Category Archives: Sales

Is it Time for Manufacturers to Stop Doing Trade Shows?

Time to stop doing trade shows

Of all the marketing activities a manufacturing company undertakes, trade shows are the worst expenditure because of the typically low return on the high level of investment. There are a few things you can do to improve on your trade show investment which I’ll share at the end of this post.  However, I would advise most manufacturing companies to divest of trade shows and invest in other, higher ROI tactics where you can get better engagement and offer more value.  My answer to the title question is “yes” stop doing trade shows.

Trade shows are a very popular marketing tactic among manufacturing companies and their sales teams.  It is the very nature of a sales person that compels them to love the trade show.  They get to be the center of attention albeit one of many centers of attention.  Sales people love to say hello, shake hands and re-acquaint with their customers during a show.  Trade shows are mostly a social event with the booth visits, drinks, dinner, coffee and snacks all shared with their customers and prospective customers.  Some would say that trade shows are nothing more than a boondoggle for event exhibitors as well as the attendees.  I would not go that far because I’ve spent my share of hours standing on barely padded carpet over hard concrete floors with aching feet, an aching back and not much to show for my efforts.  Trade shows can be very tough on the body in spite of the boondoggle nature.  The more popular the destination, the higher chance of the show being a boondoggle for exhibitors and attendees.

The Sales team will fight you to the death to keep the trade show bandwagon going.  If you ask your sales folks why they want to do so many shows, you’ll likely get these answers:

  • “I can see a bunch of my customers at one location and one time.”
  • “In some cases, it is the only chance I have all year long to see my customers.”
  • “We’ve been going to show ABC for years, if we stop going now, everyone will think we’re going out of business.”

Each of these are legitimate but weak arguments that can be rebutted with a good marketing strategy.  Other reasons some companies go to trade shows is to actually sell product on the show floor.  This may be the one instance where a trade show might produce a decent return, however, it certainly should be analyzed.  What is the gross margin for products sold at a show?  You actually might be losing money if you include the costs of the show and the time invested by staff.

Bottom line, trade shows are most likely producing a negative return.  Back in the old days, let’s say before 2000, trade shows were a necessary and effective spend of marketing money.  Interactions with customers and your general target audience were limited before the days of email, Skype, easy screen sharing, webinar broadcasts and even virtual events.  Sales people did have to go to a show to see people.  Before the high speed internet, the annual trade show was the only place customers could see what’s new and what’s coming down the product pipeline.  Those days are long gone with the advent of the internet and your website.

Let’s look at some numbers.  Suppose you rent a 200 square foot booth space at your (or your sales team’s) favorite annual show for a fee of $10,000.  You fly in 4 of your sales people from around the country and also bring in a couple of product managers from Europe.  Add up the travel costs, food, shipping, booth setup and event extras and you’re looking at a $50,000 expenditure for the 3 day show.  Let’s say the venue is able to bing in 25,000 people to the show.  You get about 150 visitors to your booth over 3 days and collect about 100 new names.

  • Cost per thousand exposure  $2000 per thousand exposure.  A good trade magazine ad gets you about $30 per thousand exposure.
  • Cost per visitor  $333.33 –  This is only a visitor, not necessarily a prospective or existing customer.
  • Cost per new name  $500.00 – You can do a lot better than that with other types of marketing activities.

How about a true measure of return on investment.  Are you able to track a sale from a new name obtained at a trade show all the way to a purchase order?  If you’re sales and marketing infrastructure is not able to track attribution, it just adds one more reason to stop going to trade shows.

In many manufacturing organizations, trade shows are the single most important marketing event.  I’ve seen large firms spend a couple of million dollars each year on trade shows with no idea if they were working or not.  What would happen if you started showing the true ROI and started recommending that you trim the trade show budget in favor of something different?  I can pretty much guarantee your sales people will go ballistic.  You’ll likely hear the usual reasons it is absolutely necessary to keep spending money on shows.  See the list above.

