Author: Brian Sherwood
Word count: 1,800
Time to read: 9 mins
Many media founders lead by their gut. This is not an inherently bad thing because the gut of an entrepreneur often leads them to take the chances and capitalise on opportunities that others miss. And in the early days of their business, their gut instincts are often well-aligned with the needs of their customers.
But, as their business grows, customer understanding often becomes less of a priority. The entrepreneur can become more focused on their business than their customer, or they can miss the vital step of educating their growing team to know their customer as well as they do.
Then, when the founder is interested in exiting their business, they can run into a problem when the acquiring party wants to understand more about the business they are about to pay millions for. They want reliable customer insights to help them understand and be reassured about the value of the business.
I have worked with event companies on the acquirer side and acquisition target side. To be clear, the top priority for acquirers is easy to understand financial documentation. A buyer wants to see the demonstrable financial potential of the business. If you are delivering 50%+ growth consistently year on year, and profits are increasing, that would certainly be the most important factor when evaluating your events business.
It’s not the only consideration, however. Many buyers also look to determine the ‘health’ of individual events, and to understand this, customer insights are vital.
This article should help media founders – particularly those interested in exiting their business – to be more prepared when conversations with potential buyers begin to focus on customer insights. While it looks at common questions I have dealt with in the due diligence process, the same principles can help a business improve itself for greater long-term success. For any founder, time spent on better understanding your customers – especially as you scale – is only ever time well spent.
Luckily, there are some simple things one can do to move from running a business based on one’s gut intuition to running a business based on customer insights.
Five ways to use customer insights to increase your event business’s value
- Formalise your customer Insights Process
- Define your core customer(s)
- Understand the market dynamics of the industry you serve
- Know the competition
- Create a 3-5 year plan
1) Formalise your customer insights process: You will progress acquirer conversations much more quickly if you have insights data to hand. Make sure you systematically collect customer-centric data point(s) like satisfaction (CSAT), Net Promoter Score (NPS), etc., consistently, over time. Do this after every event and routinely (e.g., once a year via an all-customer survey).
Buyers consider customer-centric metrics an indicator of your event’s health and will frequently compare your metrics to those of existing brands in their portfolios. They want assurance that what they are purchasing is as healthy as or healthier than their current assets. If your event is growing financially, but customers are unhappy, then the buyer knows they will have to invest more heavily in getting the event to a ‘healthy’ place. Needless to say, this could be a barrier to sale or at minimum could decrease the sale price.
If you don’t have this data to hand, buyers may well conduct or commission research to gather such metrics. Far better to be aware of your own customer-centric metrics and have taken action to improve them when needed than to have a potential buyer reveal a low CSAT or NPS figure.
Before they become useful in sale conversations, these data points will help you to prioritise improvements to your events, as you get ready to sell. And knowing where you need to improve shows an honest and reflective approach necessary for managing a healthy event, which is reassuring to potential buyers.
Formalisation should not be scary. It’s quite simply committing to a plan and executing the plan. At its most basic, it’s just making sure you do a post-event survey that captures a couple of these stats, and making sure you use the same question the following year.
There are plenty of survey platforms out there that are free or low-cost, and a bare-bones post-event survey can be as simple as five questions. The important thing is just collecting the data consistently and accurately over time. (Best practice is to send an invitation to give feedback to all who attended and all who exhibited in order to avoid potential selection bias (sending to the whole universe avoids buyer perception that only friendly customers were selected to provide feedback).
It’s not just about surveys
Formalised insights can also be taken from your existing data sources. Customer loyalty, for example, is best illustrated by measures like:
- Exhibitor renewal rates (especially on-site rebooks)
- The percentage of attendees who return every year (at person and company level)
You can step up your game and conduct some qualitative research. Just commiting to talking to a few customers every month or quarter over the phone can pay huge dividends. Get to know their needs, how well your event serves their needs and areas for improvement or growth. Then evaluate all the interviews to see if any patterns arise that suggest opportunity for improvement.
2) Define your core customer(s): A company looking to acquire your business will appreciate it when you can clearly define the customers you serve, and are easily able to answer questions such as:
- How many customers of each type do you have now? How big is the potential universe?
