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Reggie Aggarwal, founder and CEO of Cvent, a cloud-based events-management software platform, describes a meetings and events industry that is ripe for disruption.
It’s an industry where conference attendees — equipped with their mobile phones, tablets and higher digital expectations — often drag events organizers kicking and screaming into the future (much as Skift discussed in this week’s new Trends Report, The Future of Conventions).
“They’re showing up with pitchforks and torches at the front gates of meeting planners and saying, ‘Hey, I don’t want to carry around brochures. I want everything on my mobile app, and so forth,'” says Aggarwal, who took the company public in August 2013 and raised $117 million.
Aggarwal’s Cvent is automating the request for proposal (RFP) process and envisions the day when conference attendees arrive at an event, are automatically registered, and have their event experience so personalized that they get recommendations on which booths to visit on the trade show floor and which ones to avoid at all costs.
There will be a tipping point one day, Aggarwal advises, but it hasn’t arrived yet.
Skift caught up with Aggarwal in Los Angeles on the trade show floor of the Phocuswright conference this week. An edited version of the interview follows:
Skift: What are some of the big trends you’re seeing in the meetings space?
Reggie Aggarwal: There’s a lot of changes going on in the meetings space. We like to say it’s the biggest industry you never heard of with $565 billion to spend at your own meetings and if you look at travel, for example, it’s $1.4 trillion and meetings falls within it. Almost 30% of travel is people going because of meetings or groups. It’s a big space and it’s changed a lot in a lot of areas.
It’s a progressive change. It’s what I call disruptive but disruption takes time. It hasn’t been like the online travel agencies where they came fast and furious.
Skift: It’s more of a conservative industry right?
Aggarwal: It is, yes. The reason is because it’s more corporate. Everything is moving to the cloud, of course. Mobile in particular. It’s transforming everything. It’s something that we call the experience economy. What’s happening is the experience economy is leveraging mobile and it’s leveraging mobile simply because everyone who travels has mobile phones.
They’re showing up with pitchforks and torches at the front gates of meeting planners and saying, “Hey, I don’t want to carry around brochures. I want everything on my mobile app, and so forth.” The reason I consider that a huge trend is within it that there’s so many other things that can happen. It’s increasing engagement, for example.
What everyone is trying to focus on is the attendee. Now the focus is what can I do to engage my attendee and give them what they need for the perfect trip or the perfect meeting from the attendee perspective. Mobile apps, social media, or now you can interact with the speaker, you can do polling and it goes on the screen.
That makes it so much more interactive. Technology is finally infiltrating event planning to a much deeper degree because the attendees are pushing it.
Skift: What other areas is technology impacting?
Aggarwal: Let’s just say in looking for venues. That’s an area that we’re the largest player in. The way people used to look for venues was very old-fashion. Pick up the phone and call. They look for references. They didn’t use online when they searched for a hotel. You do it completely differently now. Everything is done online.
In the meetings space, people were still going to Google and they’re still calling their buddies and they’re still just networking through to get the venue. They would, frankly, hijack consumer sites and try to look at those and then jimmy them. What Cvent did is build the largest marketplace in the world where we connect meeting planners with venues. In 2008, we launched it. We had about $50 million dollars of meetings go through our system.
Next year we’re anticipating $10 billion. We set an earnings call. I just put it out there that we plan to do $10 billion in 2015. We did $6.5 billion in 2013. Again, the move towards online is massive in terms of finding venues, which is the biggest part of the supply chain when it comes to a meeting planner controlling budgets. Most of it’s spent on the venue.
Skift: What about the debate about virtual meetings versus live events?
Aggarwal: I went on the road show when we were doing an IPO last year. The first thing a lot of Wall Street people did was attack live meetings. They said, “Hey listen, virtual meetings, WebEx, Go-to-Meetings. WebEx, for example, we started using that in 2000, right? It’s 12, 13, 14 years.” But the point is, it’s not like the future is here. With webcams, just everything was moving towards virtual.
What we saw happen is the opposite of what you might have thought. The more technology there was like that, the more people wanted to meet face to face. That’s what we call the event effect or the experience economy. People want experience. Nothing beats coming to this conference and meeting face to face, breaking bread and shaking hands.
Skift: Virtual meetings are still a trend.
Aggarwal: No, people are leveraging it. What’s happening is that we’re seeing people do hybrid events. What’s a hybrid event? I’ll give you an example. SAP had 30,000 people at their event, but then out of those 30,000 people who came physically, yet another 250,000 went to hybrid events which were videocast or streamed. They interacted with them beyond the 30,000 people.
What was interesting is we had the CEO of SAP, Bill McDermott, as keynote speaker at our user conference that we just had in Vegas. He talked about how much they spent on events and said SAP’s single most important event is its Sapphire conference. Not only does SAP have the 30,000 customers come in but they have the 250,000 or 300,000 who see that message. They we get the highest ROI, build relations with their customers, and build the brand.
Again, it’s going back to the importance of meetings and technology cluttering everything. When you’re on WebEx, you don’t know if they’re paying attention because you can’t see what they’re doing. When you meet in person, you’re forcing the focus on you.
On Wall Street, there’s two things going on. Frankly, it’s not like the events industry is growing at a massive rate. What is shifting of course is that it’s being automated. You have half a trillion dollar space that has not kept up with technology.
What’s going to happen is geolocation combined with iBeacons, which is your phone essentially, will enable attendees and they’re going to know you’re here. It’s going to print your badge. You don’t have to do anything. Eventually, you’re going to have things where you walk in and you’d be able to identify the right people to meet, the right booths to go to.
