Medical meetings and events – how to make the most of your budget
pharmafile | November 14, 2011 | Feature | Sales and Marketing |
In today’s uncertain economic climate, much like every other form of marketing and business expenditure, event budgets are under scrutiny and stakeholders are under pressure to demonstrate their value to their organisations.
Universal WorldEvents works with our clients to provide a number of cost savings and cost avoidance initiatives with a view to establishing better value for our clients, and more efficient and cost-effective working practices to ensure their budgets work even harder for them. We recognise that, in the present business environment, it is important to continuously challenge the way things are done and to be proactive in working to deliver the best return on investment on your event and meetings budget.
It’s easy to talk about it but here are a few examples we would like to share, to demonstrate it to you in practice:
Consolidated venues and destinations
We undertook a review with one of our existing pharmaceutical clients for whom we manage over 100 events per year to consolidate their non congress business, based on the following criteria:
- 6 Destinations in Europe selected based on their travel accessibility and cost, cost-effectiveness and tax efficiency from a VAT perspective
- 2/3 preferred hotels selected in each destination to reflect the different types of meetings both internally and externally facing
- All destinations and venues selected for external meetings are within HCC Guidelines
- EMEA headquarters and affiliates must book these destinations and venues as their 1st choice destinations
- Destinations and venues reviewed on an annual basis to avoid complacency and ensure competitiveness in the market place
- Continuous feedback on each destination and venue.
The benefits to the client have been significant, representing, on average, a 15% – 20% reduction in their event management spend.
Universal WorldEvents worked closely with the client to identify the scope of the work, suitable destinations and then negotiate preferential rates with all third party suppliers in each destination. We have taken the management information in terms of cost savings in the key areas of event spend from this process, and modelled this against the actual spend on meetings and events, excluding congresses.
Benefits to implementing this initiative are as follows:
- Negotiated rates with hotels and local suppliers
- Flexible terms and conditions
- VAT reclaims processes enhanced due to consistent destinations being used
- Planning time on events reduced
- Site inspections (venue, technical and health and safety) only required for very complex meetings
- Production companies know the hotel and destinations making them more efficient
- Opportunity for convergence across different functions or product areas in the business
- Marketing and medical teams plan further in advance, particularly if they know a certain hotel and destination is their preferred option
- Financial management and billing process enhanced
- All venues used for external meetings within HCC guidelines.
Consolidation of medical congresses
As a decentralised business when attending large medical congresses; many pharma-ceutical companies are missing out on a large number of potential cost savings.
Often there are a large number of people attending one single congress, from regional (EMEA) departments, global teams, R&D and country affiliates – some areas of the company will use a centralised service to organise their attendance whilst others will make their own individual arrangements.
This decentralised approach leads to a number of inefficiencies around the congress:
- Dilution of housing room blocks and registration with regards to the negotiation on terms and conditions
- Multiple agencies providing the same service at a local and global level
- No consolidation of buying power with third party suppliers in the destination
- No consistent global attendance at the congress, potentially impacting on how the company is perceived in the marketplace as corporate branding, service delivery etc. will vary from country to country
- There are potentially a number of areas where costs could be avoided in the attendance at the congress, recognising that the larger countries will require a more tailored dedicated service specific to their KOL’s, particularly when consi-dering the language and cultural differences.
The percentage of spend that is not being centrally co-ordinated purely for the delegate package can be a significant proportion of the company’s overall attendance.
In previous congresses we have organised for clients, we have been aware of the fact that due to individual countries making their own arrangements that this can have a big impact on the overall cost. For example, if during one specific congress, one country cancelled 10 delegates directly with the organisers and another country increased their numbers by 10, this would involve increased spend on one side with cancellation charges applicable to the other. If the group was centrally co-ordinated, the additional 10 delegates and 10 cancellations would be managed by one agency and therefore no additional cost to the business.
There would be other potential cost savings, cost avoidance and synergies that would potentially reduce costs further:
- Maximisation of early booking discounts
- Agency fees reduced due to increased volume
- Transportation costs reduced due to consolidation and use of larger, more cost-effective vehicles
- Less agency staff on site and cost split across a higher number of attendees.
- In addition there are other benefits such as:
- Central control and management of spend
- Central control over compliance adherence
- Consistent implementation of company policy and operating procedures
- Consistent service levels and ‘brand’ experience across the whole company.
Cost avoidance in the supply chain
We work closely with a number of our suppliers to achieve preferred rates for our clients, as well as continuing to enhance our own internal processes to drive cost.
- We ran a tender for DMC’s worldwide resulting in negotiated terms and conditions, financial security, agreed service levels with pricing reduced by up to 50% in some instances
- We established preferred suppliers for print and design and production with agreed rates and terms in place
- Our operational teams are trained to negotiate with all suppliers on price, added value and terms and conditions
- Continuous budget reviews take place during the management of the event to ensure all variances are identified and managed accordingly
- Monitoring of key dates in terms of attrition and deadlines
- On site management of suppliers to negotiate on the ground expenses or reduced numbers etc.
- Working closely with clients to ascertain the preferred option with regard to direct costs such as printing, where clients may have their own agreements in place that would be more beneficial
- Utilise corporate rates for services if more advantageous to the event budget
- VAT/TOMS management and reclaim where possible.
We are continuously looking at ways to try to evaluate the supply chain with a view to providing the best quality and value solutions for our clients.
Other initiatives
Universal WorldEvents are working with a number of our clients on Strategic Meetings Management Programs, whereby we look at all aspects of the event spend and develop systems and procedures to continuously evaluate the event budget and reduce costs. The agency’s management fees are a very small part of the overall budget for an event, it is therefore important we are focused on the main areas of the budget:
- Travel management – selecting desti-nations that are easily accessible and cost-effective
- Registration and communication – developing tools to make the process more efficient
- Operational efficiencies and effectiveness – introducing simple but effective standard operating procedures
- Sourcing – looking at savings through increased negotiation and desti-nation/vendor consolidation
- HCP management of contracting, pharma code and deadlines
- Management information – better systems and procedures to capture data to help develop more efficient/effective working practices that impact on the bottom line.
We find from our experience, that there is not a ‘one shoe fits all’ scenario with the clients we are working with, as there are different influences and management structures that have evolved over many years that need to be taken in to consideration.
As well as the above cost savings and avoidance ideas, it should also be remembered that, wherever possible, it is vital to provide evidence for a Return on Investment (ROI) on event expenditure. Spend on meetings and events is a major investment for a lot of pharmaceutical companies and it is important to justify and support this investment.
ROI is the commercial return that is achieved from the event, less the cost of the event divided by the cost of the event, measured and expressed as a percentage. It can also be referred to as ROO – Return on Objectives. Clearly the cost of an event is a key element of this equation. In terms of measuring the effectiveness of an event it is important to establish that it is possible to demonstrate that an event has been effective, even if it does not lead to the calculation of a commercial return such as is the case with certain event and meeting types. This is of particular importance when one considers external events and compliance issues relating to the inability in being able to attribute any commercial value to the event.
However, if an objective, for instance, has been to enhance physicians learning with regard to a particular therapeutic area, then this can be measured and used as a means to judge the success of the event.
Whether through a monetary return or not, an event should always be judged on its ability to meet objectives initially set out by the company.
By Mark Saxby, Sales & Marketing Director – Universal WorldEvents
For more information on how to make the most of your event budgets, please contact Mark Saxby, Sales & Marketing Director, Universal WorldEvents.
Mark Saxby is Sales & Marketing Director at Universal WorldEvents. For further information about our services see our company profile here or email mark.saxby@universalworldevents.com
