Radario
Modern Approach to the
Economy of Events


August 2, 2017
American cultural and entertainment market is great and diverse. Thousands of events are held every day, attended by hundreds of thousands of people. At the same time, the process of event organizing is often viewed as a one-time project work. And only the largest promoters and sites think globally and approach this process in a comprehensive manner.
Conventional Approach
Traditionally, in the entertainment industry, economy is built from event to event. For example, you have about 20 events scheduled for a year, and you plan to earn, say, 1 million rubles from selling tickets to each of them. At the same time, fixed costs per event are 3 500 USD, and it is planned to spend 5 000 USD on marketing, and don't forget about the salary for your staff, etc.

You must know it. It is clear that the real world is somewhat more complicated, but the essence boils down to the fact that each event is often viewed as a separate project, including promotion and communication with the audience. Besides, rarely is regular audience taken into account when promoting and planning the budget. "Well, these will come anyway" is a standard attitude to this kind of viewers.

Pros of the approach:

· simple forecasting and justification of expenses
· easy management

Cons of the approach:

· Poor forecasting of attendance risks
· Inefficient use of advertising and low personalization
· Audience database is not developing (relevant for sponsors)
· The possibility of additional sales to the loyal audience is not taken into account

The way to a user's heart is through the data.
Modern Approach
Even at the end of the last century it was hardly imaginable how one could systematically develop not only a simple contact database for all the clients, but also keep and process information about purchases, transactions, mailing, and so on.

Nowadays technologies (including Radario technologies) allow us to drastically reconsider the economy of events. Modern approach implies that, developing a client base, you can cluster according to the average basket, number your events attended and other parameters.
Nowadays technologies allow us to drastically reconsider the economy of events
This allows you to significantly optimize the cost of marketing, as well as increase the loyalty of your customers. Moreover, today high competition and the tendency to save budgets make it extremely difficult to attract a sponsor / partner for your event on commercial terms if you do not have a most detailed (and confirmed by data and figures) information about your viewers.

Pros of the approach:

· The possibility of a significant increase in profits
· A significant reduction in advertising and marketing costs
· A detailed understanding of the audience and their needs
· Determining the effectiveness of promotion channels

Cons of approach:

· It is necessary that someone in a team at least roughly understands what the audience base and purchase funnel are.
· You must work.

How to have a full-house
Gather your audience – get connected to a viewer – expand the base of your customers – launch a viewer loyalty program.

A Clear Example

You are an event organizer, while you do not have any customer base. You will organize an event for 1000 people, with a ticket price being 15 USD. You are selling tickets directly on your site, advertising costs are 5 000 USD (that is, 5 USD to attract one viewer). In the end you sell all the tickets and get the audience base featuring contact (e-mail) and other information such as the cost and amount of purchases, the basket cost, etc.

Then you organize another event. The usual practice of holding events suggests that you just need to copy the budget model of the first event, as if it worked out once, it will work out again. However, if you have a database, it usually implies the following. Some percentage of viewers will be eager to return to you (or recommend the event to their friends), which will allow you to save money on attracting customers.

How? It's easy to check! We launch a special offer (for example, a 5% discount), mailing it to the viewers from the database and offering to buy tickets at a lower price. Suppose that 40% of viewers buy tickets, taking advantage of the discount (400 tickets in total). So, you will already save 1 500 USD.

Those organizers who will be the first to master the tools for collecting and analyzing databases will enjoy a clear competitive advantage
How come? Judging by your first event, you know that every new customer costs you 5 USD. In total, you spent 5 000 USD (the total budget for attracting 1,000 customers). Accordingly, if you sell 40% of tickets without buying ads, you save 300,000 * 40% = 2 000 USD. The downside is that you lose profit because of the discount, which makes 400 tickets * 15 USD * 5% = 300 USD. In total, you save 1 500 USD only thanks to repeated purchases.
Your task is to ensure that those who paid you money once continue to do this for as long as possible, so that your expenses for attracting this viewer pay off many times over
Furthermore, you need to sell 600 tickets with the remaining 4 700 USD of the total marketing budget (minus 300 USD for discounts). That is, you can either spend 7 USD (instead of 5) on attracting each new customer, or spend 1 500 USD you saved to develop the project. Later your task will be to ensure that those who paid you money once continue to do this for as long as possible, so that your expenses for attracting this viewer pay off many times over.

If any conclusion can be drawn, it is as follows. Those organizers who will be the first to master the tools for collecting and analyzing databases will enjoy a clear competitive advantage both in terms of price and improving the customer loyalty.

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