predictable and others may surprise.

Managing Unfavorable KPI Conclusions and Inferences

Recording and analyzing lost business reasons appears rigorous when starting out. It’s necessary though. Too often lost business reports are treated casually. Occasionally you will receive a valuable but painful response from a “lost” client. Many responses have to do with price, not just at the convention center but the expense of the city as a whole; hotels, restaurants, taxis, and so on. The best practice in managing unfavorable lost business reports is to have frank discussions with lost events and spend more time listening than making excuses. The “lost clients” will remember the conversation. If this discipline is followed, the pace and nature of plans made for turning around lost business will be more insightful and effective.

How to Calculate and/or Organize Data

Use work sheets similar to Work Sheet 2.4:

LOST BUSINESS REPORT - 2019
CAUSE	#	Where did they go?	#
Unacceptable dates	8	Denver / CCC	8
Unacceptable space	7	Salt Lake City/ Salt Palace	6
Rent too high	7	Aurora/Gaylord Rockies	3
Competing venues are less expensive	5	Las Vegas/Mandalay Bay CC	3
Service costs	2	Las Vega/LVCC	3
Hotel costs	2	Reno Sparks/RSCC	2
Not Enough Space	2	Phoenix/PCC	2
Lack of nearby hotel rooms	2	Santa Fe,NM/SFCC	2
Direct flights	0	San Francisco/Moscone	2
City issues (crime, culture, politics)	0	Tucson/TCC	1
Other	2	Unknown	5
Totals	37		37
Out-of Town attendees	35,000
Est. Rent	$3.9M

Work Sheet 2.4 - Lost business report

Presentation Notes and Formats

It may help to supplement the table with a graphic detail like a map to show where lost business goes. Also, include head of sales commentary.

KPI: Rent and Other License Fees—Market Pricing Comparisons for Competing Venues

Owner	Sales Department
Data Sources and Collection	The task of surveying other venues for pricing is best assigned to a reliable intern as a project—lots of internet searches, phone calls, and emails. The surveyor should be prepared and have the competing venue’s floor plans available for reference. Some venues have different methods for assigning rent prices; by the gross square footage of space (all space categories), or, for exhibit halls, by NSF with a minimum percent of the hall gross square footage. Additionally, questions should be asked about rent and service discounts that may apply given certain conditions such as: 1. Varying rent for move in and out days 2. Contracting to locate the event at your venue for multiple years 3. Waiving rent for a large F and B expenditures in the ballroom 4. Waiving rent for a certain level of hotel room nights 5. Discounting or waiving service fees for event organizer; meals, internet, or electric services.
Reporting Frequency	Annually

Why This KPI Is Useful

Event organizers concern themselves with rent much more than other venue costs. In many convention centers, organizers negotiate a certain amount of free and discounted services from in-house or exclusive contractors or obtain commissions from non-exclusive contractors they hire. A typical negotiating tactic is to always state that rent and services are much less expensive at competing venues, so it’s useful to know the facts.

Objective

Give the sales team enough timely business information and situational awareness so they may negotiate effectively.

Managing Unfavorable KPI Conclusions and Inferences

The only unfavorable conclusion that can be reached is that competitors are attracting more of the same targeted business that your team is pursuing and doing so because of lower rent and service fees.

I would first evaluate if you have reached or exceeded the limits of your pricing power. If qualified leads and conversions have decreased and pricing complaints have increased, then take that as a sign to review rent and service pricing. Reasonable price competition among competing cities and venues can work, but once one starts leading with price, especially highly discounted rent, the expectation is that it will happen all the time.

It’s an uneasy position to be in when a prospective event demands the same discounted deal as others. Competing on price alone diminishes a city’s brand and creates an impression that event locations are like commodities; one is as good as the other. Indeed they are not. Sales teams should be mindful of this and strive to obtain as much intelligence as possible about a prospect’s real intentions. If the sales team is secure in their judgment that your city provides a real market advantage over competing locations, discounted rent or not, be prepared to confidently hold and negotiate your position, don’t blink. There are reasonable compromises and value-added incentives that can be offered rather than forfeiting rent or other earned revenue sources.

