Four Stages of Controlling Event Costs

To outsiders, the cost of running an event is the rewards given out.

To onlookers, the cost includes the rewards plus the time and effort spent on developing the event.

To operations professionals, the cost of running an event is all the mental and physical effort paid from start to finish.

An event from start to finish is generally divided into four stages.

Every event begins with the planning stage and is executed in the subsequent stages (development, promotion, operations). To ensure the original operational goals are not compromised, too much must be paid. Operations is the initiator, while others are collaborators. When problems arise, everyone asks you what to do; when others encounter tasks they don't want to do or execute poorly, operations must fill the gap with human resources; when any issue occurs, operations cleans up the mess.

From start to finish, every stage of an event incurs costs.

Planning Stage: Testing the Operations Team's Experience Accumulation

Whether for revenue or user acquisition, activities are often linked to the company's annual and quarterly plans, then broken down into monthly and weekly plans. All planning revolves around achieving goals within a cycle.

Apart from collaborating with other departments for new user acquisition, the operations department's daily focus is on how to maximize revenue with the existing user base. In this area, operations takes the lead, with other departments providing support.

For supporting departments, what they usually see are specific execution plans. But behind these plans is the team locked in meetings, constantly refining, rejecting, and discarding ideas until a final executable plan is formed. During execution, adjustments and iterations are often needed due to various reasons.

Good event planning is always about choosing the most suitable option from countless alternatives. A driven team might keep only one useful page out of every five written, confirm a plan's feasibility only after exchanging information with four different departments, and spend three hours in meetings to finalize the basic framework. A less driven team can get by with minimal intellectual effort, simply copying competitors' approaches.

This process is where the operations lead and team exhaust all intellectual and physical resources to achieve the goal.

The earlier chapters on [Theme], [Rewards], and [Rules] all count as intellectual resources paid during the planning stage. Those articles raise numerous questions that need answers.

Suppose we design many good plans, but they may fail or be downgraded due to insufficient execution capability. Blaming others is pointless; considering execution levels and costs at each stage is crucial during planning.

Of course, with accumulated experience, team growth, and better judgment of collaborators' abilities, the intellectual resources spent on planning can be reduced over time.

Development Stage: Testing Operations' Collaboration Skills

Different events incur different development costs. Some are simple, like posting an event announcement for leveling races, login gift packs, or forum essays. But more complex ones require development, such as reservations and gift redemptions, lucky wheels, registrations, sign-ups, and quizzes. These involve page functionality development and database storage. Many events are also built directly into the game.

Some operations professionals write requirement documents like product managers, communicating with art, programming, and testing teams across departments; others delegate to more experienced colleagues. Writing requirement documents that developers can understand is a specialized skill. It doesn't end with writing; there are requirement reviews, interaction design, front-end and back-end development, and deployment.

It's essential for operations to understand development basics. If you design a gameplay feature and developers say it's difficult or risky to implement, you're forced to redesign, wasting time.

Knowing how to write documents makes communication with developers efficient. If not, rules are supplemented during development, and cross-department collaboration costs can be enormous.

Experienced teams modularize development features for reuse. For developers, repeatedly building the same thing (professionally called 'reinventing the wheel') is like treading water, doing manual labor, and they lose motivation.

Event templates are like a weapon arsenal, accumulated by teams. Take lucky draws: there are only a few types of random events worldwide. Once templated, each time you only need to update the design and configuration tables. The more templates in the arsenal, the more strategies operations can deploy.

This cost decreases as skills improve and templates are built.

Promotion Stage: Testing Operations' Planning Ability

The importance of promotion cannot be overstated; it directly affects participation and reach. This work also has a framework, detailed in my earlier [Promotion] chapter.

For some events, like revenue and engagement activities, promotion is done independently by operations, including building channels, writing copy, and controlling pacing.

For others, operations cannot do it alone and needs help from other departments.

Materials, copy, and ad graphics are produced by designers.

Content distribution channels, exposure frequency, and marketing resource reservations are execution tasks, handled by marketing and business development teams.

For mega-events, the company often assigns marketing, business, brand, and PR leads to support the operations team. Small events are handled by operations directly.

Between mega-events and small events, there's a middle ground where you often need help from others. This tests your organizational skills and emotional intelligence. If you fail to organize well, causing chaos and repeatedly bothering others, even high EQ won't help. There are many steps where others could leave on time, but can you persuade them to work overtime?

Here's a preview of the upcoming [Execution] chapter: how to effectively mobilize public human resources.

This cost decreases as workflows are refined.

Operations Stage: Testing Maintenance Costs

1. Operational Costs Due to Rule Design

For example, essay contests or beauty pageants require effort in ranking and judging. Some competitive events are held in rounds; after each round, operations must verify results, write battle reports, and announce advancing players.

A seemingly trivial question: Should events run from 0:00 to 24:00, or from 12:00 to 12:00 the next day?

My suggestion: If rewards are auto-settled, it doesn't matter. But if manual effort is needed during the event, design it to end at noon. Similarly, avoid ending at 18:00 on a Friday before the weekend.

