The pandemic kind of gave us a do-over, right? A chance to rethink how we run our business. How we think about the world actually, but it also gave us permission to make some changes within our business model.
I know it's scary to make changes. We often question ourselves and ask things like, are my customers gonna accept the changes? How would I even go about implementing it? And my favorite is, will I still be competitive if I do this? And the answer is yes.
Stop letting your fear, keep you from doing things that are going to make your businesses better and your employees better. Below are 5 key opportunities that I believe companies need to address immediately.
1. Increase bill rates
The first, and most significant thing you can do today is to increase your bill rates. It's part of the society we live in today.
Inflation's 8.6%. That means your cost of doing business is more expensive today than it's ever been. It's time. What are we waiting for? We recently did a survey and found that 75% of companies have either stayed the same or only moderately increased in the last two years. Think about that...you don't have a choice. You have to do this.
2. Increase crew pay
The second thing you need to do immediately is increase what you pay your crew. All of us are fighting for talent today. 38% of the industry left the industry altogether, overnight gone. Now all of a sudden we have more demand than we've ever had demand equals prices going up, right?
It's going cost more to get people if you're scratching your head, wondering why it's so hard to find people with availability and who are saying yes to your jobs, give them more lead time and pay them more. It's also not just the money. Be organized, send them information and communicate. People wanna work with good companies who do all these things but also pay them a fair wage.
We found that 68% of companies in the industry said that how they've paid their crew has either stayed the same or only moderately increased in the last two years. It's all about supply and demand. No secret there. If you want top talent, it's gonna cost you. So stop fighting it, just do it, just pay it.
You might be surprised how much easier it is to staff your events with really great people and give your customers really great outcomes.
3. Lead your customers
We need to start leading our customers. I think for some in our industry, we have a sales problem. It all starts at the top. How the show is sold dictates everything downstream.
Sell the shows at good margins. But in order to do that, you have to lead with value with creativity, with responsiveness, you've gotta lead them, teach them something they don't know. And I'm gonna say it...challenge your customers. That's what people are buying.
You're the expert, keep them from making bad mistakes by leading them. We found in our survey, 92% said lead time has drastically decreased in the last two years, but only 20% are applying any surcharge for that. Think about that. You're paying more to get gear. You're paying more to get people and it costs you more when it's last minute.
Why aren't you passing on that increase to your customers? Prompt them by applying a surcharge for last-minute requests again, and educate them on what's going on. Tell them the position you're in, and what it means when something's last minute and all the gear is already reserved. There's a shortage of people.
Educate them on what our industry looks like now, you have an opportunity to do that.
4. Update payment terms
The cost of money is through the roof today, the cost to borrow, I don't know if you've remortgaged lately but the cost to do that has more than doubled in the last year.
So money is really expensive. And again, going back to educating your customers, helping them understand that 38% of our industry gets paid upon receipt post-event. So that means 68% of us are providing terms.
But guess what? I know if you're providers, you're vendors, they're not telling you. "Nope, don't worry. It's okay. pay me in 60 or 90 days" they want their money immediately. So if you're paying them immediately and you're allowing your customers to pay you in 60 days, 90 days, it's not sustainable. And I think we'd all agree. We all wanna grow. We all have big plans and demands through the roof. We have the leverage here. So it's going to cost more.
You're gonna have to collect sooner and I promise you companies are expecting this. It's not something new. If you were to approach them and change your terms, they're expecting that. That's just the nature of our landscape right now.
5. Increase your deposits
Last but not least the fifth missed opportunity that you have a chance to change today is to increase your deposits. We found that 59% of companies either collect less than 50% or wait for it. No deposit at all. That's crazy to me and probably is to you too, but it's happening and look, all of us pay deposits when we buy things. So why would it be any different for your customers? And I promise your competition is doing it and you are missing out.
I'll leave you with this change is hard, but it's necessary. You've been given an opportunity. A gift permission to change all of these things in your business. Our industry still operates in many ways like it did 20 years ago, with limited tools, antiquated policies, and some of the same pricing models. Today's the day to stop missing out on what your competition has already figured out.