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Open Letter to Show Organizers on EAC Fees
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The Exhibitor Appointed Contractor Association (EACA) would like to respond to the article that appeared in the June 7, 2001 issue of Trade Show Week that was titled "Exhibitor Appointed Contractors Are Vital to the Move-In of Large Shows." While the EACA would like to commend those show managers that recognize the contribution that our members make to large shows, we are disappointed with the contention that EACs mean increased costs to show managers, as the TSW article proclaimed in its subhead. Conversely, we believe, and have data to support, that EACs participation at trade shows creates a NET GAIN IN REVENUE for show organizers, not an added expense.


But before we look at the revenue created by the presence of EACs at trade shows, let's take a closer look at the recent story. In the article, which was a highlighted account of a presentation made at the Society of Independent Show Organizers (SISO) Executive Conference in Houston, TSW reports that some show managers charge fees to recover costs associated with the presence of EACs. It was indicated that the decision to charge fees came as a result "of the growing number of EACs", and that these costs include:


1. Legal costs and liability claims

The EACA would respectfully like to ask what costs, what claims? The article indicated that one show manager's policy of charging fees began with a claim from an injury in 1992. It would seem that in this particular case "the EAC that was responsible" was clearly identifiable. Why didn't the show manager take up the matter with the EAC in question, as opposed to punishing everyone by charging a fee?

2. Damage to the exhibit hall

The EACA would like to ask has this "damage" been specifically identified as the responsibility of an EAC? If so, why doesn't the show manager take up the matter with the EAC in question, as opposed to punishing everyone by charging a fee?

3. Excess cleaning charges

The EACA would ask whether show managers that charge fees claim that EACs bring trash to the show site? How does an EAC, by performing a set-up or any other service for an exhibitor, create more trash than if the official contractor performed the service? This one has us mystified, particularly in view of the damage/trash deposits that have been in use in Chicago for at least three years for many major shows. In each case where EACs have paid a deposit for covering any damages or excess trash they've left behind, 100% of those deposits have been returned to the EACs. Let me repeat. Not one dollar of damage or excess trash fees have ever been collected from EACs since this program was instituted in Chicago for major shows.

4. Extra administrative costs??

The EACA would point out to show managers that charge fees that every one of their shows will require the same number of trade show workers, whether they are supervised by the official or an EAC. The number of badges would be identical. Why then is it considered an extra administrative cost to produce worker badges? It is obvious that the only variable here is the number of exhibitors present, not the number of EACs.


As for filing forms, collecting insurance certificates and the like, the EACA has already made an offer to several show managers that charge fees that we can alleviate or eliminate this expense by providing them with EACA Services for Show Managers. This plan has been developed specifically to improve the pre-show communications between show organizers and EACs.


The EACA was formed with the mission to "raise the level of service excellence on the showfloor." We believe that customer service at trade shows must begin to improve dramatically if we, as an industry, hope to sustain our collective growth. In our view it is highly preferred to explore all possible avenues to reduce an exhibitor's cost of participating in shows, before adding fees without value. That is why we find the practice of charging EAC fees a terrible injustice to exhibitors, and a dangerous practice for our entire industry. This is a fact that becomes painfully obvious when you take a closer look at the practice of charging EAC fees.

EACA members have profit margins that typically range from 2-5%, making it impossible for them to absorb the fee that is charged. This forces EACs to pass along the cost of the fee (sometimes as much as$500. per client) on to the exhibitor. Whether this cost is passed along directly, or indirectly, it is the exhibitor that inevitably pays the fee. EAC fees thereby become a tax that is levied against exhibitors who use an independent supplier of show services.


We assert that this fee is in fact a punitive tax because it does not get charged to exhibitors if they use the official contractor. We also maintain that this practice creates unfair competition between EACs and the official contractor for exhibitor services. In a number of cases, EACs have lost client contracts because of this fee. This is particularly true when the EAC fee begins toexceed$300. Many display set-ups don't even come close to costing $200, as a result the exhibitor is given no choice but to give their set-up work to the official contractor. In these cases, the EAC fee interferes with the EACs free market opportunity to secure customers.


Yet when we ask "How come?", the show manager most often responds it is done because the general contractor is already "giving things to the show". These "things" include the registration counters, aisle carpet and aisle signs that an official contractor provides to a show manager at No Charge. Some show managers, given these concessions from their official contractor, may think that they are free. In reality, the show manager is benefiting from cost shifting. The cost of their registration counters, aisle carpet, aisle signs, etc. is borne by the exhibitor in the drayage rates they pay to the official contractor. So in fact, the show manager that levies EAC fees is charging exhibitors coming and going. First when they pick up the tab for the show manager's "freebies" in their drayage rate, and secondly when they are charged an EAC fee for hiring an exhibit service supplier of their own choosing.


We are not sure why any show organizer would want to penalize its exhibitors for opting to hire an exhibit service supplier. One would think that a show organizer would want each of its customers to have support from a supplier that is familiar with their customer's goals and objectives, have experience with their display properties, and can deliver a service result that is more efficient and cost-effective. We don't believe that show managers that charge fees start out to penalize their customers. We believe that some do it because they may have had a bad experience with an EAC, or a small number of EACs. Other show organizers, we believe, charge fees because they feel the need to protect themselves from some huge liability exposure their lawyers tell them they face. Unfortunately this legal advice is flawed and doesn't take into account the true nature of the trade show customer-supplier relationships. The result of this flawed advice is that the EAC fee is either a misguided attempt to punish all for the transgressions of the few, or it is a flawed attempt to gain control and protection from a process that has never been out of control (an assertion we are happy to support with evidence). We would prefer that all show organizers that have fallen into the fee trap, take a look at the other side of the story.


