Understand How You are Charged for Your Event

Both the Event Planner and you, the Client, should have the same end goal – to stage a successful event and have it meet all objectives. The problem arises when these goals are not aligned, or one party feels they are hard done by the other party.

How the management fee is set up plays a pivotal role in achieving prosperity for both planner and client, and in the way this relationship develops. The answer to keeping both parties happy lies in how the management fees are structured.

It is very frustrating for all parties involved when you believe you are getting cheated and do not understand how. It is especially the case for clients billed for their Event.

The worldwide trend is for reputable event companies not to receive any paybacks from any source other than the management fee charged to cover their operating costs and show a profit.

The reason is that it allows for an objective event service that focuses only on the needs of the client and does not let any “greed or selfish” issues to interfere with the service promised.

Traditionally, Event Management Companies have used a variety of techniques to make their money from managing events, some of which have become somewhat questionable. These are:

Percentage of total event costs, which generally range from 10-20% of the event cost. The disadvantage of this approach is that there is no incentive to lower the costs of the event.
Flat fee, which is often best used when there is a big budget or where the work involved is relatively simple.
Commissioned basis, where the Event Manager relies on commissions from the suppliers involved. The problem with this approach is that the Event Manager can tend to make decisions based on who gives the best commission as opposed to selecting the best supplier.
Hourly charge, where the client is charged with the time spent on the project by the various Event Experts.
A combination of all or some of the above, often resulting in frustrated or confused clients.
As we can see, there is not a  “perfect” charging basis. The ideal outcome for a client is to have a well-run event within the approved budget, all the suppliers used to provide excellent service, and the delegates to walk away saying “wow, that was great.”

What is very important is to educate the client in all the options available to him/her, and be transparent in the charge rates and calculations. This alone, in turn, develops a trust which becomes the glue in your relationship with your client.

As a client, ensure you ask your Event Company to explain their fee process, enquire what is included in the fees, and ensure they keep to it by having the fee audited. You have the right.

John Ingram

Director of the Hiside Group

10 May 2018

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