When Barbara Dunlavey became executive director at the Biomedical Engineering Society two years ago, there was no meeting budget or system to track expenses, let alone a strategy to reduce costs. That would soon change. Dunlavey developed a systematic savings strategy based on what was most important to attendees — a plan she calls “drilling up.” The result: an average savings of 25 percent per year.
Jason Eggleston has experienced similar savings success at his association, the American Society for Microbiology, where he is operations manager. But his approach to cutting expenses at the Washington, D.C.-based association was quite different. It took a really big idea, and some creative logistics, to save big bucks.
Here's how these two association professionals — in a market where hotel rates are skyrocketing and simply holding the line on expenses is difficult — saved their organizations thousands of dollars on meetings.
Trimming the Fat
“Do we really need this?”
That was a question that Barbara Dunlavey asked quite a bit when she first joined the Biomedical Engineering Society as executive director and started poring over meeting expenses. Prior to Dunlavey's arrival at the Landover, Md.-based association in 2005, there wasn't much scrutiny of meeting costs. “There was no budgeting, there was no strategy in terms of curtailing any expenditures,” she says. After getting her arms around expenditures, she developed a spending strategy for meetings.
The strategy started with defining the goals and objectives of each meeting. For the annual meeting, which attracts about 2,500 people, the top priority was the science, the content. Expenditures that supported the content were practically untouchable, as far as cuts were concerned, says Dunlavey. “It's not drilling down, it's drilling up.” For example, audiovisual was considered critical because laptops, projectors, lighting, and sound are essential to deliver presentations and foster education. “There wasn't much savings in AV because that directly supports the content,” she says.
Everything that didn't directly affect the content was fair game. Food and beverage, entertainment, transportation, receptions, and other ancillary line items were closely scrutinized in the budget process. “There was a lot built into the meeting that certainly seemed superfluous to us, and it was an easy sell to the board to be able to say, ‘We won't be offering this service or this boxed lunch.’” One easy cut was a dinner that typically followed a tour of sites in the host city. Dunlavey kept the tour, but eliminated the dinner, saving thousands of dollars. “Why is there a full dinner in there? How important to the content is that special event?” Organizers also eliminated boxed lunches, which were distributed to attendees each day of the conference, because most people went off site for lunch anyway.
The second plank in Dunlavey's strategy was to negotiate multi-year deals with key vendors. BMES inked three-year deals with an AV provider and a general service contractor, resulting in substantial savings, says Dunlavey. While services like AV may be untouchable as a line item, she still saved by signing long-term agreements.
By cutting out the fat and negotiating multi-year, the organization saved about $150,000, or 35 percent, on the 2005 annual meeting, Dunlavey's first. In each of the last two years, the association has saved about 20 percent on its annual meeting.
Big Fish, Smaller Pond
Looking ahead, Dunlavey expects to save even more by moving the meeting to second-tier cities — the third plank in her cost-reduction plan.
“By 2009, we will be in second-tier cities and small convention centers,” she says. “It will cost us less because we are only going to cities that have favorable hotel and convention center packages.” From 2004 through 2007, BMES held its meeting in first-tier or expensive cities — Philadelphia, Baltimore, Chicago, and Los Angeles. In 2008 through 2010, the destinations are St. Louis, Pittsburgh, and Austin, Texas. In 2011, the organization is considering Providence, R.I., when in the past they would have gone to Boston. “It's just crazy to consider Boston, Chicago, maybe even Washington, D.C., now,” she says. Not only are F&B and other services cheaper in the smaller cities, they can negotiate better savings on meeting space and rooms.
She also finds the smaller cities hungry for their business. “We were such a small fish in a big pond in some of the larger cities that it was easy for them to ignore us and give us poor customer service. But when someone really wants you there and is working their hardest and negotiating their best for your business, you can expect good service.”
Through all these changes, attendance hasn't suffered. In fact, it's climbed steadily from 1,800 to 2,500 over the last few years. Likewise, meeting revenues have increased, which is critical because the meeting accounts for about 50 percent of BMES's annual revenues. However, Dunlavey knows that going to second-tier cities is a bit risky because they may not be the draw that some of the large cities are, and that potentially could hurt attendance. That's why BMES is planning to pour some of the savings earned the last few years into— something the organization had not done much of in the past. “We need the meeting to continue to grow,” she says.
And that is the ultimate goal — and trick — of cutting costs. Not simply reducing expenses, but doing so without stunting the growth of the meeting.
Eggleston's Big Idea
Eggleston took a different tack when, as the 2007 annual meeting in Toronto approached, ASM planning staff realized that something drastic had to be done. With gas prices rising, hotel rates going up, rental fees climbing, and vendor fees increasing, it was getting harder to hold down expenses. Yet, planners didn't want to give attendees sticker shock by jacking up registration fees or charging them for things they weren't used to paying for, explains Eggleston. And they didn't want to cut out any programs or services or markedly reduce the quality of the F&B or entertainment in a way that would sour attendees on the meeting. “You don't want to make it look like attendees are losing something,” he says. “So we had to think outside of those boxes. What are we going to do to keep costs down, yet allow the attendees to get the experience they want?” That was the question convention staff wrestled with as the meeting approached.
