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:
- 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.
- 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?
- 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.
- 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:
- 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.
- 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.