If you’re a marketer and you are going to attempt to pare back the trade show spend which is, typically, a drastic and cultural change in your manufacturing organization, you need to be ready, willing and able to make a case for the poor return and be ready with your recommendation for other lead producing activities.  Here are a few activities that are measurable and gain high engagement to consider in place of trade shows:

  1. Try a webinar.  A webinar with a well chosen topic can easily garner hundreds of registrants and hundreds of attendees.  Not only is the cost per registrant about 10% that of a trade show booth visitor, but you capture their attention for any where between 30 and 60 minutes.  Which is more valuable, a 3 minute visit to a trade show booth or a 30 minute conversation that actually gives the person in your target audience something useful.
  2. Try a live seminar.  A live seminar can draw anywhere between 20 and 200 attendees, again depending on the subject matter.  Which would you rather have, 100 people stop by your booth for 3 to 5 minutes or 20 people to spend the day with you at a seminar?
  3. Try exhibiting at a virtual event.  These types of events have been proven to engage better and more people than live trade shows.  The virtual show is not tried and true, but they are worth investigating.
  4. Instead of spending $2 million on trade shows, spend half on shows and spend the other half on a digital marketing strategy, tools and personnel.

Your sales team won’t like #4, so be careful to prepare your base of support on that one.   It is also a good idea to start small as far as stopping the trade show train.  Coming up with a proposal to drop 50% of shows will likely get you more push-back than proposing dropping 5% or 10% per year.

Not convinced and you feel that trade shows are a must for your firm?  At least do these 2 things to help improve your ROI on trade shows:

  1. Let them know you’ll be there and why they should visit your booth.  I’ve seen the oft quoted statistic that 80% of trade show visitors decide which booths they will visit before ever setting foot on the show floor.  You need to let your target audience know ahead of the show that you will be there and give them a compelling reason to put you on their list of booths to visit.  What’s that you say, of course our customers will seek us out, they love us and how could they resist our charm and our magnetic smiles?  Think again my friend, you even need to give your customers a reason to visit. We offered a very simple promotion this year at Interphex; stop by to see some new products and pick up a free t-shirt for your trouble.  It worked like a charm.  We had more visitors than any previous year.  I couldn’t help but feel sorry for the booth across the aisle with not much activity and a booth size twice as big.  Undoubtedly, they did not tell their target audience or their customers about the show or give them a reason so visit.  But, they did seem charming and magnetic.
  2. Follow up quickly.  After 24 hours, every day that goes by causes an exponential decrease in your show ROI.   Make sure the sales people follow up on requests immediately and that everyone else who visited the booth gets some type of follow up correspondence or action within 24 hours.  You would be amazed at the number of companies who spend tens or hundreds of thousands of dollars on a show but never follow up with the visitors after the show.  It’s hard.  The poor salesman spends 3 days at the show, offline or partially offline and when he gets back, there’s just too much “real work” to do, so the leads go into the CRM or sit on his desk, never to be heard from again.  This scenario is the BIGGEST killer of trade show ROI above and beyond any other issue.  Let’s face it, in big shows, there are so many booths and so many people to see, your booth folks, your brand and your offering are way too easy to forget or mix up with the competition.  Follow up!

Good luck!  Here’s another good article along the same lines from Red Cedar Marketing & Events.

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Top 6 Techniques for Persuasion and Influence

Now that we’ve spent the last few weeks discussing the 6 principles for persuading and influencing, I’d like to summarize in one blog post.

