Why Measure?
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 credibility.
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 Benefits
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:
Pre-show marketing
Booth staffing effectiveness
At-show promotions success
Press coverage
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.
Measurement Consistency
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.
