Pricing transparency is one of those hot topics in the events industry. And while everyone knows its importance, not everyone is willing to talk about it. Or to acknowledge that there are plenty of underlying issues related to it. So what better place to start the conversation than Event Brew, the most unapologetic podcast in the industry? Because we only to drink the tea but spill it too – whether it is wages or controversial speakers you have our honest opinions.
So this week, we welcome three members of the Brew Crew. As per usual, Will Curran, Nick Borelli, and Thuy Diep are here to share their opinions and get your brain cells into thinking mode. Make sure you have your drink of choice close by because it’s brewing o’clock – and this time around, it’s all about pricing transparency in the events industry!
Click here for the full audio transcription.
Pricing Transparency: The Stands
To kickstart the conversation of pricing transparency in the events industry, each of our hosts let us know where they stand on the subject. “I’m of the Aaron Kaufman School of pricing transparency, says Nick. “I’ve seen him speak all over the world. And one of the things he talks about a lot is pricing transparency. And he converted me to this, which is 100% open book transparency”.
“This is where you show every dime that you’re spending with your suppliers and someone else could purchase their services at the same price. It’s like there’s straight pricing. If he gets any kind of discount, he lets them know in writing on every contract that that is a thing that could happen. It’s his business between them and him, as far as if he gets any kind of discount over using them lots of times. But ultimately the prices are no different listed than what someone else could purchase them from”.
Different Perspective
“It’s not that I’m anti-transparency, but I’m pro-partner with my supplier partners”, says Thuy. “And I’m wanting to protect our working relationship. So I’m going to go into different models in which you do show your pricing, whether that’s component pricing, cost plus margin. And I’m also going to discuss why in certain categories, I do not share with the client the rates that our supplier partners give us for constantly working with them”.
“And I’ve lost business before. Just the team standing up for not sharing the rates that certain suppliers would give us”, she adds. “But there are options that I’m working on right now where when it comes to let’s say restaurants, we will give you just the straight rates. Because we’re only just doing a reservation fee and we’re going to pass you on directly. So yeah, I’m like, mostly I’m not, but there are certain scenarios where I will”.
Pricing Transparency Hybrid
“I’m probably a little bit a hybrid of both”, says Will. “So in cases where clients are asking me to do something that might be outside our normal wheelhouse, I might tell them, “Look, I’ll do this for you and take care of it and manage it for you. But I’m going to put a markup on it.” I don’t typically tell them the exact number. I also make sure that they know that they’re probably going to be paying a little bit more, but you’re paying for that kind of ease of comfort and whatnot”.
“And then in the AV industry, it’s really interesting, because the industry sub rents like crazy. Everyone rents gear from each other”, he continues. “And I think it’s also just because, in the AV industry, everyone wants to kind of commoditize everything in some ways too. Where if they see the price of a projector go up by 100 bucks, they’re going to be like, “Why did it go up 100 bucks?” You’d just be like, “It just got more expensive.” Time has passed or whatever it may be”.
The Cost Sharing Debacle
“I was thinking about how much of our industry doesn’t tell people what to expect when it comes to price until everything’s been quoted out”, says Will. “Like we always say, well, you need to get a quote, you need to quote everything out. But how many times do you know that you’ve called a supplier and they will straight up say, “What’s your budget? No, we’re not a good fit. You need to spend at least $40,000 with us to do that sort of thing?”.
Thuy has been in that situation. “It doesn’t happen often, because, at the end of the day, people want to make the sale. But there have been opportunities where I bid it out and people have said thank you, but due to either turnaround or budget or not being able to source those things or not having it in their warehouse, we’re going to decline the bid. And I actually respect that”.
Pricing Transparency & Relationships
Nick also respects this stance and adds that “I wish there was a lot more of, “We’re overbooked for that period of time. We still want to be your partner.” I see a lot of people who don’t believe that their partnerships are strong enough to be able to be transparent with the people that are their clients, internally within the events. The people that are sub hiring them. They feel like if they don’t say yes to everything, that for some reason that they’ll just go to someone else”.
“Like, yes, they will use someone else because they need to in that instance. But the idea that they would use somebody else forever with one opportunity like that, I think most planners are smarter than that. I think they would value honesty. And not give up the relationship”, he adds.
Pricing Transparency & Lying: Where’s The Line?
“It’s hard-line. It’s the hardest line that I’ve come across”, says Nick in relation to Kaufman’s philosophy. “And I’m generally in the gray area. In that one, it took years, but he converted me to it. The part that resonated the most with me is the fact that he is standing up for the work that he does. Basically the transparency is with the client. This is how I make money. It’s not the markup. I make money by being paid for the work that I do, which is a creative work, which should be assigned a dollar amount”.
