http://micespace.net.au/topic28-pco-billing-practices.aspx MICEspace.net - Meetings industry-specific content - PCO billing practices - Messages en-us http://blogs.law.harvard.edu/tech/rss Jitbit AspNetForum Mon, 10 May 2010 19:01:58 GMT Mon, 10 May 2010 19:01:58 GMT http://micespace.net.au/topic28-.aspx A single Tax Audit will bring all the players, as innocent as they may feel they are, into a room full of men and women with wigs. So, if you have been involved with any company, on either side of the transaction, over the last twenty years where it might seem like you or the other side actually got some benefit, where your client could say to his/her honour -"I was not aware of this arrangement"; you should be getting sweaty palms right now.]]> Mon, 10 May 2010 19:01:58 GMT http://micespace.net.au/topic28-.aspx Fri, 12 Mar 2010 16:05:53 GMT http://micespace.net.au/topic28-.aspx
Event Planners operates all over Australia and has considerable experience with competitive tendering for (and hopefully winning) meeting and event business. Our philosophy has always been to be open and upfront about our management fees and charges, do a good job and be rewarded accordingly.

But the market has changed for the worst - perhaps it became more evident during the global financial crisis but too many potential clients simply assumed (usually on the advice of their local convention bureau or centre - but that is another story) that all PCO’s did much the same thing and in the absence of any other benchmarks (which this industry badly needs) price became the leading decision making factor. Today 99% of PCO’s are appointed on price, not competencies.

Several years ago I researched and wrote an article on PCO fees and found that at that time there were a dozen or more fee systems in common use. They ranged from 100% fee models to 100% commission (or illicit mark-ups, kick backs etc). But I could not “analytically or morally” find fault with any of the models. Let’s say PCO “A” charges $50,000 in fees and PCO “B” makes $50,000 in commissions – the impact on the client’s budget is the same. In some respects PCO “B” may be taking a larger risk by not having the comfort of a fixed fee but clients more than ever are looking to share risk.

The problem however with PCO “B” is that the client does not know whether they will end up paying more than the fixed fee of PCO “A”. I tend to think of this as the proverbial line in the sand – on one side is what it good for the client and on the other what is good for the PCO. It is clear to me that asking the fox to guard the chickens can only lead to tears – for the chickens. Interestingly a number of larger PCO’s have become very adept as foxes.

I have never met a PCO who did not receive some commissions. Be it declared commissions like hotel bookings or benefits from aggregating their client’s purchases (bulk discounts) or simple loyalty programs with suppliers – it happens so let’s get over that old wives tale and focus on services, risk, outcomes and win-wins.

The cure to this is client education. We desperately need benchmarks that make it easier for the client to assess the risk, rewards and returns etc. A simple estimate of “person hours” required to manage the event multiplied by the PCO’s hourly rate would be far more effective than how the fee is charged. If PCO “A” quotes 500 hours and PCO “B” quotes 300 hours any savvy client will investigate why there is such a difference (i.e. look at the services offered) and decide if they need a premium service or a simple secretariat.

Ray Shaw AMM, AFMEA, FPRIA, AJA, B.Bus Com.
Chairman
Event Planners Australia]]> Fri, 19 Feb 2010 13:57:44 GMT http://micespace.net.au/topic28-.aspx
What, for example, happens when an exhibition is part of a conference you are organising and the PCO has the responsibility of securing sponsors, exhibitors, etc. Would this be a management fee project as well? Or does the PCO charge a percentage of the sponsorship secured? A $200,000 sponsor could garner a commission of 10% = $20,000. I am just wondering whether there are standard practices or everybody does their own thing...]]> Tue, 09 Feb 2010 08:33:45 GMT http://micespace.net.au/topic28-.aspx
I was recently billed a cancellation fee for a conference I was attending and took exception to this given it was an automated software invoice where no loss was accounted for my unattendance. It would be scandalous of me to charge my client such a fee for my time in processing such a fee when my client is already paying me an honest management fee. It is their absolute right to change or cancel that is what they pay me for and it is understood that they will pay for any loss where we are billed by our suppliers for unused services and other contractual thingy-me-bobs. Absurd to add salt to the wound by charging additional fees .....

Planners need to get over that people have to cancel or change their minds. Charging scandalous fees is disreputable if you are already charging a management fee - not accounting for supplier contracts of course.

Airlines are an insurmountable exception because of the random fees they inflict upon us - hmmmmmph - and our clients suffer.

Always remain open, honest and fair - I'm surprised this issue has been raised ... are there other ways to bill clients?]]> Fri, 05 Feb 2010 20:58:24 GMT http://micespace.net.au/topic28-.aspx
With regards to billing whilst I prefer to charge a service fee we need to be flexible as some clients prefer all inclusive pricing, perhaps because it is easier to manage within their own back end systems or to gain approval.]]> Fri, 05 Feb 2010 15:59:00 GMT http://micespace.net.au/topic28-.aspx Fri, 05 Feb 2010 15:51:51 GMT http://micespace.net.au/topic28-.aspx Fri, 05 Feb 2010 12:35:11 GMT