Does giving away the use of your event space to local meetups and groups help grow your memberships?
The answer—of course—is that it depends.
Let’s look at this tactic and go back to the basics of marketing.
What is marketing? Mostly, it’s about getting your business out in front of your potential members.
The better experience of your company they have, the more likely they are to become a member. Simple, right?
So if you’re giving away event space to meetups, does it produce a positive return on your investment?
Here are a few things to consider:
Who are the attendees of these meetup events?
Are they small business owners, freelancers, professionals, executives, hobbyists, or something else?
Now ask yourself, who is your target market?
Who makes the purchase decision when choosing a workspace like yours?
Are you bringing your target market?
If so, continue to the next points.
If not, you may wish to consider why you’re giving away your event space.
Takeaway: Only give away your event space with a reasonable expectation that enough people in the group will be in your target market.
2. Track Operational Costs
How much does it cost to keep your doors open after hours to host these meetups and events? Write that number down.
If you’re giving away your event space for free, it should be a line item on your marketing expense reports.
Otherwise, it’s not really marketing, it’s throwing money away.
Let’s say it takes one staff member to stay late, and you cover some incidentals like bottled water and coffee. Write down those costs and chalk it up to marketing and lead generation.
But only do this if condition 1 (relevancy) is met.
Takeaway: Internally track all variable costs resulting from keeping the doors open longer. Consider this a marketing expense.
3. Understand Opportunity Costs
Unlike operational costs (which are line item expenses you’ll see on your balance sheet) ask yourself these next questions honestly:
- Would they have paid for the space if you said no to giving it away for free?
- Would you have otherwise sold the same space to someone else in that time slot?
Let’s look at the first question. It’s usually easy enough to tell whether they would have paid. Normally, if the organizers of the meetup are doing it as a non-profit situation, it’s likely they aren’t willing to pay.
If they are selling anything, or the meetup is being held by your local marketing agency for example, you may be in a position to ask for money.
There’s an opportunity cost to giving away space to people who would otherwise pay.
Which brings us to the second question, would someone else have booked the space? If so, that lost revenue is now a part of your marketing costs. It won’t appear on your balance sheets, since opportunity costs are not true expenses, but it should still appear in your marketing budget spreadsheet.
Takeaway: Don’t give away space for free when you could make money on the space for the same time-period. Unless, of course, the opportunity to attract highly relevant target market attendees is too good to pass up (and you can’t get them to pay for it).
4. Have a Budget
It’s one thing to treat free event space use as a marketing expense. It’s another thing to not track it or keep a budget.
Having a “free event space” budget can be a useful thing to include in your marketing budget.
Have an amount of money you’re willing to allocate to each month or quarter. Stick to that amount as best as possible unless you’re seeing exceptional and consistent results.
If you are giving it away without a limit or knowledge of the invested costs, you risk giving away the farm or wasting your money.
Takeaway: Have a limit on how much you give away, and/or keep track of how much it’s costing to host these events for free.
5. Track Return on Investment
As with any marketing expense, it’s good to at least try tying it back to revenue.
Do this in three steps:
- Ask every single lead how they first heard about you. Mark it in your CRM or member database.
- Determine the lifetime value of that member over time (average number of months x total revenue for that member)
- Compare your costs to your expected lifetime value
This is not a perfect science. It’s impossible to know exact revenue and acquisition costs for all marketing tactics. But you should be able to look at the revenue from members who discovered your workspace at a free meetup and your total costs to host them.
Looking at the numbers should give you some indication of whether this channel/tactic is working for you. It cuts down on the guesswork.
Takeaway: Track your lead source and compare it to revenue to see if you are a) generating new members with free events and b) doing so at a profit.
Giving away event space and meeting rooms can be extremely tempting, especially when you’re not full. It can feel like you’re bringing in a ton of leads, and maybe you are!
But it’s important to ensure that when you do give away free space, there’s a reasonable degree of expectation that the attendees will be in your target market.
Take it a step further by tracking the resulting revenue and accrued costs to giving away your space.
Otherwise, you risk wasting your precious resources on untargeted marketing, or worse.
Edits from other workspace experts
My rules of thumb for giving away free space were:
- the event must be non-commercial (i.e. the organizer isn’t making money or promoting a product overtly)
- the event must bring in people I deem likely candidates for members (e.g. any kind of entrepreneurship, startup, or freelancer meetup is great. A gathering for CMOs of local tech firms is not (unless I’m trying to recruit corporates to locate in my space or develop a remote work program)).
- I will do absolutely zero organizing or marketing. We provide a blank slate for your event. You set it up.
- No food or messy (sticky) drinks unless you pay a cleaning fee, which goes to my cleaner.
- I avoid politically charged events or political fundraisers.
- In general, if you’re fundraising for a cause, some of that money comes my way, unless it’s a cause I really support and want to be seen as supporting.
- I get to pitch to the crowd. I try (if I have time) to tailor my pitch to the audience and my goals with them.
- I’m doing you a favor, be nice. If you’re not nice, I won’t host you.
- *Optional. Deposits are nice for certain events. But it’s certainly a barrier for some. If it’s a large event with food and drinks, a deposit should probably be required in case somebody spills their beer on your sofa or breaks a sink in your bathroom (true story).
This all comes after your space becomes a destination for these requests. In the beginning, the fight will be to get anybody in your space at all. But assuming you’re past that, this list is my free event hosting bible.
Jeannine van der Linden (Managing Partner, Open Coworking) says in response to my question, “Has anyone had any verifiable new members as a result of giving away event/meeting space after hours to MeetUps?“
Not like that, no.
I have had people sign up after sponsoring Meetups and events, and I have had very good results in letting local theater groups use our space for various things in exchange for which they do some on the ground marketing which is planned in advance (theater groups are very good at guerilla marketing :-))
But I think just giving away the space during “worthless” hours and hoping that by some process of association new members will appear is doomed to fail.
Not saying you are [doing that], but I think a lot of people do, and then they feel that having Meetups and so on doesn’t work. It does work but you have to do it clearly, I suppose I would say. 🙂