The case for regional meetings makes more (smaller) meetings a better fit for the bottom line than a singular large event.

One of the most profound changes that a nationwide U.S. auto service franchise company is making to its key annual meeting is to eliminate the meeting. The annual national franchise holder meeting just won’t happen in 2012. That’s with the advice and consent of Mark Lorimer, CMP, an independent California meeting and event planner whose group has represented the franchise company for years.

This big change doesn’t mean the company is abandoning the concept of face-to-face communications with its most important constituency—its franchise holders. If fact, the company has adopted a new strategy consisting of smaller, regional meetings that will not only increase in-person interaction with the franchise holders, but also do something else very important in these economic times: save a lot of money.

“The company is going to save between 20 percent and 25 percent by having three consecutive regional meetings in three locations around the U.S. instead of one big meeting that always involves significant airfare expenses and travel time for attendees who don’t happen to live and work near the meeting site,” said Lorimer, conference planner for the Eventive Group and past president of the MPI Orange County Chapter.

“Airfare is a considerable expense these days, and many companies are looking at the manner in which they hold their important meetings as a way to save significant amounts of money and still achieve their meeting goals,” he said.

Going to what Lorimer calls “a well-organized road show,” in which executives of the corporation travel to the regional meetings, not only saves big dollars on airfare—it is saving on hotel room nights as well, because attendees at the three regional meetings, who will be flying shorter distances and in some cases driving, will just need two to three room nights instead of three to four.

“So in this case it becomes less expensive to hold three 200-attendee meetings in a row instead of one 600-attendee event,” Lorimer said. “And because the size of the hotel needed for those regional meetings is smaller, it increases the number of hotels we can consider, and it allows us to look at second-tier cities that don’t necessarily have 600-room conference hotels as possible meeting destinations.”

The efficacy of smaller, regional meetings instead of larger annual, national or global meetings is gaining traction with corporations all over the world, according to a cross section of corporate and trade association meeting planners.

“I have major clients in the financial services industry and in the automotive industry, two sectors that have been doing regional meetings for a long time, and that have also been among the industry sectors most challenged by tough economic times,” said Toronto-based planner Kari Ann Larsen of Dragonfly Meeting Solutions. “And currently, companies in these sectors are taking a very close look at how they can fine tune regional meetings to achieve maximum impact and get the best value possible from their meeting budgets.

Larsen says that while the automotive industry is largely tied to centralized, national meetings for key functions such as new-model rollouts, it can certainly benefit from regional meetings for purposes such as employee training. The shorter distance employees have to travel, she notes, the less time they have to spend away from their jobs, where they are generating revenue for their companies.

And the banking sector, Larsen says, has long been attuned to the value of investing in communities throughout their service areas by holding meetings in those communities.

“It’s appreciated within those communities as a contribution to the local economy,” she said.

Among independent corporate meeting planners in North America, few would have a better perspective on regional meetings than Renee Ramo, who recently hung out her shingle as an independent after spending 16 years planning meetings for True Value hardware, where regional meetings are an essential part of the corporate culture.

“You really can’t over-emphasize how important and very much appreciated it is when the corporate leaders come out into the communities and spend time on face-to-face communication with the rank-and-file workers,” she said. “While if you have the budget, you can certainly bring rank-and-file workers into a giant corporate meeting, you can’t achieve the intimacy of the comfortable, communication-friendly atmosphere you get in smaller meetings. I have seen it over and over again, year after year, people just feel more valued by the corporation when its leaders are willing to come and talk to them in person.”

Global, Yet Regional

The regional meetings phenomenon that has evolved over the past few years is by no means limited to creating regions of states, provinces or even countries.

Suzanne Schlanger, CMP, managing director and co-owner of Los Angeles-based The SK Group Inc., which handles a large, international meeting clientele, says that even in terms of global companies and trade associations whose meetings attract attendees from all over the world, costs have driven a certain amount of regionalization.

“When you mention regions, I think of Europe, North America and Asia, as opposed to regions within the U.S.,” she said. “Because among some of my clients I have seen a certain amount of regionalization in which the regions actually involve multiple countries, but all in the same area of the world.”

