How do you justify exhibiting at a trade show? I suspect this is a thorny issue for a lot of companies. It’s a large expense, it’s not usually measured very well by the exhibitor, and the show company can’t measure the benefit to the exhibitor directly. With no one measuring, it can be hard to justify trade shows in the marketing mix.
People think that trade shows are about getting new leads. This is a little like saying going to the mall is about increasing your self-esteem and life outlook. Yes, the trip may result in that, but what you do at the mall is shop and buy stuff. What you do at a show is meet with people and communicate with them. They may become leads, but really you’ve made a connection that can’t easily be made any other way.
So rather than calculating what a lead is worth, or wether or not a sale would have been made but for the show, let’s consider this on a much more basic level. It’s about visiting with people.
Let’s start with a basic assumption: On average, your company meets with one person per hour per employee while at the show. I’m not considering just planned customer visits, but all the contacts that happen. Industry colleagues you chat with, but otherwise wouldn’t. New people. Competitors. Suppliers. Press. Your network, old and new.
Sure, there are empty hours, but there’s also the 3-hour dinners with customers and others as well. I think one visit per employee hour is probably quite conservative, the real answer is probably closer to 2-3 per hour.
So let’s say you have a small booth at a major show. You’re going to take 5 employees, and the show is 4 days long. That’s about 200 visits that will be made at the show. What would it cost to make those visits? Would you even bother, with most of them? Now many of these visits wouldn’t merit a trip on their own, because it would be far too expensive. But that’s where the value of a show really comes in – bulk buying of visit hours, with very low marginal cost per visit. It’s a unique situation in business, except for similar events like conferences.
Going back to our example, you have 5 employees going to a show, travel’s probably $7000, booth is $3000, another 5k in other stuff. Let’s round it up to $20k and you have $100 per visit. that’s pretty cheap.
But STEVE, c’mon, what about shipping equipment and samples and what not to the booth? What about the booth itself! Do you know what these things cost?!?
Yep, they’re expensive, but they’re not really part of the visit, are they? Companies do these things for branding and image related reasons, not because they couldn’t meet with customers without them. I’m not advocating they just put up card tables and leave all the product at home, I’m simple stating that costs need to be allocated where they belong.
Even so – let’s add them in. Wow, that per visit cost went up, didn’t it. BUT you have to remember that now we’re talking about a visit where your employee toted along some rather expensive equipment just for that visit, including a custom-built meeting room. That doesn’t happen very often, does it?
Now let’s consider another aspect of this: Scheduling.
In our example, there were 200 visits. Do you think you could schedule those 200 visits in four days without the trade show? Do you think you could get them all in even in a year? Probably not – many of those visits were ‘dry holes’ – people you thought could help but couldn’t. Or thought would be interested in having help but weren’t. Or whatever. 1 in 10 perhaps turns out to be valuable, but that one probably wouldn’t have taken your call without the show. Think about it – many of the people your company met with aren’t friends or acquaintances, they’re people who don’t really know you. Are they going to jump at having you come visit them in their office – let alone fly to see you? What would you have to offer (i.e. dinner, lunch, whatever) to help persuade them to give you some time?
Consider the opportunity cost of this.
When I was a product manager in the printing equipment business, I remember one show where a customer had come to talk about a rather involved, space-age kind of project. Very cutting edge, and there were a number of technical issues. Because I was at DRUPA (the largest printing equipment show on the world), in one day I could meet up with the relevant people to determine the feasibility of the project. Outside of that show it would have taken months. The point here is not that new projects are likely to crop up, but that you have access to a huge array of people in a very convenient way.
One last thing
Do you have employee meetings? They’re expensive, right? How about team building sessions, or other events designed to get people out of the office together for a little bonding? Travel to trade show, along with the time spent a trade show provides some of the same benefits.