Skift: Technology will personalize your booth stops at a conference?
Aggarwal: Yes, that’s what it will do for sure. There’s a lot of things that are going on. The fact is people spend a lot of money on meetings and their goal is to meet as many people as they can. Knowledge share, content share and build relationships. Technology can make all three of those happen even more.
Eventually you’ll be able to register automatically and just pick up your nametag. Then, when you have your mobile app, they’ll start becoming smarter. A mobile app isn’t just to be a binder. It’s much more than that. I told you, it’s anything from interacting with the speaker, doing polling. It will help you determine whom you want to meet.
There’s gaming within it that can get people, when they come to an event you tell them to do some gaming to meet the sponsors. They will do it.
It’s amazing how they get into that.
Skift: How is the sharing economy impacting the meetings space?
Aggarwal: The sharing economy is a little different from meetings. Again, you generally have more corporate. From the housing perspective, generally speaking, the corporate space is different. It’s generally a little more formal.
The second thing is, for many types of events, it’s not in their interest. If I’m hosting this event, you’re telling the Marriott, give me all this space for free because I’m going to pack your hotel. I’m going to do a room guarantee. I don’t want them staying at Airbnb.
It really depends on the event itself.
Skift: But they’re staying with Airbnb anyway.
Aggarwal: Yes, if I’m a planner, the way I would capitalize on that is in terms of their effective cost. Let’s say this hotel is $300 per night. Maybe they could stay somewhere for a lot cheaper. I don’t know if you know Airbnb CEO Brian Chesky, I know him from Airbnb. He told me the story. We were at a conference and we sat next to each other where we talked for about two or three hours. That story started was, he was going to a conference in San Francisco and everything was sold out. He just crashed at his buddy’s place and it was an air mattress.
The point is, he was going to a conference. Now the positive for a planner is that if you go to Dreamforce, you can’t get a room. Maybe an Airbnb can actually enhance that meeting. Because they are limited by how many people can go, by how many rooms they can get.
In that situation, I’m sure Dreamforce loves Airbnb because they can get more attendees and they don’t monetize the hotel.
If you’re a smaller conference, and you have a room commitment, you want people staying at your hotel. Plus, for the collaboration part, it makes a difference. It’s like going to college and staying on campus or off campus. It’s an experience.
Getting back to your fundamental question about the sharing economy, meetings and events is different than groups. Meetings and events, now we’re talking more the business side. Again, from that side, the sharing economy can still be leveraged. They can reduce the cost of the attendee for an event and that helps the meeting planner. If you take an Uber instead of a black car, right?
Skift: That makes the conference more affordable.
Aggarwal: It does. The sharing economy will, I think, help do that. From a meeting planner’s view, that’s generally not their focus because they’re focused on minimizing the registration fees and the hotel cost in terms of if you stay at this hotel.
The other stuff, I’m not usually as worried whether you just spent $65 on a cab or a black car to get here, or $100. I think over time experience and cost will become more overarching.
Skift: You just acquired hotel-intelligence software platform Decision Street. What does that do for you?
Aggarwal: We are the number one source for what I call the water. The water is like the leads into the hotel. Globally, we’re the largest. I wouldn’t say in every country we’re the largest. We’re certainly the largest in the US. Increasingly, the world. We did $6.5 billion last year in RFPs (Requests for Proposals). That’s unique value.
Let me give you an example. Let’s pretend you’re throwing an event for your sales team. All your sales people around the U.S. are flying into Chicago because it’s in between the coast. A hundred people, two nights, three days, typical conference. What’s the value of that event? Let’s just put $200 a room night. It’s 200 room nights, a hundred each night. Some attendees might come early because they’ve come from somewhere else. Let’s just call it roughly 250 rooms spread across three days. Food and catering. What ends up happening is, what’s the value of that? That might be a $100,000 event because of what the hotel makes. That’s the unique value of an RFP.
They’ll send out to 10 hotels. One hotel will win it. When I talk about the $6.5 billion six and a half billion, that’s the unique value. That’s not like ten hotels get an opportunity.
What Decision Street does is, it helps scores them.
Skift: For the hotel?
Aggarwal: For the hotel. It’s so complicated, you have to look at the conversion likelihood before you put in your energy. You have to look at the room rates. You have to look at space availability. There is all these different things, variables you have to look at and it’s like a 4D image. It’s very complicated. These sales people, mostly do it through Excel.
What our tool does is, by hotel, they can basically put whatever criteria they wanted to help score the lead. There’s a bunch of different things you can look at. You can eventually pull the history. They can see, “Well this person has sent has sent 22 RFPs, which we’ve never won.”
Why do hotels like it? Because now they can put their time into getting a higher conversion. They put their energy into leads that matter. They can now get, again, they can analyze the data and they can start tweaking.
Skift: Cvent is a public company. How’s the company doing and what are some of the biggest headwinds you’re facing?
Aggarwal: As a company, I’ve been pleased with performance. I think we continue to grow at a very healthy rate, a very fast rate and continue to generate profits unlike a lot of cloud-based companies. We’re one of those rare companies that is having high growth and profits. For a decade, we’ve been profitable. I just think on the headwinds, our biggest competitor is manual processes.
Skift: That’s a lot of heavy lifting to change behavior.
Aggarwal: We’d like to happen more rapidly, but the fact is, it takes time. We’ve been doing this for 15 years, hopefully we’ll do it in another 15 years. We’re growing at a fast rate but it just takes time for people to change. Eventually, it’s going to be a tipping point where everyone is like, “I can’t use Excel and Outlook and Scotch tape and my own ingrown system. I have to go to an outside vendor.”