The Great Reset

Rethinking the role of in-person events in your post-crisis client engagement strategy.

Within weeks, employees will cautiously begin to return to offices at investment management firms, led by staff on trading desks. But with visitor access limited and business travel banned, it will many months before in-person client meetings resume. And probably last to return will be events and conferences—“the ultimate super-spreader activity,” as one agency head put it last week.

To date, the focus of the post-crisis event discussion has been on how they’ll work. When events do restart, will they need to feature “medical-grade disinfecting UV lights, cleaning robots, on-site telemedicine, fever sensors, and buckets of hand sanitizer,” as one blog predicted? And what sort of programming will it take to lure people out of their home offices and back into hotel conference rooms? The consensus is that the bar has been raised by the crisis: the promise of a free lunch and face-to-face networking won’t be enough.

But these discussions are an exercise in wishful thinking—one that ignores the intense scrutiny that in-person events face as firms plan their re-entry. The reality is that conferences confront a perfect storm of challenges beyond concerns about contact risk, from travel restrictions and venue suitability to virtual alternatives—not to mention crisis-driven cost-cutting and an urgent focus on revenue generation at many firms.

The abrupt suspension of events is affording firms an unprecedented opportunity to isolate their impact on revenue and their actual role in client engagement.

Those assuming that event programs will simply snap back come September, or even in January, may be in for a rude awakening. As recently as mid-May, less than a quarter of in-person 2H events had been cancelled or moved online, according to data from Function4, which tracks events across financial services worldwide. Chart 1. (This may appear almost delusional—analogous, maybe, to the US states that are defiantly re-opening despite spiking infection rates—but has more to do with the economics of the events industry, as we discuss below.)

The abrupt suspension of events is affording firms an unprecedented opportunity to isolate their impact on revenue and their actual role in client engagement. And the sad reality is that at most firms, there has been surprisingly little rigor in their selection—especially when one considers that event spend is among the top costs in the marketing budget, and a large chunk of a firm’s T&E expense.

Instead of defaulting to a physical event as a potential networking opportunity, each should be evaluated as a component of the firm’s broader client engagement strategy.

Detailed analytics are typically required these days to justify any large marketing spend—advertising, marketing tech, consulting, etc. The glaring exception is events: at many firms, the calendar is still driven by a mix of inertia and influence: the decision usually hangs on “well, we did it last year” or a certain competitor/partner/client “is going to be there so we have to go.” Or someone senior “says we need to sponsor it.” Pretty surprising for an industry that adopted a data-driven approach to portfolios in 1952 (see Harry Markowitz and MPT…) and embraces all things quantitative elsewhere in its operations.

Nor is there much discipline after the fact in measuring whether sponsoring, hosting or attending an event was worthwhile. Attendees might be polled for their opinion of the event, but revenue and engagement KPIs don’t exist or are inconsistently measured and enforced. “When firms have tried in past to measure the ROI of in-person events, the results have been minute,” says one veteran of both the event and digital sides of the business.

Since March, the pandemic has effectively removed in-person events from the industry’s sales strategy and marketing mix. (Chart 2, with data from March 31, shows how hopeful firms were that things would bounce back quickly. But it is also a reflection of the reluctance of event organizers, who sit on substantial deposits, to formally cancel until they absolutely have to.)

This pause gives investment managers a chance to “reset” their events program from scratch. Instead of defaulting to a physical event as a potential networking opportunity, each should be evaluated as a component of the firm’s broader client engagement strategy. Decisions to sponsor/host an event need to be data-driven, with in-person conferences considered as one option among a range of ways to reach clients.

This will mean breaking down the operational silos between Sales and Marketing to develop an integrated approach to interacting with clients. Sales teams finally need to sit down with their Marketing colleagues and have the “Account Based Marketing conversation” they’ve been avoiding: Who are you really trying to reach by attending this event, and what do you need to tell them? Are there better ways to reach these clients or prospects and to have this conversation? Is this really how you want to deploy limited marketing and travel budgets?

The answer may be a well-designed ABM campaign initiated via digital advertising and content, which includes events and client meetings—or not. Either way, there needs to be discipline around their selection, using scorecards and industry event database tools like Function4 to ensure they map to the firm’s goals, and that their success can be properly measured.

The broader point is that decisions about events need to be made scientifically, within a deliberate engagement framework that leverages the knowledge the firm has about its customers and prospects—which are typically held in CRM systems and other client insight capabilities maintained by Marketing teams. These decisions should not be about where Sales teams want to network, or where Product or Research people want to speak.

Humans are naturally social creatures who crave physical interaction. Nothing will ever fully replace the experience of a professionally run, high-touch, well-targeted client event. What needs to change is how we determine when one is needed, and which ones to sponsor and attend.

As is true of so much else about the crisis, the past few months have given firms an unexpected opportunity to rethink how they do business—in this case how they interact with their customers. Firms that take advantage of the pause to think about events in this context will not only refocus their teams on higher-quality engagement; they also stand to dramatically improve their return on event investment—and for the first time actually measure it.

Larry Black, Managing Partner
larry@blackmosspartners.com