How Do You Make Money on Your Events?
PS I'm launching my new course Events that Convert in March and I'd love to see you there. If 2018 is the year you start bringing on events into your marketing strategy, drop your email below for the cheat sheet, or hop on over the the site linked above to read all about it!
As I write this to you, I’m on an airplane, somewhere over the Northwestern Territories, and I’m listening to a podcast called Afford Anything (love Paula, love learning about real estate investing). I spent the past two weeks traveling with Tori Pintar and made her listen to investing podcasts, business podcasts, read her frugality articles, and basically annoyed the shit out of her by talking incessantly about money.
When I’m deciding on making a big business decision, I create a financial model (a quick napkin equation works well, too). I’m in my money every day, which is how I can calculate the ROI of the events that I’ve hosted, as well as the ones that my clients have hosted
Which means I don’t plan my own events, nor do I help my clients plan events, that lose money (at least in the long run). It is vital to me that if events are to be a strong part of your strategy (which I think is a really good goal for a lot of businesses), that they need to be profitable.
But how do we do that, when events are 9,000x more expensive than, say, a free webinar?
You are absolutely allowed to sell an event in advance to gain interest to see if it’s a winner. Sometimes, you’ll need to put down a deposit on a space (which I recommend negotiating as low as you POSSIBLY can) in order to convince people of its legitimacy (it’s very hard to sell an event to a TBD location in a TBD city), but often, that’s a few hundred dollars at most, and if you can’t afford that, then you can’t afford hosting a paid event (more on that below).
Have an offer.
Team, it is CRUCIAL to have a way for someone to work with you after your event. Even if it’s only ONE person out of 30 that hire you, it is worth it. I don’t care if you make an offer up on the spot, or only have ONE way for people to work with you, the point of events is to build really great relational capital so that people can eventually hire you. If you are Tony Robbins, and you are charging $2,000 per person, then you can relax on the offer at the end (even though Tony doesn’t actually do that, he sells like a maniac), but your revenue stream should be directly tied to HOW someone can continue their relationship with you in the longterm. If you’re just trying to get people in the door and don’t have a way to cultivate them, then we probably need to consider where you are in your business and whether or not events are right for you.
Plan for 50% of ticket sales to cover 100% of costs.
This is simply my “napkin math” which gives me a starting point, but if you’re planning on making a 10% profit if you sell every ticket then I would recommend you revise your strategy.
A free event has lots of possibility.
I always believe in charging for your events, but there’s nothing wrong with hosting a free event to start cultivating your audience. As you’ll learn in Events That Convert, I personally like hosting free events in my house (or a friend’s house) with 10 or fewer members. It lets me test my idea, ask specific questions, and then THOSE people are the ones who are prime candidates to a) be a part of my ensuing paid offer or b) help me spread the word about how AWESOME I am at helping people with whatever the thing is that I’ve formed the group around. Again, it’s crucial to eventually have an offer, but this is definitely one way to start building the community.
Spend on experiences that are REALLY going to impact your attendees.
I often see events that are gorgeously designed and have GREAT web presences, but have heard (and seen) that they don’t have great substance. While I think having gorgeous photos taken is important, it’s also important that people have a GREAT time, which can be reflected in photos (which are actually better to exemplify a great event online). So when you’re considering whether to spend on floral arrangements or great food, I’d recommend the food, and stick to great swag that is helpful for people. Same with good quality audio equipment, a coat check if it’s raining, and swag that is helpful. You want people to feel truly taken care of, and while décor is important to create an atmosphere, you want to be sure you’re taking care of the other basic needs first.
The money of events is super important, which is why I’m excited to do a whole module on budgeting and preparation in my upcoming course Events That Convert. If hosting an event is on your list for 2018, this course is by far the only one out there that is as comprehensive, detailed, and comes with 10+ years of experience planning events that help businesses grow.
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