- What jobs are your customers trying to accomplish? How does your event help them to do that?
- What does success look like to your customers? How does your event help them achieve it?
- What challenges do your customers face and how does your event solve them?
Documented customer personas are a great way of concisely capturing this type of information. (Feel free to contact Collingwood for a template.) Have these to hand and you can demonstrate to your potential acquirer just how well you know and serve your customer.
3) Understand the market dynamics of the industry you serve: Many event founders have access to a lot of industry information, but may not use that information to drive strategy.
An event organiser should be able to easily answer market-related questions such as:
- How big is the total addressable market?
- How is the market structured? How do you segment your database?
- What are the big trends / issues affecting your industry? How do they help or hinder your business? (E.g., regulation, cost changes, etc.)
- What impact are broader macroeconomic factors having on your industry? How are you responding, or helping your market to respond?
- What is a typical customer buy / sell dynamic and cycle? How and when does your event support that?
- What is the growth trajectory for your industry? How are you capitalising on that? If it’s in decline, how are you addressing that?
(Events catering to high growth industries or especially lucrative customers can command a premium in sales conversations.)
You can capture some of this information in your customer personas and it’s also worth documenting your response to market dynamics at least annually, as part of your business planning process.
4) Know the competition: How well do you know your competition? This seems like a fairly simple question, but buyers will delve deeply into your competitive landscape. Can you answer the following types of competitive evaluation questions?
- Who are your direct competitors? What other events are servicing your customers? How well are they doing it? And what is your response to them?
- Beyond events, where else do customers get information, network and promote their business? Who are your publishing and association competitors?
- What is your competitive advantage over the competition? What makes your event unique?
- What do your competitors do better than you? How does this impact your strategy?
- Who poses a future threat? E.g., is there a publisher in your space that doesn’t run events but could? How are you preparing for this?
5) Create a 3-5 year plan: Do you have a documented 3-5 year plan, built around your customer insights? If not, creating one doesn’t have to be a complex exercise, but dedicating a little time to it can be great for:
- Reviewing and defining the long-term strategy of the event, in response to customer insights
- How should your event develop based on market dynamics?
- Are there needs that your customers have that are not being met?
- Are there opportunities to grow the event up or down the supply chain or into adjacent customer groups?
- Setting down growth plans like:
- Cloning the existing event to a geography with an unmet need for an event like yours
- Co-location with an event that meets a need not met by your event
- Launching an adjacent event that gives you access to a wider customer base
- Forging relationships with partners that matter to your customers: celebrities, influencers, accrediting institutions, associations, publications, venues etc.
- Determining the investment needed to deliver on strategic goals and growth plans, covering:
- Operational expenses / experiential investments
I know this can seem like a lot, especially when you’re running an event in its earliest stages. As the founder, you are often wearing many hats which means time is not a luxury you have. However, making some time to think through these elements will inevitably help you to know your business’s potential value, to better understand your worth when looking at selling, and drive growth as you get to that stage in your journey.
There are many resources out there to help you get started with formalising your customer insights (links below). We wish you the best of luck in your adventure. And if we can help you on the way, please don’t hesitate to contact us.
Survey tools I have used personally or other event pros I work with have used:
Other useful tools
- Data visualisation programs: if you have someone who can work in data, these can help you get great insights from your existing data. Tableau, Qlik, Microsoft Power BI. All can help you understand your existing data better, which leads to greater customer understanding
- Otter – as someone who uses transcripts of interviews to identify patterns in qualitative research, I know that transcribing costs can add up over time. Otter’s AI transcribing software does a great job at minimal cost. Record and transcribe your customer insights interviews at a fraction of the cost.
- Miro – a great visualisation tool for exercises like creating flow charts of customer touchpoints, brainstorming, etc.
- IBISWorld – industry market statistics across nine geographic markets
- Statista – insights and statistics across 170 industries and 150+ countries
- Euromonitor – global expertise with local insight from analysts around the world
- US Specific Market Stats – Census and Bureau of Labor Statistics
Brian Sherwood is a Senior Insights Adviser for Collingwood Advisory and has been working in customer insights and market research for over 20 years, including with market-leading events businesses of all sizes, from start-ups to Fortune 100 companies.