  1. Reciprocity – This is the same idea as the Golden Rule.  Treat people like you would like to be treated.  More specifically, you get what (or if) you give.  It is a deeply ingrained human predisposition to repay in kind when we are given some thing or another.  One way the Modern Marketer can apply this principle is with a good content marketing program.  Give away information that is valued by your target audience and watch your business growth soar.
  2. Liking – People are more influenced by those people they like. And people generally like other people similar to themselves and/or people who like them.  Tactics to increase your likability are praising and pointing out similarities.  Always be authentic in your praise.  One way the Modern Marketer can use this principle is using imagery and language that resonates with the target audience.
  3. Social Proof – People are influenced by the ideas, actions and statements made by or endorsed by the group of people they consider as being part of their own group or type.  One example of applying this principle in practice is the tried and true customer testimonial.
  4. Authority –  People who are viewed as experts are able to persuade and influence because of their perceived expertise.  A Modern Marketer could apply this principle by branding an internal expert as an expert in a topic where the target market has interest.  And it’s always good to remember; expertise = credibility = premium pricing.
  5. Consistency – The idea behind the principle of consistency is that people will, more often than not, want to remain consistent with their stated or written opinions, values or commitments. If you want to influence your colleagues, subordinates, or your boss, getting them to state a position out loud is a powerful form of persuasion. Even more powerful is getting them to write it down and share it with other colleagues.  How could you utilize this principle in your 2013 Marketing plan?
  6. Scarcity – It is human nature to want what one cannot have or want more when we can only have less. There are many studies that prove this as true.  Remember I mentioned the struggle to obtain the elusive hot video game during the Christmas shopping season as an example.  Scarcity goes hand-in-hand with promoting your unique selling position or differentiated value proposition.  An exclusive and limited available offer is even more compelling than just a scarce offer.

Those are the 6 principles of persuasion and influence.  These are not new.  In fact, these principles have been documented and discussed as far back as the ancient days of the Greeks and Romans.  One major aspect of marketing is to influence the target audience to choose your particular product or service.  These principles should be kept in mind as you develop your 2013 marketing strategy and tactics.  What’s that you say?  You haven’t started your 2013 plans?  No worries, my next series of posts will be all about the Marketing Plan.

Last and most important point about the 6 Principles is to apply them with authenticity.  There’s nothing any of us hate more than to feel manipulated.  Be genuine.

Persuasion & Influence for Modern Marketers – #6 Scarcity

This is a principle that is regularly used in the world of advertising and/or marketing.  “Sale ends Friday”,  “Going out of business”,  “Columbus Day sales” are examples of applying the principle of scarcity to influence people to make a purchase.  When I was a young bag-toting salesman, I read a book by Tommy Hopkins and one of the chapters was about closing techniques.  One of the techniques he named as the “impending event” close.  “The price goes up on Monday” is how it was usually applied.  This is a highly manipulative closing technique and I don’t recommend any of Hopkins’ techniques, however, it is a good example of the principle of scarcity.  To avoid ranting against Hopkins and his outdated, manipulative, misguided selling advice, I’ll go back to the subject at hand.

It is human nature to want what one cannot have or want more when we can only have less.  There are many studies that prove this as true.  Another example from the retail world can be observed nearly every year during the Christmas shopping season.  It seems nearly every year, one or more companies is able to craftily position a new toy or video game as highly popular with limited quantities sure to run out before Christmas morning.  Oh the lines and the fights that ensue.  This is the principle of scarcity at its best (or maybe at its worst).

A savvy Modern Marketer could apply the principle of scarcity quite easily and effectively, but it must be applied authentically. It must be applied authentically.  Scarcity works very well if your product (or service) is able to offer a unique feature or benefit that your target market wants or needs.  Scarcity persuades even stronger if the information about the scarce supply is exclusive information.  Suppose your boss or co-worker tells you that they heard about an organizational change about to happen to your division not yet public information.  My how badly we want to know what that information might be about.  Compare this to a public notice sent out via email that talks about a new change being considered and follow this link to find out more information.  Not as compelling is it?

Another way to apply ‘scarcity’ in the world of marketing is to use language that talks about a potential loss as opposed to language talking about a gain.  People will usually react more if they fear they will lose something as compared to reacting because they may gain something.  For example, if I offer a product that will reduce energy costs in a compressed air plant, my message might be “if you buy my product, you’ll save 30% on energy costs” or the message could be “if you don’t have this product, you’re wasting $XX each and every month”.  Studies show that a larger proportion of the target audience will respond to the second message.

The problem with the principle of scarcity is that it is easily used to manipulate by offering false information.  As with all of these principles of persuasion and influence, scarcity must be used genuinely.

