Marketing Procurement

How Procurement Can Drive Value by Selecting the Right Events Agency

Pivotal Role

Events are integral to many companies’ marketing strategy, and procurement plays a pivotal role in ensuring these events are successful. By understanding the different types of stakeholders, recognizing the importance of brand fit, and focusing on risk and cost avoidance rather than direct savings, procurement can significantly enhance the value derived from these events. 

“[Glass of Prosecco in hand] David, when this is over, maybe in two weeks or so, we need to talk about changing this agency. They’ve caused me so much stress and work, I’m exhausted. But right now I’m just relieved it’s gone well and that the CEO is happy.”

This is a discussion I had with a stakeholder a few years ago. We toasted each other and agreed to pick up the discussion later. After a few reminders I was told that there was ‘no urgency’. I realised that the relief was so great she couldn’t contemplate the thought of trying to find another events agency in a small market that might turn out not to be less reliable.

Often overlooked in the Marketing Procurement community, even as a ‘thing’, corporate events play an important role in the strategy and image of large companies. They are powerful tools for communication, branding, and engagement, whether the audience is internal staff, customers, or the media.

When companies invest in these events to bolster their brands, the role of procurement in selecting the right events agency becomes critical. Here’s how procurement can add significant value.

The Roles of Corporate Events in Marketing Strategy

Corporate events can broadly be categorised into three families:

Internal Events:

Often referred to as ‘Corporate Events,’ these are designed for staff engagement, training, or alignment with the company’s vision and goals. Examples include ‘town halls’, internal conferences, and team-building exercises. Mostly focused around staff, but contractors can include guest speakers, event staff, entertainers, audio-visual experts, (video)photographers, caterers. Venues can be on office premises or at hotels or conference facilities.

Although there may be an evening theme, the main focus is on daytime and a sit-down meal or buffet and accommodation are usual.

Branding Events:

These marketing-focused events are key to building and enhancing an individual brand image. They include product launches, press conferences and influencer events that aim to create a lasting impression on customers and consumers alike, while building brand equity.

As you will have to obey brand guidelines, this means a brief from brand staff and will likely involve your creative agency for their input.

The event will require pre-branding work. Often evening affairs, the focus will be on ‘party’ and the hope of creating something memorable. Drinks being served, canapes, Press, influencers, creative agency staff, entertainers/DJ, audio-visual, photographers, giveaways/gifts. Hotel venue or nightclub…even outdoors or at an historic site.

Public Relations (PR) Events:

PR events are usually external and focus on communicating the parent company’s message to the media, customers, and other key audiences. These can range from CSR initiatives to formal press briefings.

Press, customers, guest speaker, daytime, hotel or conference venue, light catering.

Each type of event serves a unique purpose and requires a tailored approach to planning and execution. This is where the choice of the right events agency becomes crucial.

Types of Corporate Event Stakeholders

To effectively contribute to the success of corporate events, procurement teams need to understand the different types of stakeholders involved:

• The Decisive Stakeholder: This person knows exactly what they want, including the location, theme, and suppliers. They may prefer to manage the event themselves and pay suppliers directly.
• The Creative Stakeholder: This stakeholder looks to the agency to develop the concept from scratch and manage the entire event (and subcontractors) as a turnkey project.
• The Hybrid Stakeholder: Often found in between the two extremes, this stakeholder may have a vision but relies on the agency for execution. Their needs might not be fully clear, leading to adjustments throughout the project.

For procurement, understanding these stakeholder types is essential. It allows for better alignment with the event’s goals, informs your events agency strategy – e.g. the ability to consolidate or not – and ensures that the chosen agency can meet expectations.

Key Considerations for Procurement in Event Management

When selecting an events agency, several factors are of paramount importance to stakeholders:

• Brand Fit: The agency must understand and reflect the company’s brand values in every aspect of the event.
• Creativity: the central idea that matches brand or corporate values needs to be considered. More brand-orientated events ordinarily require more creative input that the message, venue and whole experience should reflect.
• Timeliness: Events must be delivered on time, without any last-minute emergencies or disruptions.
• No fuss: the absence of unforeseen issues and inclusion of back-up planning.
• Delegate Experience: Whether the goal is to ‘wow’ the audience or simply ensure a smooth experience with clean and clear arrangements, the agency must cater to the desired delegate experience.
• Budget Compliance: While savings are often expected, they can be challenging to achieve due to the lack of benchmark prices in the events industry.

Adding Value Through Procurement

Procurement’s role in event management extends beyond cost-saving. Here are some ways procurement can add value:

Strategic Sourcing: By multiple quotes and conducting thorough due diligence, procurement can identify the best agency that aligns with both the brand’s needs and the budget constraints. Take on the needs of all stakeholders and adapt a single or multiple supplier strategy to suit.

• Cost Avoidance: Through careful negotiation and tender processes, procurement can achieve cost avoidance, ensuring the company does not overpay for services.
• Options: agencies who offer three alternatives to clients with different prices and environmental impacts can reduce the risk of stakeholders always choosing the most expensive option; agree guidelines with your agency how event options are proposed
• Cancellation fees: when events have to be cancelled at short notice, venues and contractors (understandably) need their losses covered. In some cases this could be as much as 90% of the total event fee if less than one month’s notice is given. Make yourself aware of individual event contracts that agencies ask your stakeholders to sign and mitigate any one-sided risks by clarifying terms in a frame agreement.
• Bulk Rebates: In cases where the company hosts multiple events, procurement can negotiate bulk rebates for loyalty, offering some level of financial benefit.
• Transparency: many agencies make money by receiving kickbacks from venue owners. This may be okay (since there could be benefit to you in accessing discounted rates) but make sure the arrangement is transparent when venues are recommended and when assessing full remuneration.
• Mitigation: a 20% contingency is often quoted by agencies to cover unforeseen problems. ‘Best practice’ client behaviour should be understood by you and your stakeholders to avoid unnecessary conflict and extra costs.
• Relationship Management: Building strong relationships with events agencies can result in smoother operations, fewer last-minute issues, and potentially better pricing over time.

Challenges in Sourcing Event Agencies

One of the significant challenges in event procurement is the lack of uniformity in events, which makes it difficult to benchmark prices or standardize contracts. No two events are identical, and the services required can vary drastically, making traditional cost-saving measures less effective.

Furthermore, finding a single provider that can cater to multiple countries, brands, or stakeholders is often impractical. Instead, procurement should focus on flexibility and adaptability, ensuring the chosen agencies can meet the varied needs of different stakeholders across locations.

Conclusion: Maximizing Value in Corporate Events

Events are integral to many companies’ marketing strategy, and procurement plays a pivotal role in ensuring these events are successful. By understanding the different types of stakeholders, recognizing the importance of brand fit, and focusing on risk and cost avoidance rather than direct savings, procurement can significantly enhance the value derived from these events.

The right events agency is not just a supplier but a partner in delivering the company’s vision.

About the author

David Little has over 20 years’ experience in procurement. David has worked on several areas in Marketing, including Media, Creative, Influencers and Sponsorships. He is based in Stockholm, Sweden.