The Case for Calculating Trade Show ROIJanuary 9, 2019
For anyone who’s tried to calculate trade show ROI, the following refrain may sound familiar: We know that 50% of marketing dollars are wasted, we just don’t know which 50%.
While it shouldn’t be a mystery how marketing investments magically deliver (or don’t deliver) new customers, without a system for measuring return on investment, it’s very difficult to know what is wasted and what is not.
Why trade shows deliver marketing ROI
In B2B sales, most marketing dollars are spent with the hope of someday getting face-to-face with the target prospect. Trade shows deliver the most efficient way to this objective.
Trade shows are the only form of B2B marketing that put you in direct contact with prospects. The challenge is that prospects are not labeled, therefore you need a highly effective mechanism for identifying them in the sea of trade show participants.
Good marketing materials speak directly to your target prospects—those who have a need, the resources to fulfill that need, and urgency for a solution.
How to know if you’re spending efficiently
The answer is simple: measurement. If you can’t measure it, you can’t manage it, which is to say the only way to manage your marketing budget efficiently is to know precisely how well each mode performs and how to improve it.
There are two types of measurements in trade show marketing: absolute and comparative. Absolute measurements are firm or known inputs to your strategy plan. Comparative measurements allow you to measure results across events and over time. Both should inform your decisions about how much to spend to maximize trade show ROI.
How to calculate Trade Show ROI
Return on investment measures what we get for what it costs, over what it costs. In other words:
ROI = (Gains – Costs)/Costs
The easy input in this calculation are the costs: direct and indirect costs such as event fees, display costs and staffing. For more on cost considerations, check out our post: Factoring in Display Costs to your Trade Show Strategy Plan.
Gains are a bit more complicated to calculate but when done well, point directly to your greatest marketing inefficiencies.
Defining gains or metrics for success will look different for every company. Whether it’s cards collected, number of quality prospects, or media traffic generated, there are hundreds of measures that one can use to define a successful event.
The key with metrics for success is to determine which is the best indicator of future sales and to set up a simple process for measuring against it.
5 metrics for success
We notice that 10%-30% of exhibitors today offer giveaways that have nothing to do with their product or service. The iPad is a perfect example—unless you’re in iPad sales. As a result, the contacts generated through these giveaways more likely than not have very little interest in your product or service.
Depending on the extent to which you have selected an offer that speaks directly to the unique needs and desires of your buyer personas, cards collected will be a useful measure of prospects engaged versus contacts who may or may not be prospects.
Number of Quality Prospects Identified
Assuming you’ve come to a trade show with pre-identified buyer personas, this is a measurement of how many of these target prospects enter your booth.
Cost per Lead
This is a calculation of your display costs over how many leads are generated in the booth.
A measurement of your exposure, this is especially useful for younger companies that are scaling and investing in marketing to build brand identity as well as generate sales. Younger companies may see a more direct line between marketing and revenue generated, making this a more valuable measurement.
One of the challenges to using revenue generated as a metric for marketing success is the amount of time it can take, particularly for big ticket items, to complete the sales process.
With delays of anywhere from 3 months to 6 years, it can be difficult to link unique sales to specific trade show investments and use that information to inform your marketing strategy.
A Case for Measurement
The case for measurement is not simply to calculate trade show ROI. Measurements allow you to see how various techniques or hypotheses are working, and answer vital questions such as:
- Have we identified the right buyer persona?
- Is our messaging attracting these buyer personas into the booth?
- Are they opting in based on our offer?
- Is our value proposition relevant?
- Does our offer actually get them to give us their contact information?
Answers to these questions will not only improve your trade show ROI, they will create greater efficiency and consistency in your sales pipeline, which translates to steady growth. In other words, marketing dollars well spent.
For more on how to use metrics to inform your trade show marketing plan, check out our recent webinar: Benchmarks, Goals, Metrics, and ROI: Everything You Need to Know About Measuring Trade Show Results.
MEET (meetroi.com) helps B2B growth companies effectively leverage at trade shows and in-person events. MEET’s processes help its clients ramp-up sales quickly and maintain a steady stream of high-quality prospects going forward. Contact Bill Kenney at MEET today for a free trade show participation assessment firstname.lastname@example.org or +1 (860) 573-4821.