“And that’s I think the real hard line for me”, he adds. “Too many of us emphasize the commodities of what we do as being where the most amount of dollar value is assigned to, in some kind of vague way. And not enough on all the intangibles that we do. And I am in a world where what I offer events is exclusively intangible services. So when someone is advocating for the prices of intangibility being basically assigned dollar values, then you have my attention”.
Tangible Vs Intangible
Nick believes that “the discipline of assigning dollar values to intangibles is really important. Because it stands up for a lot of the majority of the work that we do as creatives”. And on this note, Will adds that “it also gives people the opportunity to see everything that’s going in. I hate getting those simplified quotes. I just want to see everything I’m getting and know what I’m getting ahead of time. And I think far too often we leave out pre-production which is like all the work we do ahead of time and design and everything like that”.
“My thing is that you should get paid for the work that you actually do”, adds Nick. “And inflating the tangibles isn’t what we do. We provide you the intangibles. If you want to see what that would cost you to do that, that’s fine, here it is. But that’s not what we do as designers, as planners, or even in a supplier world as creatives”.
“More AV companies should assign a dollar value to the creative work that they do. The amount of time that they put in for the actual design work and creativity and all the other intangibles that are present. And if we all did that, we would find out that we would have unique selling propositions that would be a little bit stronger. You would understand why I do business with one versus another. And we would be standing up for the differences between a bunch of people who just take prices and inflate them”.
How Much Of A Role Should Information Play?
Will wants to know Thuy’s and Nick’s take on his new strategy. “One thing that we did is, it used to be that for every company, we had a “request quote” button at the top. And you click that, give us your information, talk to a salesperson. And so we replaced it with a get pricing button. It said that if you want to start a conversation you have to be at least willing to spend this. And then also answered a bunch of questions that people always asked”.
“Like when can you get me a quote? How does the quoting process work? Can you beat this vendor? So we built a calculator where you can basically put in a bunch of specs. The kind of questions that we usually asked in order to put out a quote. It gives you at least a rough number to kind of start with. Do you guys feel like that transparency level is good or do you think we need to put it behind a salesperson more?”, he asks.
Thuy’s Opinion
“I like that you’re trying to find a solution”, she says. “I would say there’s one thing that irks me about supplier partners. So I have a template in which I send our RFP, request for proposal out. And it’s the same thing. It’s how I keep organized. It’s really detailed. And it irks me when I send an RFP and a supplier partner comes back and says, “Hey, can you fill out our form instead?” And I just cannot make time for that. But, how you did it was really great because it’s instant”.
“And you’re like directing us. Also when it comes to supplier partner relationships, I also need to trust who I’m working with as well”, she adds. “So I do need that human interaction. And a lot of times when I’m in a rush, that’s when I’ll pick up the phone. And I’ll say hey, walk me through, this is what I need. I don’t have time to even write it in an email. Can you send me back the quote because we are a deadline-driven industry? And I might think I need something but you’re the expert, and that’s why I work with a handful of selected trusted supplier partners, vendors”.
Nick’s Take
“You’re basically just like, we have a goldilocks zone. And if you meet those requirements then we’re a good fit. Versus, if you’ve got some money, you’re a good fit. Those are two different models”, says Nick. “You’re showing all your intangibles here which I think is cool. People understand that they’re paying for those intangibles, that they’re of value. I think that you can make an argument of some kind of rough tiering of the kind of stuff that generally goes with these kinds of shows. Movers or you can get more of a collection of things that are common for that so people know that there are some tangible assets. The calculator thing is really unique”.
Pricing Transparency: Post-Event Add Ons
“So obviously a lot our industry is quote first and then you get invoiced later”, says Will. “And depending on when the invoices are due, sometimes there’s always usually an invoice after the event or maybe right before the event. I think the thing that irks me the most is AV companies who say, “Okay here’s our quote, here’s where we’re going to do this.” And then after the event, you get a bill for like $10,000 more and it’s nothing changed. The event didn’t change at all”.
“But I’ve also seen the less malicious one. This is when they have inexperienced people quoting the quotes out and they don’t do the right scope. And they say, “Here’s what you need. Yes, you’re all good to go.” But they’re underquoting labor. They’re underquoting the gear. Things like that. And then because of that, afterward someone is like, “Oh dude, you underquoted. Oh, dude, we’re going to lose so much money off of this. I guess we’ll just bill them afterward.” That’s a little bit less malicious than we’re for sure just going to throw an invoice and bill them after”.
Entering Unethical Territory?
