May 2002

Life Cycle of a Show

Making the most of the opportunities at every stage — from launch to maturity

By Martha Collins

Everyone understands the life cycles science teachers illustrate: A creature emerges from its larval state, grows, matures, reaches adult status, and eventually dies. An exhibition is a dynamic business that goes through many of the same stages, each with unique characteristics. For shows, each stage of the life cycle represents a specific span of the cycle with its

own profit possibilities. Where is your show today, and where is it going? Learn how to make the most of the opportunities at each stage and manage a show successfully through a long and profitable lifetime.

Launch
In the current economy, few organizations can afford to launch a show and wait a couple of years for it to take hold. The expectation today is that the show will provide at least some profit the first year, followed by a rapid growth stage. Adequate time for market research and early planning are essential to launching a show on the road to such long-term success.

“I’ve had much shorter launch times, but I prefer at least 18 months. With a shorter window, your options are greatly reduced for everything from available sites and dates to exhibit sales and attendance promotion,” says John Gallagher, Vice President of E.J. Krause & Associates Inc., a Bethesda, MD-based exhibition management company producing more than 80 trade and public shows in 16 industries worldwide.

The time spent on research and early negotiations was critical to Krause’s decision to launch Expo Yate Mundial, a consumer boat show, in Mexico City this November. First, market research confirmed that despite being miles from the coast, Mexico City is a better location for the event because of the buying power of the local population. Next, Krause engaged the National Marine Manufacturers Association, an organization with both a solid exhibitor base and boat show experience, as a partner. Finally, the company secured dates at the city’s new Centro de Exposiciones.

“All of this is done within the first few months of that 18-month time frame,” says Gallagher. “Then, once exhibit sales goals are met, we continue to concentrate on audience promotion to make sure we deliver what we’ve promised for exhibitors.”

For both trade and consumer shows, attracting the best possible audience to the very first show can be the key to successfully moving to the next stage, says Gallagher. “You can sell an exhibitor a booth once, but if you don’t pull in a good audience, you make it extremely difficult to do it again,” he says.

Early Rapid Growth
The early years in a show’s life cycle, when exhibitor rebook rates are strong and attendee support is solid, are marked by opportunities for rapid growth. But this is also the stage at which a show is particularly vulnerable to problems resulting from sudden changes in market conditions.

“Ten percent growth (in attendance and exhibit space) from the first to the second year would be a good start,” says Gallagher. “And when you get to the point where you’re in a 70 percent rebook rate for your event, everything else moves so much more smoothly. It puts momentum behind your sales and marketing efforts and sponsorships. You have a proven track record with a solid exhibitor base, and you can expand aggressively.”

Feedback from attendee and exhibitor surveys is extremely important at this stage because the information enables you to fine-tune your event to the point where it becomes the key meeting place for that industry in that particular country, Gallagher says.

No matter how promising the prospects for growth may be, however, at this critical stage the kinds of adverse conditions that market research can’t predict can have a devastating effect. “Over the years, we’ve seen a number of dramatic market forces affect our shows,” says Gallagher. “For example, we’re doing a number of events in Argentina, and we’ve had to drastically scale that back as their economy has gone through problems. Those are things that we couldn’t have foreseen a few years ago. We’re not pulling out of Argentina. We’re hopeful things will turn around, and we’re committed to that market. But obviously, adjustments need to be made in our expectations over the next couple of years.”

E.J. Krause faced a similar dilemma during the company’s early years of developing shows in China, when travel was restricted during and after the Tiananmen Square incident. But the company remained committed to that market because “then you have a reputation with both your show partners and people in the industry that you’re in it for the long haul,” Gallagher says.

Sustained Growth
A period of rapid growth is usually followed by a time of slower, steadier increases. At this stage, the challenge is to continue to provide a valuable experience for attendees and meet the needs of established exhibitors while also growing the show.

The Religious Conference Management Association (RCMA) has developed a formula for doing just that. RCMA held its first annual conference in 1973, added tabletop exhibits in 1981, and filled a separate hall with exhibits by 1983. Since then, RCMA has controlled exhibition growth in an effort to create an optimal business environment for both meeting planner attendees and suppliers.

“RCMA members come to the exhibition to do business. They represent more than 14,500 conventions and meetings a year worldwide, which attract 18 million attendees,” says DeWayne Woodring, Executive Director and CEO of the Indianapolis, IN-based association.