Ultimately, they came up with one big idea that would cut overall meeting costs by 30 percent to 40 percent, says Eggleston. The plan involved consolidating a large reception called “Division Night” — which traditionally occurred in several venues — under one roof. The 45,000-member society is made up of 27 divisions representing different specialties in the field. “For years, ASM has always had different social events for each division at the meeting and each gathering is very expensive,” explains Eggleston. Each event has its own F&B, entertainment, ancillary costs, transportation, even venue. The 27 events are held simultaneously in reception halls at five or six properties in the host city.
This year ASM merged it all into one huge gathering for all 10,500 attendees in a ballroom at the Toronto Metro Convention Centre. Because the 27 divisions fall into one of four large member groups, the hall was split into four distinct areas for each group. Each area had entertainment, F&B and networking areas, but there was also a main stage where everyone could mingle, eat, drink, and network.
Initially, there was some resistance to the idea. “People thought something was being taken away from them,” says Eggleston. But in the end, attendees were satisfied with the setup because it allowed them to maintain their own gathering, while providing the opportunity to network with others. ASM plans to do the same thing next year. And if any division decides to have their own reception elsewhere, they can, but they would have to pay for it themselves.
Overall, the association saved “several hundred thousand dollars” on the event, says Eggleston. Big savings came from having one F&Bwith bulk prices, one rental fee, fewer entertainers, and fewer staff on site to oversee the events. Perhaps the largest chunk of savings was in transportation costs because they didn't have to foot the bill to cart people to and from 27 different events at a handful of different venues.
Even so, because of high gas prices, transportation costs were higher than expected. For next year's meeting in Boston, transportation is a big focus. ASM is devising a strategy to minimize shuttle costs by strategically clustering events near hotels with the largest room blocks. The association is considering utilizing public transportation at future meetings.
In the end, the 2007 annual meeting had record attendance and low costs, a meeting planner's dream. “We got everything we wanted,” says Eggleston. “It cost less for the association, and attendees didn't see a huge hike in registration fees.”
In a planner survey conducted by' sister magazine, , respondents identified the most challenging areas in negotiating meeting costs.
Most Overpriced Meetings Areas
- Food and beverage
- Meeting space
- Service charges, fees
Most Difficult to Negotiate
- Air transportation
- Labor, general contractors
- Service charges
- Shipping, freight, courier, and postage
For more survey results, visit meetingsnet.com and do a keyword search for: New Alchemy.
Food & BeverageCost Savings Tips
Control the refills. On breaks, food service workers will often refill empty coffee urns to the top, even if there are only five minutes left in the break period. At some $90 a gallon, that's a lot of money going down the drain. Make sure they check with planning staff first before refilling, particularly in the last few minutes of the break. Tell food service personnel to open one bottle of red and one of white per table and fill glasses only on request.
Order bulk breakfasts. For continental breakfasts, order in bulk, not per-person packages. The packages often include more food than is necessary. For a full breakfast, offer buffet meals, not plated.
Negotiate bartender fees. If you agree to a beverage minimum, negotiate to eliminate the bartender fees if you meet the minimum.
Use stand-up tables. For receptions, use stand-up instead of sit-down tables. People are more likely to network, and they are less likely to hang around and drink and eat all night — saving you money.
Don't sweat the lines. At cocktail receptions, don't be afraid of having medium-length lines at the bar. Long lines are a no-no, but lines that are five or six deep encourage networking and discourage overindulging on cocktails.
Don't pay more for drinks. Whether it's a cash or a hosted bar, don't pay more for drinks than you pay in the hotel outlets (bars and restaurants). Use house brands of wine and cocktails. Also, ask about discontinued wine labels. If available, a discontinued label often can be a bargain compared to what's on the current wine list.
Lock in the menu prices. If the hotel will not provide a specific menu in advance, at least agree that the menu prices will not increase more than a fixed percentage per year.
Order as much as possible “on consumption.” Uneaten food and drink can be returned and not charged. This works well with soda and packaged foods like potato chips, but can also be done with perishables.
Thanks A Million
Thanks a million — dollars, that is. That's how much Vicky Betzig, CMP, a Brookfield, Wis.-based consultant and independent meeting planner, saved a client on food and beverage costs by simply tightening up the F&B guarantees.
Previously, the group had guaranteed “everybody for every meal,” she says. For a meeting of 6,000 people, that meant 6,000 breakfasts, 6,000 lunches, 6,000 dinners, every day — for five days. But when she dove into the history, demographics, and past behaviors, Betzig found that not everybody went to all the meals, particularly on the last day of the conference when people were leaving for home.
For a big group like that, it was almost a full-time job getting a handle on how much F&B to guarantee, says Betzig. But, it was well worth it. “The No. 1 way to cut costs in F&B is to spend the time and effort managing guarantees better.” Planners can also make attendees sign up for meals in advance and exchange a ticket for each meal.
- For tips on how to cut meeting costs, from room rates to transportation, visit meetingsnet.com, and do a keyword search for: 125 Ways to Save.