As we mentioned previously, it begins with the reason that exhibitors hire EACs in the first place. They do it to gain some measure of control, accountability and budgetary predictability to their exhibiting effort. The TSW article already indicated that EACs are "vital to the move-in of large shows." We couldn't agree more with that statement, and we don't think you could even find an official contractor that would disagree. We just wonder how show organizers that charge fees account for the value this creates for their shows. All businesses require customer servicing. Our industry is a little peculiar in the way it gets done. The show organizer owns the show and collects the space fees, and then contracts with an official contractor to control and manage the process by which those customers are serviced at the show. In growing numbers, EACs are hired directly by exhibitors to do this job, along with the official contractor. Yet only the EACs get charged for the privilege of creating satisfied show customers. Where is the credit in the show manager's ledger for the value that EACs create for its shows while playing their "vital" role? We believe this value is not only present, it's quantifiable.


Accepting as a given that EACs play a vital role in the move-in of large shows, let's consider who tends to benefit from EAC services, beside the show organizer. Isn't it reasonable to assume that the exhibitors with the larger and more sophisticated displays would be pre-disposed to hire an EAC? Wouldn't the large shows largest exhibitors be the ones that tend to benefit most? After all don't they have a greater investment to manage and service? If that is true, and we believe the trend over the past 20 years bears this out, the presence of EACs enables show organizers to sell more exhibit space than would otherwise be possible. Not only does the EACA contend that this supposition is true, we have evidence to support this claim.

On several occasions, the EACA been called upon to remedy conflicts arising from show organizers who attempt to create "exclusive" labor contracting arrangements. Sometimes we are successful in creating a reasonable result, sometimes we are not. In those instances where the show organizer insisted on their "exclusive labor contractor", it has often resulted in the exhibitor downsizing their booth space, and bringing their smaller exhibit. No longer able to predictably control their exhibiting costs, or to obtain the necessary services for erecting their more elaborate display, exhibitors will often reduce their exhibit space - creating a net loss for the show as well as the exhibitor. There have been other cases where the EACA has successfully explained this scenario to a show manager that thought they wanted an "exclusive labor contractor." Once the show organizer permitted the presence of EACs, exhibitors that were formerly prepared to downsize their exhibits decided to keep their larger space - creating a net gain for the show as well as the exhibitor.


Now as far as we know, EACs in these instances have not decided to hit up the show organizer for a commission on the extra space that they sold. Nor do we know of any plans to begin a campaign to track this additional value that EACs create (while building show revenue and performing a vital service) and send invoices to show organizers for their 10%. Speaking on behalf of our members, what EACs do want is an opportunity to work with show organizers to find ways to resolve this issue collectively. We believe that the solutions that we will create (and have already been created with major shows in Chicago) not only are more effective, they would end up saving show organizers significant monies from their expense budgets.

We make this claim in full view of the current status of large show move-ins. The EACA would be the first to agree that the increasing number of EACs (particularly at large shows) creates a need for better pre-show communications between EACs and show organizers. The systems that are currently employed, in many cases, are woefully inadequate and inefficient.


We would also maintain that because of this growth there is a growing need for education among EAC companies, and a commitment to uphold standards of conduct, professionalism, safety and ethics. Finally, we would affirm that there is a need for a system for handling violations of these rules of professional conduct, and a means to insure that conflicts of this sort become an ever-smaller part of our collective concern.


That is why the EACA has been established.


Trade shows have been growing at a terrific rate throughout the 90s. We'd like to see that trend continue. But to do so we feel that our industry must do better. Because our growth has happened in spite of the fact that 40% of first time exhibitors don't return. At the EACA, we have undertaken a series of steps to improve our service and drive that number down. First of all, the EACA has established a professional Code of Conduct, which each member must sign and uphold to maintain their status as a member. Secondly, we are developing a nationwide training and certification program for showfloor workers to improve our servicing capabilities, and finally we have established a suite of services that we call EACA services to improve pre-show communications between show organizers and EACs. And, all this is being done with the input and support of all other major industry associations. The EACA does not believe that unilateral decisions (like the EAC fee) have a future in our industry. We believe in creating solutions that work for our entire industry, like our cooperative efforts with ESCA and IAEM to remedy the flawed process of filing insurance certificates. But that's an article for another time. Meanwhile, it is obvious that more steps need to be taken, and will be taken, to relieve any concerns that show organizers may have about the growing presence of EACs.


We believe that EACs and show organizers alike will be better off by working at these issues together and adding value to the exhibiting process. We invite all show organizers to discuss these issues with us at our upcoming Annual Conference in Chicago on July 20-22. Hopefully in doing so, we can generate greater customer satisfaction, and more customer participation. It certainly beats the alternative, where exhibitors in EAC fee shows are required to pay a fee that carries no value. The only outcome of this campaign can be greater customer dissatisfaction, and less frequent participation. And while show managers must be wary of rising costs, they should also know it is much less expensive to do the work necessary to keep an existing customer happy, than it is to spend the sales and marketing dollars necessary to find a new one.

 

Sincerely,

  

Jim Wurm

Executive Director

EACA

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