“We believe that there should be an appropriate ratio between the suppliers and the planners. We only increase the size of the trade show if we anticipate that we will have an increase in the number of religious meeting planner attendees. We do not want anyone to participate in the trade show as an exhibitor and feel that they did not have an appropriate number of meeting planners to talk to,” says Woodring. “We try to aim it around two to one — two suppliers to one meeting planner works well.” Each booth may be staffed by as many as three supplier representatives (for example, one each from a city’s convention bureau, convention center and a hotel), all of whom can meet with a planner at once.

Since RCMA adopted this strategy in 1984, the exhibition has grown steadily and sales are brisk. “A general mailing for the January conference goes to exhibitors on Sept. 1st, and the entire exposition is sold out by the morning of Sept. 10th,” Woodring says. This year’s event attracted a record 1,378 attendees (including exhibitors), a 7 percent increase over 2001.

Stability
A well-managed show can maintain a stable position in its market for years. While this stage of a show’s life cycle may be marked by little or no growth, it can nonetheless be a long period of steady profits. For many shows, this is the period of greatest strength. The show is the largest and strongest it will ever be.

Still, savvy show managers are always looking for new market niches and better ways to serve their industry to avoid becoming stagnant. The National Electric Sign Association’s annual show enjoyed an exceptionally long period of stability before taking off in an entirely new direction. The association launched a trade show in 1946, eventually growing it to 100 booths and 1,800 attendees. It remained that size for 25 years.

Then, in 1984, a separate segment of the industry was revolutionized when new computer-aided technology for the plotter-cutting sign business presented opportunities for rapid growth. “The plotter-cutting industry and the electric sign industry were really two distinct markets. But rather than continuing to focus just on the electric market, we broadened our scope to incorporate all aspects of the sign industry and changed the name to the International Sign Association,” says K. Brian McNamara, Senior Vice President of the Alexandria, VA-based organization. “That was the beginning of a new period of rapid growth.” The 56th Annual International Sign Expo in April 2002 had more than 1,200 booths and 16,000 attendees.

“If you’ve tapped your audience, have a fair market share, and there’s no way to expand in your industry or into related industries, you’re stable and in danger of becoming stagnant. Without industry innovations, it’s difficult to expand. We embrace changes in our show and, in fact, search for change,” says McNamara, who advises trade show managers to always plan space for growth so no exhibitor is turned away. “The one exhibitor you refuse could be the source of the turnaround for your show and your industry. You never know where the innovations might come from.”

Maturity
A show exists to meet the needs of the industry it serves. As those needs change over time, the changes will be reflected in the show, including factors that result in loss of attendees, exhibitors or both. Even well-established, long-running shows may close in response to market forces.

For an independent show organizer, the decision to close a show is a matter of economics. When the show is no longer profitable, it’s time to fold. For an association show, the decision is more complicated because the exhibition, in addition to providing a major source of operating revenue, is usually tied to the association’s annual meeting.
That was the dilemma facing the Radio-Television News Directors Association (RTNDA) as consolidation in the broadcast industry, coupled with the weakening economy, resulted in a steady decline in attendees. “Our attendance decreased every year over a four-year period,” says Rick Osmanski, Vice President of Washington, DC-based RTNDA. Then, the association’s 56th annual conference and exhibition, scheduled to open Sept. 12, 2001, had to be canceled in the wake of the terrorist attacks. The cancellation put additional financial pressure on RTNDA, which relies on revenue from the event for half of its
annual budget.

In January, RTNDA signed an agreement with the National Association of Broadcasters (NAB) to partner their shows for the next five years. NAB will sell and manage the combined show. The two shows already had many of the same exhibitors, and now those exhibitors will have decision-makers from two segments of the industry walking the show floor. Conference programs of both associations will be open to all attendees.

“Partnering made sense in a lot of ways. We never considered canceling because the conference and exhibition is so vital to our members,” says Osmanski. “We looked for an opportunity to continue the show and do it more efficiently, to decrease expenses and offer more value for both exhibitors and attendees.”

Every show is different and progresses through each stage of the life cycle for different lengths of time. In the end, when the needs of exhibitors and attendees and the dynamics of the market change, the show closes. That can happen at any time, but for a show that successfully navigates each stage of its life cycle, it should occur only after many profitable years.

Martha Collins, a freelance writer and editor based in Austin, TX, is a frequent EXPO contributor. She is co-managing editor of Professional Meeting Management 4th Edition, to be published this month by the Professional Convention Management Association.