Persuasion & Influence for Modern Marketers – #5 Consistency

Consistency is one that may not be easily applied by the Modern Marketer in the course of regular marketing strategy and tactics.  The idea behind the principle of consistency is that people will, more often than not, want to remain consistent with their stated or written opinions, values or commitments.  If you want to influence your colleagues, subordinates, or your boss, getting them to state a position out loud is a powerful form of persuasion. Even more powerful is getting them to write it down and share it with other colleagues.  Naturally, the statement cannot be coerced in any way or you may see the opposite effect.

Let’s take an example where you are a member of a cross-functional team charged with evaluating vendors and software platforms for marketing automation.  You prefer a vendor that is able to provide a certain feature that you think would be very valuable and make your life a little easier.  You would have a much better chance of influencing the group to choose a platform offering that feature if you could get each person to verbally state that it is indeed important to have that feature.   For this principle to work best, the commitment or statement must be active (stated verbally or written down), public and voluntary.

The principle goes hand-in-hand with the idea of cognitive dissonance.  People will naturally try to align their actions with their beliefs.  Cognitive dissonance is when there is significant discomfort being felt by an individual whose actions are not aligned with their internal beliefs about themselves.  Writing down a commitment is an action and people will try to remain consistent with the statement to avoid the discomfort of non-alignment.

As I mentioned at the beginning of this post, I’m not sure how you, my fellow Modern Marketer, could apply this principle to your marketing mix.  But, I can think of one example where this principle is applied every day in many school rooms around the USA; the daily reciting of the Pledge of Allegiance.

If any of you, dear readers, think of a way to apply the principle of consistency to a marketing activity or strategy,  please feel free to share via the blog comments.

Persuasion & Influence for Modern Marketers – #4 Authority

In the last post, I talked about social proof and how humans look to their peers for cues about how to act.  The sister principle of persuasion to social proof is ‘authority’.  In other words, people who are viewed as experts are able to persuade and influence because of their perceived expertise.  Note that I said ‘perceived’ expertise.  We tend to judge expertise on things like documents hanging on the wall stating a certain level of education.  We also tend to judge expertise based on what people tell us about themselves.  Those of us who are a bit more skeptical may watch and observe a self-proclaimed expert to determine if the expertise is genuine.  In the end, expertise is a perception and nothing more.

Expertise may also be ingrained in the culture.  For example, my generation was raised to believe that a person with a degree in medicine (MD) is automatically an expert, no questions asked.  Certain professions or levels of education may imply expertise.  Suppose you walk in to a law office and one attorney has a degree from Suffolk County Law School on the wall and another has a degree from Harvard Law School.  You may naturally assume the lawyer with the Harvard degree is more of an expert; a perception that is ingrained in our culture.

How could the Modern Marketer use expertise to exert influence on her target audience?  Promote your internal experts.  Every company has a few experts tucked away.  Find your experts and get them to write a paper, teach a seminar, broadcast a podcast or teach a webinar.  By promoting your experts, you are better able to persuade your target audience to place credibility with your firm over a similar firm that is not perceived to have expertise.  Expertise = credibility = premium pricing.

Consider the 1970’s advertising example from Trident sugarless gum;  “4 out of 5 dentists surveyed recommend sugarless gum for their patients who chew gum“.  Well, dentists are experts right? Certainly if 80% say chew sugarless gum, then I’ll chew it too, by gum.  (sorry I couldn’t resist).

How many times have we seen so-called ‘experts’ appear on the news talk shows when there is some type of political crisis?  Expertise persuades and experts are better able to  influence.  As a marketer, it’s your job to make sure  your target audience perceives people in your firm as experts.

In the next blog, I’ll talk about the 5th principle,  ‘Consistency’.

Persuasion & Influence for Modern Marketers – #3 Social Proof

The Social Media Spectrum

We are social creatures.  All we need for proof is to look at the incredible growth of social media titans Facebook, Twitter, Pinterest and the like.  One aspect of being a social creature involves continuous monitoring and evaluation of what our fellow human creatures are doing.  Looking at what peers or colleagues do or say is especially important and can be quite persuasive.  There have been many psychological experiments published in respected journals which demonstrate the validity of ‘Social Proof’ as a strong principle of influence.  We look for and, in fact, rely on our peers for cues on what we should think, what we should do and how we should act.

