Turning waste into PR

I went to hear from Tom Griffith of Emma and Tom’s fruit juices at The Hive the other day. Apparently in their early days their minimum production runs were always more than they could sell, which was a problem because their stock was highly perishable. Their clever solution was to use that excess as sponsorship for events.

Which got me thinking about my social venture, the Churchill Club. Although vastly different to a fruit juice company our production run, an event, normally exceeds our ability to sell it as well – that is, there are normally spare seats in the room.

Some quick facts:

• We run around 22 events a year in Melbourne, roughly fortnightly, on technology, entrepreneurship and innovation.
• We can seat 60 people at an event.
• We charge for tickets but always have a couple of people attending free because they are the speakers, the speaker’s guest or special guests of the club.
• Each person attending incurs a cost to us because we provide canapes and have an open bar.
• We don’t break even until we reach 20 people and the modal event has around 35-40 people.

After listening to Tom it occurred to me that rather than looking at us selling an event perhaps we should be thinking about it as having 60 seats available that are highly perishable, with normally 20 or so seats expiring, un-consumed every fortnight.

With that in mind I thought about two potential options:
1. Giving away a couple of seats as sponsorship to some groups I think are worthy, and
2. Selling some excess tickets at a last-minute discount, priced just above our cost.

Because I have recognised that I am nowhere near as clever as I used to think I was I circulated those thoughts to my “brains trust”. Below are paraphrased versions of their answers.

Scott Kilmartin, founder of haul:  In the theatre business they call giving away free tickets “’papering the room”’, which is great to add atmosphere and to get some potential new members through the door. If you keep the papering relatively quiet and do it with a view to building alliances and tie it in to some sponsorships I think it’s a good idea.

Peter Lewis, GM of business development at Hydrix: It would be worthwhile to be quite strategic with sponsorships and deal with some unexpected groups that would certainly touch the demographic, eg the RMIT entrepreneurship course or recruitment companies like Mitchell Lake.

Jon Manning, director of Sans Prix: I would always say experiment and compare results. Discounting last-minute tickets though is contrary to current pricing wisdom because patrons should be rewarded for booking early, not for waiting until the last minute. Think about how airlines do ticket pricing, because those people are seriously good at it.

Bob Peterson, director of F3:: Experimenting with your business model is intelligent. However I don’t like selling off the perishable/fungible excess stock (discount model) even when/if you have a small number of pre-registrations. It sets lower expectations to the attendees, whereas gifting tickets can raise credentials. Last-minute discounting simply devalues your brand.

And yes, I had to look up fungible too.

I think the pattern was fairly clear: 

• Strategically gifting a few tickets on the quiet to worthwhile organisations = Good
• Last minute discounting = Bad
• Business model experimentation = Excellent.

Brendan Lewis is a serial technology entrepreneur having founded: Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill Club and Flinders Pacific. He has set up businesses for others in Romania, Indonesia, Hong Kong and Vietnam and is the sole Australian representative of the City of London for Foreign Direct Investment. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.