Let’s face it, exhibiting at a trade show is not cheap. Despite being an extremely effective method of marketing, for many it can be cost prohibitive.
For anyone that does commit a budget to trade show exhibiting, it is imperative to calculate the return on your investment.
If you can’t determine the value of exhibiting, you might be wasting a ton of money by doing so.
How do you know if you are generating business from exhibiting? How do you know that you aren’t spending more to generate that business than you are earning from it?
These are common questions. Answering them has been identified as one of the biggest challenges for trade show marketing professionals.
So how do you answer them?
There are a couple of ways to look at the return on investing in your trade show marketing – by return on dollars spent and return on business objectives.
We evaluate both of these returns because some aspects of trade show benefits, especially brand awareness, are very difficult to measure and assign a dollar value to. But, they are nevertheless a benefit for your business as a result of trade show marketing.
To get started evaluating your return on investment, you need to have goals and objectives outlined and assigned to each function of your trade show exhibiting. Approximate read time: 29 minutes
What are the goals of your business?
First you must know what you are trying to achieve by exhibiting at the trade show. There are so many benefits you can gain for your business with trade show marketing.
Do you need to grow sales? How exactly will you do that with trade show marketing? Will you sell directly at the trade show? Are you trying to generate leads? Grow relationships? Meet new suppliers?
All of these different goals will have you selecting different tactics while exhibiting at a trade show. So, you must identify your why for being an exhibitor.
Once you have your objectives laid out, you need to then express them as quantifiable goals.
“We expect to generate 100 leads from the trade show.”
“We expect to sell 100 widgets while at the trade show.”
When you know why you are exhibiting, and that why is tied back to quantified business objectives, then you can identify which activities need to be tracked and measured to know if you hit your goals.
Measurement & Tracking
“What gets measured gets managed.”
It is imperative that you measure all the variables that relate to your trade show marketing goals. If you are trying to generate leads at the trade show, you need to be able to track the leads that came from the trade show.
If you are trying to sell products at the trade show, again, you need to be able to track the sales that occurred at the event, separate from all other customer acquisition channels.
Data intelligence is a requirement for calculating a return on your investment. Without it, this exercise is useless.
So, your first step is to track and measure the variables that prove or disprove you have reached your goals.
Surveys – Before, during, and after the show
One way to get your data is through the use of surveys.
Are you able to communicate with attendees before the event? You could arrange a pre-event survey regarding your business. You can also conduct short surveys during the event as well as after the event.
Comparing the results you can see if an impact was made on things like brand awareness, product or service awareness, etc. The point is to measure the recall of your brand or product pre and post show.
Remember, there is a cost for running surveys that you should also consider in calculating your overall trade show expenses.
Lead generation & sales attribution
If you plan on lead generation or direct sales activity while at the trade show, you must be able to track them specifically to the trade show.
Regardless of which you are trying to accomplish, having a built in tracking mechanism that reports this data at a later time is crucial. Make sure you are able to track both digital leads and sales as well as leads and sales collected directly.
You must be sure you are accurately attributing all leads or sales to the trade show. And you must be able to track leads through the entire buying process.
The reason is simple. This is how you will determine what revenue you generated from the trade show.
Internal Financial Numbers
It is also a requirement to know the full lifetime value of your leads and your sales. This financial data is the other half to the equation when calculating the dollars and cents return on your trade show budget.
Using this information, you can work backwards to know a break even point for your trade show budget, which can be then be used to set your goals.
For example, if you know that your trade show is going to cost approximately $100,000 for exhibiting, and you know that your average value of each lead is $10,000, then you know that you need to generate 10 solid leads from the trade show to break even.
With this information, you can then develop your trade show marketing to position you for attaining those 10 solid leads.
Clear and measurable goals are the foundation of successful trade show marketing. Let’s look at some common goals we uncovered from our client research.
Goals Through the Lens of Revenue
According to our research, businesses have some combination of four main goals when exhibiting at trade shows:
- generating leads
- promoting products
- building brand awareness
- networking & building relationships
You probably have at least one, if not more, of these goals for your own trade show marketing. I would argue that everyone benefits from brand awareness as a result of trade show marketing, whether it is a stated business goal or not.
Aligning your brand with the selected trade show will have an impact on how others see your brand. In most cases, if you have selected the right trade show, that will result in a favorable view of your own brand.
Beyond brand awareness, you most likely fall into one of the other three goals as your main objective for exhibiting at a trade show. Let’s take a look at each one in more detail.
Lead generation is a very popular goal for a lot of businesses exhibiting at trade shows. The trade show event does a great job of attracting a specific audience to attend their event.
Marketing 101 is to know your audience. If your company’s target audience is in alignment with the trade show audience, then you should exhibit at the trade show.
Now, make sure that you are able to capture leads while exhibiting. This can be accomplished through hand completed forms or digital forms. It might be as simple as collecting an email address or as complex as qualifying leads into prospects in person.
Remember that leads need to have a value assigned in order to know how many you need to generate from your trade show marketing.
Measurement & Tracking
Once you have finished your sales process with all the leads generated from the trade show, calculate their worth by dividing the total business won from the leads collectively and then divide that by the total number of leads generated.