How could this be applied by the Modern Marketer?  One very common marketing tactic that most of us use already is the customer testimonial in order to influence those ideal prospects to become customers too.  Another common tactic that uses social proof is making a statement that people in a group where the ideal prospect resides have already decided to use whatever it is you are marketing.

Need more examples, just look at the power of Yelp in how it influences you to try or not try a new restaurant.  Another powerful example is the persuasive power of consumer reviews on sites like Amazon or Newegg.

I was driving through Boston this past week and noticed a huge sign on one of the parking garages that said “Celtics fans park here”.  A good example of using social proof to influence basketball game attendees where to park.  Event parking in Boston is big business with large sums of money at stake.

One final note,  the principle of social proof works best when the influence comes for peers or those that the target group can relate to.  There is another principle of influence called ‘Authority’ which is the sister to social proof and which we will discuss in the next blog post.

Persuasion & Influence for Modern Marketers – #2 Liking

Yes, it’s true, you have more persuasive clout if the person or group you are addressing actually likes you.  This is one reason Bill Clinton is so influential and was able to become President.  This is one of the reasons large firms like to hire charismatic CEOs; they are naturally likable and therefore are more influential to employees, shareholders, and customers.
People tend to like good looking celebrities or just good looking people.  This is one reason why models and sports celebrities are successful at promoting a brand. Think Nike and Michael Jordan or the famous Cover Girl models for examples of the principle of liking in action with advertising.
So, you’re probably not a Covergirl or you may not be very charismatic (most of us are not), so what can you do about the ‘likeability’ factor.  You too can use the principle of ‘liking’ to influence your family, friends or work colleagues.   Two things that help people like you are genuine praise and similarity.  If you’ve ever hosted a sales person in your work environment or in your home, more often than not, the sales person starts out with some small talk chattering on about how they once lived in a neighborhood down the street, or how they also have a family of the same size and so on.  Natural sales people know that they have more influence if their prospective customer likes the same sports team for example.  If you take the time and make the effort to learn of authentic similarities between yourself and your colleagues, you are likely to be more persuasive in your work place for example.
Praise is harder to use to increase likability because people could suspect manipulation if trust has not already been established.  As with each of the 6 principles I’ll discuss, likability must be genuine for it to help persuade and influence.

Next up,  #3 Social Proof.

Persuasion & Influence for Modern Marketers – #1 Reciprocity

As Modern Marketers, one of the most fundamental things we do is to influence or persuade.  It’s rather fascinating when you read about the science of influence or the practice of persuasion.  There seems to be a fine line between influencing or persuading someone or some group and manipulation.  Perhaps there is no line at all.  Most of us think that persuasion is a result of charisma.  Tall men with a full head of hair seem to have stronger influence than shorter, bald men (full disclosure, I am on the shorter, balder side of the spectrum).  But, never fear you short, bald men and women you can learn to be highly influential and quite persuasive.  Yes, it’s true that some people take to persuasion easier and more naturally than others.  Beware, if you use these principles of persuasion to manipulate, you may earn some short term gains, but in the long run, those you have influenced will feel tricked and you will loose your support.  Use these principles authentically and sincerely, and you will be respected and admired by your business colleagues and friends.

I’ll be writing a series of 6 blog posts covering the 6 basic tenets of influence.

Reciprocity.  The act of giving and receiving.  It is a deeply ingrained human predisposition to repay in kind when we are given something.  The simple act of giving praise (authentically) is one thing that can be given and it feels good when it is repaid.  You could give a gift or even just give a smile to a co-worker of passerby on the street.  Gift giving is not the best way to influence with reciprocity, simply because the act may be suspect, but usually it still works to influence.  Bottom line is, give to receive.

Next post, I’ll talk about the principle of ‘Liking‘.

