The cancellation of in-person conferences has had a devastating financial impact on associations. Virtual conferences and other online education programs are making up for that lost revenue, but only if you make the right decision about virtual conference pricing.
Some associations price their virtual conference too low and end up having to furlough or lay off staff as a result. Others price too high and don’t reach attendance goals—which disappoints sponsors and exhibitors too. If only there was an easy pricing formula, but, alas, too many variables enter the equation.
Your virtual conference should not be free
Despite what other associations have done, resist the temptation to give away your virtual conference. A virtual conference has value and shouldn’t be free. A virtual conference also has costs. You can’t afford to give it away. Free is not a sustainable business model.
In the Virtual Conferences Report from Tagoras, based on a March/April 2020 survey, only 15% of respondents charged no registration fee for a previous virtual conference. As for the rest:
• 30% charged “significantly less” than their “place-based event.”
• 39% charged “somewhat less.”
• 30% charged “about the same.”
Consider the value perception of “free.” Attendees might assume the conference experience, speakers, and production value won’t be that great. Perhaps they’ll end up “paying” in another way with an onslaught of emails or commercials.
Sponsors and exhibitors won’t think much of free either. How good will the content be? Will decision-makers show up? Since no investment is required, the “no show” rate for free events is high—more disappointment for sponsors and exhibitors.
Consider these factors when making virtual conference pricing decisions
Discuss these factors when deciding on registration fees for your virtual conference.
Association goals and revenue strategy
What’s the purpose of this virtual conference? What are your goals? How does this purpose influence your pricing decision?
How big of a role does the conference play in your budget? 60% of the Tagoras survey respondents said their virtual conference had to be profitable, 25% said it had to be at least self-sustaining, and 15% could take a loss.
If the virtual conference is replacing an in-person conference and doesn’t bring in the same revenue, how will you make up the gap?
Virtual conference costs
Don’t underestimate the costs of a virtual conference. Sure, you’re no longer paying for these line items:
• Venue furnishings
• A/V and WiFi
• Shuttle buses
• Registration supplies
• Print collateral
• Staff, volunteer leader, and speaker travel
• Hotel rooms and staff meals
But do you still have costs due to contractual obligations with your former conference venue?
Like its in-person counterpart, a virtual conference requires a great deal of staff time. In fact, it might take more time since it’s unknown territory. You may need a training budget so staff can learn new skills.
Some associations end up relying on outside help to plan and produce a virtual conference, for example, virtual event and online learning consultants, event and video production teams, and technical support.
Will staff have to put other projects on hold so they can focus on the virtual event? Will that have revenue implications?
Technology has a price. You may need one or more virtual event platforms if your LMS is not capable of hosting a virtual conference—and, by the way, our TopClass LMS is capable. Budget, if necessary, for additional bandwidth, backup, platform licenses, and tools to assist with audio/video, such as cameras, microphones, lighting, and editing software.
You still have speaker expenses—just not hotel and travel costs. And, you still have marketing expenses, maybe more than usual since, with this new venture, you can go after a much larger audience.
Value for sponsors and exhibitors
Beware the mistakes that associations have made with virtual conference sponsors and exhibitors:
• Not even trying to get sponsors and exhibitors.
• Offering the same stale packages they offered in-person.
• Offering a valuable package but not helping their revenue partners get the maximum ROI.
Start fresh. Talk with revenue partners about their goals, what they’re experiencing and seeing elsewhere, and how you can work together to provide value. Do this before planning your conference program. You may find that many of them have valuable expertise to contribute. Even better, they may prefer a year-round approach that delivers more marketing value to them and more revenue to you.
Attendee value proposition
Even if attendees can afford registration, they can’t afford to waste their time. Sitting at their desk, they’re more aware of what they could be doing instead of listening to a speaker. The virtual conference experience must be worth more than the price of admission.
The attendee value proposition is made up of several factors:
• Content quality, relevance, and timeliness: If you’re pre-recording sessions, you have more control over content quality.
• Content engagement: Will you offer a mix of formats or just one talking head after another? Will attendees have a chance to interact with the speaker and with each other during sessions?
• Speaker quality: Virtual allows you to cast a wider net for speaker talent.
• Number of sessions they can access during the conference and on-demand later, and how long they can access that content.
• Production value: How serious are you about audio/video quality control?
• CE credits
• Networking and conversations: This is the huge differential. If you cannot replicate the serendipitous and structured opportunities for meetups and conversations, your pricing must reflect this lack. And, no, text chat boxes don’t count.
Also remember the value of attending a conference without being away several days from your job, family, and friends. However, make sure the timing is right for your market.
Understand schedule preferences. Would attendees rather attend all day for a few days, or a few sessions a day spread out over a few weeks?
Will your virtual conference meet or exceed these value expectations? How will it compare to other virtual conferences your attendees might attend?
Virtual conferences are less expensive for attendees (and their employers) because they don’t have to pay for hotel and travel expenses. They also don’t have to worry about scheduling travel time away from the office.
However, you must be aware of other factors that affect their ability to attend, especially in this economic climate.
• Lay-offs and furloughs
• Worries about possible lay-offs and furloughs
• Elimination of professional development budgets
• Loss of revenue for self-employed professionals
Sales taxes are a complicated issue for virtual conferences. For in-person conferences, the hosting state determines sales tax rates. But for virtual conferences, sales taxes vary by state and size of event.
Each state has its own revenue threshold. Swoogo has a state-by-state threshold guide. Each state also has its own “economic nexus” rules that, according to this helpful post from Northstar Meetings Group, “dictate how much ‘activity’ a business must have in a given state… to be expected to pay sales taxes there.” This Sales Tax Institute FAQ answers questions related to the sales tax nexus for different states.
In some states, sales tax is based on where the benefit is received (the attendee’s location), and in others, the tax is based on the host’s location. Northstar says, “Sales-tax requirements could also be affected by whether the event constitutes online training and/or whether goods are shipped to participants as part of their attendance.”
Virtual conference pricing options
After you come up with member and non-member registration fees, you have other options to consider.
• Day pass: You could offer pricing per day in addition to pricing for the entire event.
• Group discount
• Discounts for students and professionals in transition: This is a great sponsorship opportunity, for example, one sponsor becomes the “student benefactor.”
• Freemium registration: You could increase attendance (and leads) by offering free or heavily discounted access to the keynotes only.
• Tiered registration: In addition to the freemium tier, the regular registration rate could provide access to the entire program with 30-day on-demand viewing. The more expensive premier rate provides access to the entire program, plus exclusive sessions with keynotes or other industry influencers, and unlimited on-demand viewing.
• Discount for data: If attendees provide additional registration data—information that’s valuable to the association, sponsors, and exhibitors—they pay a lower registration fee.
• Subscription: The conference is part of an online learning subscription that includes access to all or some online learning programs.
• Networking upgrade: Provide post-event access to topical or birds of a feather discussion groups.
• Early bird: Virtual events have a higher percentage of last-minute registrations so incentivize early decisions with a lower rate.
Attendees are not aware of the time and money that goes into planning and producing a virtual conference, so don’t be afraid to explain the rationale behind the registration fees. The American Alliance of Museums included their pricing rationale in their virtual conference FAQ.
Considering all these virtual conference pricing factors takes a team effort. But when you’re marketing your conference, you can confidently tell prospective attendees how the experience will be worth their money and time.