Spoiler Alert: It’s not as simple as it used to be.
Our industry is still adapting to and learning from the unprecedented changes of the past two years. Nowhere is that more apparent than when it comes to an event’s revenue model. In the olden days when all events were in person, we generated revenue with sponsorships and ticket sales.
The value for both parties was easy to highlight. Sponsors got to press the flesh with thousands of potential customers while attendees networked and learned about the latest and greatest in their industry. We all understood how to create perceived sponsorship value and demand for tickets in that model.
With the long-term future of events still very much in flux, it’s important for event planners to consider how to best drive revenue with hybrid and virtual events moving forward.
The hybrid event pricing balancing act
When virtual events became the status quo in 2020, the bulk of the revenue came from our sponsors, not the attendees. With no open bars and goodie bags or free meals, an event’s barrier to entry had to be small enough to attract the right people, even draw in those who would not have attended an in-person event. We initially thought that meant low or no cost tickets for those in attendance.
But it’s not as simple as giving away tickets for little or nothing, because when people see something as free, does it really have any value to them? We’ve had to focus on perceived value as a result. There are a lot of ways to do this, strategies like promoting an event as costing $1,000 to attend, then later issuing discount codes that make the cost $0. When a potential attendee receives the code, the perception is something of value is being offered to them and they have value to their company because they have the opportunity to attend this $1,000 event for free.
But with hybrid events, pricing strategy becomes increasingly complex. How do you price the in-person experience versus the virtual one? If the cost delta between live and virtual is too high, your event floor could be a ghost town if the experience doesn’t appear it will justify the cost. If the price of a virtual ticket is too high, you’ll spend thousands producing that component of the event for virtual sessions with only a handful of people in attendance.
The key is creating perceived value for both in-person and virtual attendees that makes the cost for each experience seem worth it.
Perceived value should drive event pricing decisions.
When the volume of live events returns to something resembling pre-pandemic normal, traditional pricing models will be out the window because individual behavior has been permanently changed. Traditional live events come with hard costs for venues, and we just don’t know yet how eager people will be to attend.
Instead of getting mired down in cost cutting, focus on the experiences and the value created by them. Watching a virtual keynote address from Elon Musk at a green energy event has value. Being one of only 200 in-person attendees to attend a happy hour with him also has value. Price both accordingly.
And just because a person elects a virtual experience, that doesn’t automatically equate to a lower cost for attendance. If your event offers certification credits for example, the virtual and live ticket cost should match because the value is in the credits, not the cookie and iced tap water in the back of the room.
With the right virtual event platform, you can create the unique experiences that vary by what the attendee can access for a particular price point. All-access, every day would be one price, limited access another. Offering several unique experiences for both virtual and live attendees will maximize your target audience size by creating cost models that appeal to a wider array of prospects.
Sponsors need to create value too.
While a lot has changed with respect to pricing event tickets and how events generate revenue, sponsors as the main source of that revenue really has not. So we need to take care of them to be sure they get the value the seek from the event. At live events, most sponsors know you can’t just sit in your booth and wait for the magic to happen. They’ve got to be out there hustling at networking events, offering goodies in the booth that attendees will actually want, and participating in as many of the informative sessions as possible.
It’s up to us as event planners to help sponsors get as much out of the virtual part of an event as possible. Virtual events provide sponsors with instant leads. When someone hits their booth, you can immediately put them in a nurture campaign. In a virtual platform, you want to set them up with best practices and create opportunities for them to use all their strategies. The sponsor goal of these events is to grow the customer base and create value for existing customers, so it’s up to us to help them do that.
We don’t have a crystal ball when it comes to the future of virtual and hybrid events as revenue drivers, but we’re learning more with each new event and developing best practices. The world is different, the needs of our clients and attendees are different, and we’re here to help you meet those needs.
Schedule a demo today and learn more about how Hubb can help you drive event revenue.