In the era of big data and tight budgets, every expense needs to be
justified. Moreover, measurement of all marketing programs is
expected, especially for trade shows and events. Tracking the number
of impressions from any particular marketing channel was much more
difficult ten years ago than it is now. With the advent of online
marketing, return on investment data has moved from a loose
requirement to a firm expectation. The expectation has moved from
“Trade shows are the way we reach our customers and create
awareness” to “Tell me how many new customers we added to our
database during this event to justify the expense.” Trade shows and
events can be really effective, but constant adjustments are needed
to maximize their effectiveness. Good measurement helps us justify
their existence and adjust our tactics as needed.
In today’s business environment, a
potential customer does not need to attend a trade show to find a
company or the basic information about its products or services. If
we are doing our job as marketers, customers can find our business,
learn about what we do, and contact us online any time of the day or
night. So, why do we even need to host an event or exhibit at a
trade show? Because in this setting we can give our customers an
experience, differentiate ourselves in a unique way, teach them
something they can’t just learn via an online tutorial, answer their
detailed questions, give them a demo, learn more about them and
their needs, and further engage them in conversation.
How Do Exhibitors Measure?
When we surveyed exhibitors most of them justify their presence at
trade shows via lead counts, the opportunity to build stronger
relationships, and saying they are “increasing brand awareness.”
While these are undeniably good objectives they are not the best at
measuring the effectiveness of the show as compared to other
marketing tactics. When exhibitors are required to measure their
event effectiveness the top three metrics used are lead counts,
booth traffic and number of client contacts. Unfortunately, lead
counts, booth traffic, and client contacts do not necessarily
indicate the quality of those “leads” either and are not providing
decision makers with an easy way to compare the effectiveness of a
show to other ways of gaining awareness or clients. Were these
individuals for whom you got lead information actually qualified
contacts, or were they someone with limited interest who just liked
the sales incentive being provided? The good news is that the
fourth most used metric for measuring trade show effectiveness is
the Return on Investment (ROI) of the event. Return on investment
is calculated by figuring out how many new net dollars are earned by
the company over the event marketing investment made. Skyline
defines ROI as sales generated/cost of marketing. This is what we
use in our Measurement Made Easy! CD. Another option is to use ROI
= net margin/investment where Net Profit = Gross Profit – expenses.
These metrics can be more defendable than just lead counts or booth
traffic and help marketers compare the relative effectiveness of
trade shows to other marketing programs such as online advertising.
It will never be a perfect comparison but providing easy access to
transparent consistent data will lend your trade show program
Why Don’t More Exhibitors Use ROI?
You may be wondering why so few people measure the ROI of a trade
show or event. I think that the simple answer is that it can be
hard. It is simple enough to add up the cost of an event, but
assessing the revenue generated by that event can be complex. While
we intuitively know that new contacts that are made have the
potential to develop into sales prospects, and that we are nurturing
existing clients that may have gone elsewhere without the
information or relationship building provided at the event, it is
not always easy to quantify.
Accurately evaluating the value of each lead can be challenging.
Determining how to value the sales revenue generated from a new or
existing customer who visited the event is important to do before
the show. It is also important to keep that methodology as
consistent as possible year after year so results can be compared
from one year to the next, and between shows.
Also some marketers may be hesitant to assign revenue expectations
to their arguably much more valuable leads and have them compared to
internet leads that are much cheaper to come by, but may be of
questionable quality (potentially someone who just stumbled onto the
site doing some price shopping).
For example you may choose to give some credit for the revenues
obtained from an existing client who attended an event for a period
of 6 months after the event. Sales may argue that no credit should
be given to the event because they would have made the sale
regardless of that event. Ensure that any way you choose to
attribute client revenues to the event, the methodology is approved
by your leadership team.
Here is an example: If you spend $50,000 on your exhibiting costs
and were able to track that the clients that became leads at the
show spend $200,000 with your company within six months, you would
estimate that the ROI for that show is: $200,000/$50,000 = 4. So
for every dollar you spent you were able to generate $4 in sales.
The really hard part of this calculation is getting at a generally
accepted estimate of your trade show related gross margin.
Benefits of Calculating ROI
Once you are able to calculate the return on investment of your
shows using consistent standards, you will be able to assess the
value of that investment as compared to other tools within the
marketing mix. In addition to that, you can compare shows to one
another and to the return you expect from an event. Depending on
the length of your sales cycle you may have to check back on the
results of your leads at various times and adjust your numbers as
sales materialize months after the show took place.
In addition to comparing results between trade shows and comparing
trade show ROI with other elements of the marketing mix, these
measurements will alert you when you need to change your trade show
strategy. For instance, if a show has good attendance from your key
customers but the ROI is not showing positive results, you may want
to tweak your show strategy rather than give up on the show
altogether. Some ways of improving show effectiveness may be
improving pre-show promotions, staff, follow up, etc.
Beyond ROI – Quantifying Other Event
Another great tool to use in this effort to quantify, communicate,
and improve trade show performance is a post-event evaluation. While
this may not provide immediate benefits to that year’s ROI it will
enable the team to discuss what worked and what didn’t during the
year’s trade shows so they can optimize future events.
Items to discuss and evaluate include:
Booth staffing effectiveness
At-show promotions success
Make sure you schedule your post-show evaluation before you go to
the show so you don’t forget about it once you get back and caught
up in the rush of following up on all your great leads.
In closing, whatever measurement method you choose, use it
consistently. Ensure you have a point person that is responsible for
evaluating and communicating trade show performance to leadership
and that he or she keeps the process as consistent as possible over
time to help compare show effectiveness across the board.