“So talking about pricing transparency. I’ve always been taught when it comes to clients, there’s no hidden fee”, says Thuy. “Everything is all-inclusive pricing as well to our clients. Including tax, gratuity. All of that stuff is in there. We don’t necessarily break it out. We itemize it, but we don’t package it, so you can see that. And even if it’s an estimate, we state that it’s an estimate. Because we do not want to surprise the client during the final invoicing. If the supply partners did that to me, I would be furious. If you were to just invoice me and I’m like where’s this extra $10,000? I’m going to be pissed. I think that’s so unethical”.
“And I would not work with them again. Because at that point you’re not being a good partner. We’re not being good partners to each other. And it’s one thing if it’s like no one saw it coming or I wasn’t educated on maybe a certain permit or something. But that’s why I rely on partners to educate me on that. Because I know a little bit about everything, I don’t know all in one specific category. So pricing transparency in that sense, letting clients know the end-user, that this is what you get, there are no hidden surprises. We just want to be honest and transparent with you in that sense”.
Beyond AV
Obviously, AV companies aren’t the only ones that should be considered in a conversation about pricing transparency. As Will states, DMCs are also pretty notorious. “It’s not like they’re all bad, but there is the most amount of jazz, let’s say, in how they price”, says Nick. “And I think there’s a lot of flexibility and there’s a lot of putting a bunch of things together. If you put 40 things together and you make a dollar on 40 things, it’s a good way to make a living. Versus the idea that I believe DMCs real business is that they are creatives doing creative work and footwork, those two things, on behalf of the client. That’s their line of business. That’s what they do. And the rest of it is opportunities for them to take advantage of business relationships. But that’s not what they do for a living. I know it might seem esoteric, but it matters to me”.
When it comes to graphic design and content design work, a lot of times scope is vague, you don’t know what you’re doing”, says Will. “Because you’re not getting an invoice every day saying, “I spent five hours on this.” It’s like all of a sudden two weeks go by and boom, “Oh, by the way, I am five hours away from hitting budget.” And you’re like, “Oh my gosh. We still have so much more work to do. This is not okay.” And you don’t have a good idea of pace and things like that”.
A Big Industry Issue…
“Another thing that we kind of suck at in our industry is, we don’t have actual agreements on work”, says Thuy. “You’re guaranteed the business before we even see your creativity. We’re doing a lot of bidding and at any point, you can just lose the whole entire program. All the hours of putting everything together, getting quotes, bidding, and then they say no thank you. That’s also a bummer. Because you put so much. And that’s just the cost of doing business in our industry”.
“Everyone’s afraid they’re going to lose business”, adds Will. “And the problem is our quotes are also our plans for how we’re going to execute the work. Like in other businesses, you get quotes on prices and things like that, and then you start talking about logistics, and then that price evolves based on those logistics on there. But I’m thinking everyone needs to get to the point where it’s like, hey, we got to pay a little bit of money to invest in this to make it worth the time to put more detail into this work. And all the time when we’re doing our quotes we spent a lot of time making sure it’s a plan”.
How Nick Does Business
Nick’s case is somewhat different. “I spent two weeks working on a bid. And I bill. It’s part of my retainer. Bidding is expensive. It’s a gamble. And you win some and you lose some. And hopefully, your closing percentage and your ability to know which are the right things for you allow you to weather that storm and make the gambles worthwhile. So the gamble’s always going to be there. I just think it comes down to once there’s a line of where you’ve given creative over to the client before you’ve chosen, I think that you do yourself a disservice. Ultimately the best-case scenario is that you can say, “Here’s who we are. Here’s who’s on our team. And here’s our win-loss record. Do you want us?” And that’s the pitch. Like the best of the best. That’s not everybody”.
Pricing Transparency: The Closing Statement
And finishing up our debate about pricing transparency is Thuy Diep, with some solid advice. “Don’t short yourself. It comes down to ethics for me. It comes to who I am, how I want to do business. Do I want to nickel and dime you? No. Do I have a sales goal? No. I’m not making commissions off this. My goal, my objective, my vision through this is honestly, how can I best provide you peace of mind and what the client experience will look like. That’s really, at the end of the day, that’s rewarding if that gets accomplished”.
“You have to look at everyone that’s in the partnership too and if it’s just the right fit at that point. Whether that’s meshing with personalities or everyone’s goals are in alignment. Because sometimes we’ll just turn down opportunities for X, Y, and Z. So please don’t be afraid to do that. Don’t be so hungry where you’re kicking yourself in the foot at 2:00 a.m. still working on things. Or you’re not feeling respected back. At the end of the day, that isn’t worth it”.
Conclusions
And that’s a wrap on this week’s episode of Event Brew! So, what’s your hot take on pricing transparency in the events industry? Do you agree with the points made by our hosts? Make sure you let us know, and don’t forget to tune in next week for some more exciting conversations and incredible topics!
