“Get more, for less!” It’s an all-too-common marketing line that is as predictable and hollow as “but wait, there’s more!” At this point, it probably goes in one ear and right out the other. You know that doing less is only going to get you less. But what if instead, you heard “get more, for the same!” Your ears might perk up, because now they’re speaking the language of an event manager.
Often times in the events industry, managers try to boost their profits by pumping more time and resources into their revenue generators – sales, bookings, and services. Too often, however, the extra time and resources end up costing more than the revenue they generate. Yet, when managers and venues scale back on resources and time, they watch their revenue disproportionately plummet due to dissatisfied customers and stalled sales communications.
So what’s the solution to this catch-22? Don’t put more into what you give, gain more out of what you get! When your operations are smarter, you can increase your revenue without increasing your costs.
We call revenue that “should have been” revenue that “slipped through the cracks.” And every venue has it. Genpact.com estimates that 7-12% of revenue in working capital is “stuck” somewhere in inefficient Order-to-Cash processes at top global organizations – and the events industry experiences far more opportunities for revenue to get “stuck” than most businesses do.
Here are some tips to help spot and plug leaks so you can increase your revenue without increasing your costs.
Troubleshoot Your Invoice Process
If you’ve ever played the game “telephone,” you know just how different a phrase or story can become once it’s had to go through dozens of people. Now, imagine a game of telephone where days go by between each player passing the message to the next. Think of your invoice as a message in a multi-day game of telephone. It gets passed from department to department and with each new person it passes through, you run the risk of it changing. A detail gets forgotten here, a number gets reduced there and suddenly the “message” your customer gets is only 85% of what it initially was. And it could be even less – entrepreneur.com estimates that anywhere from 2-20% of revenue may be missed in the process of going from initial sale to your bottom line!
Analyze the process that your revenue takes and decide if any of those steps can be skipped or consolidated. You might even elect to establish “checks” that momentarily pause the process to reconcile any changes that have happened.
Provide Great Service, Receive Great Customers
In the events industry, relationships are at the heart of your business. Your most profitable events often come from repeat customers receiving repeatedly great service. But it’s a two-way street. When you provide as promised, your business should expect to be compensated as promised. According to genpact.com, “It is essential to track customer payment behavior, as it reflects both risk levels and your ability to convert cash more effectively. Things like broken promises and material deductions should generate red flags and trigger appropriate escalations and required sign-offs.” In other words, if you’ve already made it a habit to deliver flawless events, go ahead and make it a habit to track and record that your customers deliver discrepancy-free payments as well.
Not only could repeatedly dodgy customers give you less money than you’ve earned, you could also be sacrificing space that a better and more profitable customer would otherwise use! Your customers are your best asset. You wouldn’t keep putting money into an asset that isn’t generating a consistent return, so why would your customers be any different?
Let Technology Have Your Back – And Your Frustration
Data entry, like most menial tasks, carries a risk of simple mistakes that could lead to minor revenue leaks. After all, neither you or your staff can be expected to maintain perfect focus when dealing with the tediousness of data entry, or worse, data RE-entry. But minor revenue leaks can become a revenue pipe burst when they lead to dissatisfied customers. That’s why utilizing a software system to track and record all of your data and processes can be so valuable. Not only can a software system boost your revenue by billing more with fewer comped services, it also prevents the kinds of mistakes that could lead to revenue hemorrhaging.
Consider what areas of your business could benefit the most from adopting a quicker, more accurate process, then explore the potential software solutions. Not only will your balance sheet thank you, but your peace of mind will too.
The biggest revenue leaks come from leaving money on the table and from having inefficient processes that lead to lost opportunities. The first step in catching your revenue leaks is to take a step back and look at every aspect of your business under a microscope. You don’t have to put more resources into your business to get more out of it, you just need to look closer.