How to Mitigate Revenue Losses
There are a number of steps associations experiencing revenue shortfalls can take to reduce the damage. One expert shares how to get started and why it’s important to know your sales history.
Whether it’s failing to meet conference attendance goals or advertising projections, it’s not so much if an association will experience a revenue loss, but when an association will experience a revenue loss.
That’s why Christine Melendes, CAE, vice president of strategic events and partnerships at the Association for Corporate Growth, said it’s critical to start keeping track of numbers. “Knowing your sales history is critical to spotting downward and upward trends,” she said. “Without this data, you will be surprised, and that’s not a good place to be. Nobody ever wants to be surprised.”
After that, she recommended gathering information on competitors, including what they’re doing or even what they’re doing differently. “The more information you have at your fingertips, the better off you are,” she said. For instance, associations might be able to spot trends in competitors’ programs that could tip them off to something to be mindful of within their own association.
And, if a downward revenue trend is spotted, it’s important to let the appropriate people know, whether that’s your boss, the executive team, or even the board. “The worst thing that you could possibly do, if you’re a staff member on a team, and you know that there’s a shortfall, is to sit on that information,” Melendes said.
After the proper people are filled in on the situation, it’s time to determine what the real impact of the revenue losses are going to be, so you can start making budget cuts to mitigate them.
Melendes shared two situations tjat associations may find themselves in and offered up some suggestions for cutting costs:
Missing event attendance numbers. When associations don’t meet their event attendance goals, they can usually start to mitigate the shortfall by trimming some other costs related to the conference. For instance, associations might consider reducing their food and beverage costs, bringing fewer staff to the event, or having less signage. But whatever costs you do decide to trim back, Melendes said to choose ones that won’t “have a big impact on the attendee experience.”
Falling short on advertising projections. If associations are consistently failing to hit their advertising goals, Melendes recommended they start asking themselves some hard questions about their publications. A reduction in frequency of a print publication should be considered, as should way to cut back design- and production-related costs. Both could help close the current gap that exists between revenue and expenses.
Although revenue shortfalls are challenging, Melendes said it’s important for staff to know that there are ways to overcome them. They also need to stay professional and positive—and work to “create the most successful outcome from whatever is trying you at that time,” she said.
What has your association found key in mitigating revenue shortfalls? Please leave your comments below.
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