Every venue is susceptible to highs and lows. You’re going to have months/years where you’re calendar is insanely busy and you’re turning away business and months/years where you’re begging the local Chamber of Commerce to have their Thursday Morning Breakfast Mixer at your venue (I just threw up in my mouth). The reality is that this business ebbs and flows. A new venue in town is going to rip you apart for a while and then you eventually figure out how to make your venue a bit different. The economy might tank again and you start layoffs, and then all of the sudden, things start to turn around. The important lesson to learn here is that you can’t wait for a business disaster to fall in your lap, you need to set yourself up to maximize the highs and survive during the lows.
My biggest contribution to any company I've worked with was simple… Partnerships.
Creating a partnership is not an easy thing to do. It requires two parties to give up something for mutual benefit. Creating win-wins are so incredibly difficult because most of us don’t want to see someone else get a larger piece of the pie. It’s a point of pride to not give up too much in a deal even if it’s going to make you a ton of money.
I remember closing a deal with Costco to sell discounted ticket packages to an event in LA. If you’ve ever dealt with Costco you know that their ability to press their suppliers to offer the lowest price is unparalleled. I couldn’t only include tickets because the value wasn’t there. So I had a number of challenges in creating this partnership… I had the challenge of convincing my leadership that somehow gutting our ticket prices that low was going to be a huge success, the challenge of getting Costco to chill out a bit on their pricing policies and the challenge of convincing our third party partners to discount parking and rides. The end result was a grueling 8 months of creating the offer, 10,000 packages sold in its first year with 40,000 attendees and around $1M in gross. The event had a $13 spend per person which would generate another $500,000 to the event. The 8 months of back and forth was absolutely annoying and the plug was almost pulled at least 5 times, but needless to say, the offer was a BIG deal. It has generated millions of dollars for the company and well over half a million attendees over the years.
PARTNERSHIPS ARE HARD, but holy crap they’re a game changer when they work. Monetary partnerships in most cases are pretty cut and dry and to me they're more transactional. This could be a naming rights deal for a venue or paying for ads on a radio station.
Non-monetary partnerships is where all of the fun happens and where a lot of venues drop the ball. In my humble opinion, non-monetary partnerships are the most important to establish early on because they can save your business during slumps or when you need it the most. Here are a few steps to consider when creating non-monetary partnerships:
What do you have to offer?
You need to know what assets you have to create leverage
If you're a concert venue, tickets and VIP access are your biggest assets
Take a client, partner, city official backstage or even on stage and you're gold
People want to feel important and cool, you have assets to make that happen
What do others want?
Understanding your partner's priorities will help make you stand out. Everyone is in it for themselves these days, so if you're able to show that you understand their needs, you're at the top of the list
Don't be greedy or selfish
This is the most difficult thing to get corporate leadership to understand
I used to run a venue that did 30 events a year when I got there and by the time I left we were doing 120 events a year. Only a small portion of those events was I able to charge rack rates and for the vast majority, I would discount rent, waive rent, split revenues 50/50, take on risk with the promoter, give up some of my F&B numbers, etc… I did absolutely everything I could to get promoters into the building and increase our attendees. There's no right and wrong handbook here. You need to do whatever it takes to make your venue succeed
If you're greedy or unwilling to parner, especially on a dark day, then you're nuts. Sticking to rack rates isn't greedy, but if you only have 4 events that month and you're sticking to rack rates… best of luck to you.
There's so much more to write about creating strong and effective partnerships. We haven't even talked about saving thousands of dollars per show with marketing partnerships or decreasing fixed expenses through partnerships, but for now, this is good enough. As always, this stuff isn't hard, but if you need some help along the way pick up the phone and give us a call or shoot us an email.
Amir Mertaban
Coletto Consulting - info@colettoconsulting.com - (323) 207-5099