Total Leads: 150 – Total Business: $75,000 – Value per Lead: $500
Now compare this to your preassigned value. Is it higher? Lower? Comparative? You might find that the leads generated from your trade show marketing are more valuable than from other acquisition sources. You can then alter your overall marketing budget appropriately.
Aside from lead generation, promoting and selling products at a trade show is probably the most common goal for exhibiting at a trade show.
Whether you sell directly at the trade show or not, make sure that you can attribute sales from the trade show. Use promo codes, special URLs, whatever it takes to know that sales resulted from the trade show.
If you are promoting products pre-sale, then it is important to use pre and post show surveys to assess impact. You can also take pre-orders directly.
Measurement & Tracking
Once you know that a sale has resulted from your trade show marketing, you need to calculate lifetime customer value of your sales and apply that to all of the sales resulting from your trade show.
This number will give you an idea of how successful your trade show was.
Total sales: 15 – Total LTV: $10,000 – Total ROI: $150,000
Networking & Relationship Building
Networking and relationship building is a gray area in terms of being able to measure bottom line impact. Yet this popular goal of trade show marketing is also very valuable when executed properly.
You can measure dollars and cents values of solidifying customer relationships that extend and improve lifetime customer values.
You can also measure dollars and cents values of any new relationship made from meeting at the trade show that results in a sale or a referral down the road.
For either of these, you need to be able to quantify that later value and track it back to the result of exhibiting at a trade show.
Beyond direct measurement, there is value in face-to-face meeting with your target audience. Being able to put a face to a name, while not necessarily directly quantifiable, can be big when it comes to earning future business in your market.
Save money on meetings
How much does it cost to get in front of your clients and other important colleagues outside of a trade show? Can you use the trade show as a convenient meeting place to save on these costs?
While this isn’t a return in the sense of income, it is a return in the sense of retained income that you didn’t have to spend. If this scenario applies to you, be sure you assign a dollar value to the retained income when calculating your total return on investment.
As mentioned before, everyone benefits from brand exposure at a trade show and therefore brand awareness is a return for everyone. But it is also the hardest to measure and to quantify its value.
As previously suggested, you can try to measure your impact on brand awareness with pre and post show attendee surveys and recall of your business specifically.
You can also assess a trade show’s impact on brand via other branding channels, such as social media. Are you getting an influx of followers around the event?
Media coverage is also a direct result of, and leads to, more brand awareness. If your trade show event is covered by the media, you may be able to use PR tactics to get more exposure, increasing your brand awareness as well as your other goals.
Other methods of gauging brand awareness include the amount of direct traffic that is coming to your website and the search volume of your branded keywords.
If you can track the activity of these channels through your entire lead generation and sales process, you can get a better idea of brand value.
Using this data, you can compare the values pre and post show to see if there was an increase in brand engagement signals and what those increases will do to the bottom line.
Goals Through the Lens of Expense
[/fusion_title][fusion_text]We also need to consider how your budget is spent and the impact each expense has on achieving your goals. Each expense related to exhibiting at the event must have a corresponding outcome desired.
For example, buying event advertising or sponsorship should increase the traffic to your booth. You need to then measure the attendance in your booth, the best you can. Working backwards, you can assign a guestimate value for the advertising to know if you received value for that expense or not.
If you can’t justify a cost with a corresponding business objective, then there is no reason to incur that cost.
Lastly, when you are thinking about trade show costs, you need to consider the soft costs of trade show marketing.
Costs beyond the trade show bills
Pre show preparation
How many people does it take to prepare for your trade show exhibiting? How much do you need to pay them to prepare? This is a cost beyond the booth cost, advertising, floor space, etc. Do not forget to include it in your overall expenses when calculating your return on investment.
There are incidental expenses that are sure to come up during the trade show event. These could be ordering more printed marketing materials because you didn’t have enough. Or maybe you underestimated how much coffee attendees will drink and you had to order more from the convention center.
Regardless of the reason, you need to be prepared with a contingency budget for these unexpected costs you could encounter during the show. And be sure to include any you incur in your final ROI calculation.
Calculating Return on Investment
Length of sales cycle
Some businesses could have a long sales cycle, weeks or perhaps months in length. You must take this into consideration when calculating your return on investment. If you have a long sales cycle, performing your ROI analysis doesn’t make sense until your sales cycles has had the time to complete.
Customer Lifetime Value
If you are tracking customers back to leads generated during (or because of) the trade show you exhibited at, then you are able to assign a value to each lead that becomes a customer and that should be the lifetime value of your customer.
Calculating Expense & Return
Once you have paid all the bills, totaled up all your soft costs and incidentals and unexpected costs, you will know the final cost of what you paid to exhibit the trade show.
When you know this number, and you know the revenue generated, you do the simple subtraction.
Income less expense = return on investment
If you have a positive return on investment, you can then divide that return by how much money you spent to see the profit margin.
Income from the trade show: $215,000
Cost to exhibit at the trade show: $135,000
Return on investment: $215,000 – $135,000 = $85,000
Profit margin: $85,000 / $135,000 = 63% profit
If you find yourself with an appropriate profit margin from trade show exhibiting, then you should consider it a successful customer acquisition channel for your business.Contact Xibeo