Dollars and Sense

“In the special-events industry, pricing is really a controversial issue and a hot topic right now,” explains Lisa Hurley, editor of Pacific Palisades, Calif.-based Special Events magazine (a CMI sister publication). “Some companies charge an hourly fee for services, and some charge a markup on everything that they source for you, but there are really a million ways to do pricing.”

Check out Lisa Hurley's "Guest Room: Naming Your Price" on Specialevents.com

With Sarbanes-Oxley and procurement forcing more transparency into invoices, clients are looking for production companies to provide line-by-line costs of each service. “Clients want the invoice to specify the cost of each service and the production company's fee next to it,” says Hurley. “It is causing the event-production industry to open up its books a lot more.” It's also raising more questions, she says. Production companies are asking, “How do you put a price on creativity?” and “How can we charge you for a service in a way that makes sense to procurement?”

Steve Nosek says that he asks his event-production company for an overview of the aspects of his meeting that require their expertise, such as a themed dinner on the first night or entertainment for the farewell gala. They then come back to him with a presentation on the creative, as well as pricing based on the meeting's budget. “They usually give me pricing in three different increments.”

A good way to determine if the production company is sensitive to your bottom line is to pay close attention during the proposal stage. “I once had a company come in three times higher than my budget,” says Nosek. “I had given them my budget up front, and they came in with a proposal at $800,000 for a budget that was between $250,000 and $300,000. I thought, ‘How good could they be at maintaining cost if they can't even present an idea that is within budget?’”

Price integrity is also critical to Volkswagen's Steve Neder. He likes working with a company that provides a detailed estimate from the start and understands budgetary restrictions. “They should be able to find a way to make your program just as good with the budget you have.”

Neder understands that events can go over budget despite everyone's best efforts, but he's a firm believer that unforeseen costs should be dealt with right away, and that's what he expects. “[The executive producer] always comes to me immediately and explains the situation,” says Neder of his current production company, CCW. “He will come up with alternatives and give me the option to make a decision on the spot based on the facts at hand.”

While cost is among the most important factors to address when partnering with an outside company, it is not the only thing that Intel's Wong considers. “When I am looking over bids for potential agencies, I tell myself two things: Never settle, and you get what you pay for.”

At the end of the day, it's about finding that trusted partner that will maintain the integrity of the organization and create a memorable experience for attendees.

“The client needs to walk away knowing that they spent $100,000 and got a return on that investment, and a return on the experience,” says Miller. “We try to integrate the marketing and communication pieces of what companies are looking for and then to deliver those pieces in the most exciting and dynamic way.”

What Kind of Event Will $100,000 Buy?

CLIENT: Mohawk Industries, Dalton, Ga.

PRODUCTION COMPANY: EventWorks, Los Angeles

TITLE: Mohawk Idol

VENUE: Gaylord Opryland Resort & Convention Center, Nashville, Tenn.

OBJECTIVE: To grab the attention of the company's dealers during the annual convention's opening general session.

DESCRIPTION: The company turned the microphone over to employees and let them shine on stage, complete with a panel of judges made up of client VIPs and a guest appearance by singer Diana DeGarmo from the American Idol television show.

6 Tips to Finding an Event Pro

1. Lay the Groundwork

   Be as specific as possible about the meeting's goals and objectives, and provide details about your company's culture to ensure that the creative adheres to your brand.

2. Trust Your Gut

   Meet potential companies face-to-face. Ask yourself if the salesperson and executive producer are interested in learning about your company and its goals or are more concerned with selling you on an idea.

3. Who's Your Contact?

   Find out who your main contact will be at the production company. Will he be solely dedicated to your event? If your production company is not locally based, find out if there's a local contact person who can be available for meetings and conference calls on short notice.

4. Send an E-mail

   This is a little trick that Deanna Wong, former executive producer for Intel's chairman and CEO, Santa Clara, Calif., likes to use to test out potential companies. “I send the company an e-mail with a question,” says Wong. “If it takes them more than one day to get back to me, they don't get the job. You don't want someone on your team who sits on an issue for more than one day. In the production world, one day means everything.”

5. Check References

   Ask references about the level of service they received, budget integrity, and if the event was executed to their specifications.

6. Keep an Eye on the Bottom Line

   Ask about the company's policy on services that go over budget. Scheduled budget review meetings can also help to mitigate surprises.