Some events require long settlement times. Data colleagues need to extract data, then verify results with you, then you announce winners and settle rewards. If you design it to end at 24:00, they'll have to work overtime until midnight and then until 1 AM. They'll be cursing inside—why should they work overtime for you? On the other hand, we need to serve users by announcing results promptly. If it ends at 24:00, you'd announce at midnight, and if there's an issue, adjustments are very troublesome. No one wants to come out at night to clean up your mess.

Similarly, for new events that haven't been run before and whose processes aren't smooth, don't launch them before long holidays. If unstable, problems during the holiday will ruin the holiday for the entire support team. (Here, 3,000 words of painful lessons are omitted...)

2. Reward Distribution Costs Due to Settlement Methods

Rewards auto-settled in-game are excluded. For page-based events outside the game, some rewards are delivered as CD-KEYs. For forum events, you need to send private messages; for page events, you need phone numbers, then ask platform colleagues to send CD-KEYs via SMS.

Some events include physical and cash rewards. For physical rewards, when collecting user addresses, you often get weird addresses, and you have to verify each one (or ask customer service to help) before shipping.

Cash rewards are not as simple as WeChat or Alipay transfers. Companies usually go through finance for labor fees, with internal approvals. You need to collect bank card details and request faxed ID copies—troublesome.

I once ran a large competitive event and gave away 100 iPad mini 2s. The winners were all wealthy users. The process of verifying addresses was tedious. At that time, a new model was about to launch, and the procurement process for 100 units was already done. Three wealthy users commented on the CEO's Weibo, asking for specific colors and offering to pay extra to upgrade storage (16GB to 32GB). The CEO promised each of them, interrupting the procurement process. From finance to suppliers, everything had to be redone. Ultimately, for those three users, the other 97 received their devices a full 1.5 months later than expected.

Looking back, it was foolish (we could have just bought the three specified units, but procurement rules and policies at the time didn't allow it; finance was in charge, and operations couldn't change policy). There were many ways to avoid or solve this, but in reality, due to information asymmetry between departments, promises had to be kept, and processes were irreversible, leading to this situation. This is my personal experience, memorable and frustrating.

In hindsight, past actions often seem foolish, but at the time, they were caused by a mix of factors. We can only be wise after the event.

All maintenance costs depend on prior planning. If you leave enough time during design, these aren't a big deal. But the worst are costs from unexpected incidents.

3. Maintenance Costs Due to Unexpected Incidents

Despite careful checks and testing, incidents happen. Whether caused by our own mistakes or other reasons, the event lead must handle the aftermath.

No matter how well you write the rules, some users will have questions. This is normal. If feedback exceeds a certain level, you must continuously update and explain. Some users don't read the rules and ask questions when they encounter issues. In such cases, either operations acts as customer service or you prepare an FAQ and train customer service to assist. These consume time and energy.

If developers are incompetent, bugs occur, requiring temporary fixes. Some issues aren't bugs but slow access, browser incompatibility, resolution problems, lack of load balancing, or inability to handle concurrent pressure—a series of experience issues.

If any stage isn't controlled well, it creates uncontrollable risks. The biggest cost is never money but the human resources lost to mistakes and the opportunity cost of time wasted fixing them.

Incidents are called incidents because they're unpredictable. To avoid them, you rely on experience. I'll detail this in the upcoming [Risk] chapter.

The above relates to various event costs, aiming to help you build a cost-conscious mindset. Finally, let's discuss methodologies for improving efficiency and reducing costs in organizational operations.

Everyone Wants to Improve Efficiency and Reduce Costs

Our daily time is fragmented by various tasks: brainstorming in meetings, writing documents at desks, communicating and collaborating in various settings...

We all know that discussing quality without considering cost is nonsense.

Almost every manager emphasizes efficiency. If they're verbally diligent but lazy in practice, it's just wishful thinking. Everyone has the subjective desire to be efficient; the question is how. Merely emphasizing guiding principles doesn't help actual business operations.

Every professional with years of experience should have two frameworks in mind: an effectiveness framework and a business framework.

Effectiveness framework means: every time you do something, how many company resources are used? How much time is spent? What quality of results is achieved? You should always have a sense of these.

In the event context, quality (event KPIs) is set. The only way to reduce costs is to improve efficiency—delivering better results with fewer human resources and less time. Managers emphasizing efficiency should start from these three angles.

Business framework, in simple terms, is the department's operational manual.

Each department has its business modules; each module can be broken down into stages (like this article); each stage can be further broken down into execution details. This breakdown process is building the business framework.

When writing the department manual, it's not just about telling people how to do things, but also providing past experiences, common pitfalls, and solutions (most people lack the willingness or ability to do this). It's difficult, but achieving it is rewarding. It's also a necessary condition for a manager to become a 'hands-off' boss, and it's your core competitiveness.

The effectiveness and business frameworks are mutually causal and iterative. Inexperienced people lack a business framework but can use the effectiveness framework to think about problems. With accumulated experience, they gradually build a business framework. Those with a business framework, after repeated validation by the effectiveness framework, approach everything with confidence.

• The more refined the business framework, the more efficiently the business runs.
• The more refined the business framework, the better you can measure the resources needed to achieve goals.
• The more refined the business framework, the better you can see if you and your department are operating efficiently.

Returning to the theme of cost, refining the business framework as much as possible is the only solution to pursuing efficiency and reducing costs.