It is true that the pandemic is still officially ongoing and there is even talk of a threat of a second wave of infections in autumn, but in principle, you can already draw conclusions from the current situation. At a time when the entire event, conference, and training industry stopped day by day, event organizers collided with the wall. On the one hand, they had to face a huge or total decline in revenues, on the other hand, they had to bear the need to incur fixed costs of doing business.
Ruthless market scissors
In practice, the financial scissors, which are the outcome of revenues and costs, have closed. Unable to realistically count on any revenue, event organizers had to focus on reducing costs. Let us skip the possibility of obtaining state aid in this situation because not everyone could equally benefit from it.
The first element in reducing costs is to cut those expenses that are not critical to the company’s existence. While it is not easy or simply impossible to reduce fixed costs (leasing, loans, employee salaries, office rent, etc.), in the case of other expenses (e.g. marketing and advertising, event registration software) it depends only on the type of contracts signed or settlements used with contractors.
In the context of IT systems supporting the processes of attendees’ registration and payment, there are basically two models: prepayment for services and payment for services rendered. We wrote about what to consider when choosing the right system in another post.
If you have previously purchased a license for IT services related to the organized congress, conference or training, then practically the only option is to negotiate with the supplier the extension of the license, the return of unused credits, etc. The success of negotiations depends on the goodwill and financial condition of the other party. These conversations are not easy, especially when the supplier also recorded a decrease in revenues.
However, you don’t have any problems in a situation where you use services in the pay-as-you-go model, i.e. you only pay for services actually provided, without having to block capital first. In this model, you simply stop using the services at any time. You don’t have to explain your decision, you don’t pay any contractual penalties, you can practically cut future expenses to zero without any consequences.
The SARS-CoV-2 pandemic clearly showed that current models and working methods can (and should) be modified. A lot of people can effectively do office work remotely, some training companies have successfully transferred their training courses to the “cloud”.
From the risk management point of view, it is worth deciding to cooperate with suppliers who offer freedom of choice – meaning that they understand that for some reason you can suddenly give up your plans and they allow you to stop using their services without any obligations. In the area of online event registration software, the most flexible solution is the model in which you don’t pay for services in advance, but only after they have been provided. This way you don’t take on the whole risk of canceling or postponing the project.
Even if from the initial calculations it seems that the aforementioned model is slightly more expensive than the alternative one (ie subscription or prepayment for services), the current situation in the world has just verified all “but”, “maybe” and “if”. Apparent savings can eventually cost dearly.
The pandemic should teach us something. Let it teach us better management of capital, time, and processes.