The Absence of Good Lead Management in the B2B World

One would think that lead management in the B2B business world was ubiquitous.  As a Modern Marketer, I think that everyone certainly must be using a marketing automation system, a CRM system, automatic lead hand-off, lead nurturing, lead scoring, and monitoring the conversion points of a traditional funnel; suspect – MQL – SAL – SQL – Closed or Won – nurture – cultivate.  I’m thinking, how could anyone miss this with all the buzz over the past 5 years. 

But, it is not so.  According to the latest Marketing Sherpa B2B Benchmark Report, only 24% of all B2B marketers are using a marketing automation system.  Of those 24% only 30% are using the high ROI lead management tactics of lead scoring, lead nurturing or basic lead funnel management.  Even more astounding is that the Marketing Sherpa survey shows that companies using lead scoring see a 77% improvement in lead generation ROI and a 79% improvement for those using lead nurturing.  So the obvious question is, “why aren’t more B2B firms capitalizing on this powerful technology?”

I am an avid superuser of the Eloqua platform and have been using these high ROI lead management tactics for 3 years now with demonstrated strong revenue growth results due in large part to these and other automation strategy and tactics.  I’ve spent hundreds of hours learning the platform and it has not been easy to learn how to fully leverage this marketing automation platform.  Most marketing departments are under-resourced, over-worked and under-appreciated with little time to spend learning how to use a new technology.  Unfortunately, having the time to learn how to use a marketing automation technology is a luxury in most B2B organizations.  I suspect this is the reason for the low adoption rate of such a powerful tool.

On the flip side, for those organizations with Modern Marketers who are willing and able to learn this technology, you can take a huge advantage over your competitors who are not able or willing to use the technology.

For you CEOs and CFOs out there who view your marketing department as an expense, it’s time to break out of this 20th century paradigm.  A properly established marketing department is your revenue engine!  At the risk of sounding pompous, using the lead management tools of a marketing automation system, I could take any B2B firm in the 76% who are not using automation or any of the 70% not fully leveraging automation and add an additional 10% to their top line within 12 months (assuming support from the C-suite).  I’ve done it and I know it works.  If you’re one of the laggards not using or not fully leveraging lead management tools, time to get busy!  Take the reins and make it happen.  There’s plenty of research available to help you to make the business case to your executive management team.

My recommendation is to invest in your marketing team, build a revenue engine, give them the time and money to gain the education and purchase the tools of marketing automation.  Don’t be one of the laggards not using this powerful tool.  I’m quite passionate about fully leveraging marketing automation and making marketing the revenue engine.  Send me an email if  you would like to discuss further.

The Silk Market – Pure Marketing Genius

I just returned from a business trip to China.  By the way, no access to Google apps including Blogger, thus my absence from new posts over the last 2 weeks.  Anyways, my last stop before leaving was at the infamous Silk Market.  In days gone by, the merchants did purchase their silk here, but today you can buy just about anything your heart desires; shirts, shoes, souvenirs watches, leather, and most, shall we say, faux brand products imitating the likes of Prada, Rolex, Gucci, Polo, et al.

Why do I mention this place here on the Modern Marketing blog?  The Silk Market is a superior model for pure marketing genius.  All Modern Marketers could take a lesson or two from this business.

For a brief analysis, let’s take a look at their fundamentals:

  • Positioning Statement – a destination for tourists and locals where everyone can find the lowest prices on all types of fun products and have a fun time buying.
  • Value proposition – find the product you want at the lowest possible price and have a fun and unique, once-in-a-lifetime shopping experience
  • Product – product is the experience, not the actual products being sold although there is the allure of the faux branded products
  • Price – lowest price in the city depending on how good you can negotiate
  • Place – direct retail shopping at the market
  • Promotion – global word of mouth is enough for this outfit.  If  you go to Beijing, you’ll hear about it and want to visit.  If you visit, you will buy something.  Oh, and it’s all cash transactions, but don’t worry if you run out of cash, there are ATMs on every one of the 5 floors.

The position is defensible and difficult to imitate.  Barrier to entry is high.  They know the customer cold and will pull out all the stops in the price negotiation.   The shopkeepers are masters at influencing your purchase decision.

What a great case study for the next MBA marketing class!