Schlanger cites the case of a tech trade association that has been doing 90 meetings per year all over the world, and recently regionalized itself into groups of companies in North America, Europe and Asia, now holding 30 meetings a year in each region, with companies in each of those regions forming a consortium to fund those meetings.

“Those companies have found that they could achieve considerable savings in airfare and executive travel time by regionalizing their meetings in that manner,” she said.

In the U.S., the consortium has started bundling meetings that are in a specific time frame and holding them consecutively in one location—a kind of centralization of the bigger picture regionalization, Schlanger says. That practice provides an economy of scale by which cost savings can be achieved on hotel rooms, for instance, when a larger number of room nights at one hotel are being consumed than if the two “bundled” meetings we being held in two different locations.

“It becomes something of the best of both worlds,” she said, “achieving the costs savings of regionalization of the meetings, but then within those regions achieving another costs savings that can been achieved through the bargaining power that comes with consolidation.”

Planner Jennifer Altman, president of Corporate Event Consultants Inc., had a similar experience dividing the world into regions for customer summits for a U.S.-based international technology company that is her client.

“This really came straight from the feedback from the global summit the year before,” she said. “Customers’ evaluation forms showed that they wanted to spend more time communicating with the company’s executives and its engineers, who can best explain how to use their products.”

So Altman recommended that the company divide the world into regions for the 2012 customer summit process, holding a meeting in Miami for the North and South American customers, a meeting in Vienna that would combine European and Middle Eastern regions and in Bangkok for Asian customers.

“I was initially concerned that the company might be averse to all the travel that would be involved in having meetings around the world,” she said. “But their customers far prefer traveling shorter distances, and they really liked an atmosphere where the company executives could best explain how their products applied to specific, regional usages, so the multiple meetings concept worked out as a great success.”

Brian Stevens, president and CEO of ConferenceDirect, a company that plans and conducts 8,000 worldwide meetings each year, says regional meetings are a good solution for a lot of companies interested in reducing total meeting cost, but not necessarily a perfect fit for everyone.

“A key variable is just how much money your top executives earn, and if it is cost efficient to send them to three meetings in three regions based on what their time is worth,” he said. “If your meetings can be conducted by a tight road crew of 20 corporate people and you want to reach an audience of 5,000 people, the airfare alone makes it more cost efficient to move that road crew to three different places than to ask your 5,000 attendees from all over the continent to one place. But there are exceptions—we have one client whose CEO earns more money than some entire countries. Because of the value of his time, it becomes more cost efficient to have him go to one place and let the attendees come to him.”

One rule Stevens has learned over the years about meetings in general: Most attendees want the meeting destination to be close to them, no matter their salary. One+

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Calculating ROI on Regional Meetings and Trade Shows

How does a planner effectively show ROI for a regional meeting versus a national or global meeting before the event occurs? It’s really a relatively simple undertaking, according to those who are experienced at it.

“It all actually just comes down to dollars,” said Brian Stevens, president and CEO of ConferenceDirect, a worldwide meeting and event company. “It’s simply the spreadsheet approach.”

But the key, Stevens says, is that less-than-savvy planners don’t always know what to include on the cost spreadsheet.

“Planners have become really good at being aware of the fact that if you hold your meeting in Orlando, your coffee and muffin costs will be about half what they are in New York,” he said. “But what they fail to calculate into the equation with those muffins is total cost—not just room nights and airfare, but the cost you generate by having high-paid employees spend two days instead of one on an airplane to get to and from the meeting destination. Time is money, and planners who know how to calculate that can increase their standing with their corporate stakeholders.”

And sometimes it’s the really savvy planners who can project the anticipated ROI of an event based on the experience gained when other corporations chose similar strategies to what a client is considering, according to Tracy Stuckrath, CSEP, CMM, CHC, president and chief connecting officer of Thrive! Meetings & Events.

Stuckrath cites the example of a Georgia-based carpet manufacturer.

“They dropped out of the biggest national carpeting trade show because they felt it was not really producing buyers for them, and elected to go all over the country with their own regional trade shows in the specific locations of their existing customers,” Stuckrath said. “That move cost them around $1 million more a year than before, but they say it also paid off with a tenfold increase in sales. It’s a good example of how a bold regionalization plan that has a vision can really reap rewards.”

TAGS: business of meetings, events, One+ July 2012, profit, regional meetings