How to Calculate and/or Organize Data

Work sheets 2.5 and 2.5a are examples of work sheets that can be used to organize the data and calculate averages: They represent two rental price structures; rent based on the gross square footage of any rentable space (exhibit halls, ballrooms, meeting rooms, etc.) and rental price for exhibit halls based on NSF with a minimum percentage of the hall’s gross square footage.

RENT AND LICENSE FEE COMPARISONS - EXHIBIT HALLS ($/Space GROSS SQUARE FOOTAGE)
	Capital City CC	Comp. 1	Comp. 2	Comp. 3	Average
Rent Move in Day	0.45	0.15	0.27	0.17	0.26
Rent Event Day	0.45	0.5	0.65	0.65	0.56
Rent Move out Day	0.45	0.15	0.27	0.17	0.26

Work Sheet 2.5 - Rent and license fee comparisons ($/Space Gross Square Footage)

RENT AND LICENSE FEE COMPARISONS - EXHIBIT HALLS ($/NSF)
	Capital City CC		Competitor 4		Competitor 5		Average
	$/NSF	NSF Min. %	$/NSF	NSF Min. %	$/NSF	NSF Min. %	$/NSF	NSF Min. %
Rent Move in Day	0.19	50	0.25	55	0.30	45	0.25	50
Rent Event Day	0.50	50	0.48	55	0.59	45	0.52	50
Rent Move out Day	0.28	50	0.25	55	0.30	45	0.28	50

Work Sheet 2.5a - Rent comparisons ($/NSF)

Presentation Notes and Formats

Tables with head of sales commentary.

KPI: Retained (Recurring) Events—Record, Evaluation, and Comparison to All Events

Owner	Sales Department and the General Manager
Data Sources and Collection	The Sales Department and CVB will provide prospective event statistics. The estimated economic impact will be calculated by using the convention center’s economic feasibility study and follow-up research.
Reporting Frequency	Annually

Why This KPI Is Useful

Retained events play each year or are part of a fixed rotation every three to five years. They are crucial to the business model of convention centers and monitoring their business performance is necessary. The overall value of retained events also needs to be compared against the value of all events and the value of singular events (aka one-offs), which either won’t return or may but only after five years or more. Without retained events a center’s financial and economic impact performance is unpredictable.

Objective

Track and evaluate the value of retained events. Be able to compare retained events to singular events statistically.

Managing Unfavorable Conclusions and Inferences

There are several levels to consider:

The situation above leads to some tough management decisions. There are few policies and practices that can help steer this process. The first is to remind consumer shows that they are a low booking priority. Because of this they will always risk being assigned dates and possibly space that do not fit a desired pattern. The other policy should be to deal with all retained events by advising conditions where their usual dates and space will be assigned to a one-time event. They need to be flexible and keep their business performance stable and growing. Many event organizers will resent this, so the conversation should be tactful and business-like.

How to Calculate and/or Organize Data

RECORD OF RETAINED EVENTS - 1st QTR. 2019
Event Name	NSF	Earned Revenue or Profit	Out - of Town Attendees	Hotel room Nights
Southwest IT	36,000	33,301	1,954	3,908
XYZ Gift Fair	55,000	30,294	2,005	3,008
Rocky Mountain Mining Asso.	15,500	20,858	1,010	2,525
Alpine Home Improvement	21,600	9,545	58	58
Rocky Mountain Dental	26,000	28,055	1,461	3,945
State Music Teacher's Ann. Mtg.	57,000	28,600	1,501	4,203
Mountain Crafts	31,000	19,950	902	1,263
Colorado Golf Show	28,500	18,200	38	29
Totals	270,600	188,803	8,929	18,937

Work Sheet 2.6 - Record of retained events - 1st qtr. 2019

Presentation Notes and Formats

Table, bar graphs, or both, comparing current year to previous year for NSF, profit, out-of-town attendees, and hotel room nights.