The November/December 2008 issue of E2 had this thoughtful interview with a show manager. At the very least, exhibitors should be able to ask show organizers for this type of help, including hard data.
COST JUSTIFYING TRADE SHOW PARTICIPATION
By Neil Lewbel
Cost justifying exhibitor participation is a simultaneously difficult and important function of a trade show sales organization. Cost justification should not be confused with cost of exhibiting or return on investment (ROI). The cost of exhibiting and ROI are specific numbers while cost justification can be described as the reason or argument for participation in a trade show.
We recently spoke to Paul Auchincloss, head of Sales for the Association for Financial Professionals (AFP) who explained how they cost justify participation in their annual conference.
E2: How do you determine the cost of exhibiting?
PA: We begin by recognizing the loyalty and buying power of our audience. The overall value of exhibiting, to a solution provider, is enhanced by the fact that our annual conference is the only time that we provide our member contact information; for those members who attend the conference of course. We constantly watch the ratio of practitioner attendees to exhibiting companies and keep a close eye on industry and competitive benchmarks to keep us grounded in our pricing. Note also that each 10 X 10 exhibit space comes with two full conference registrations.
E2: How do you cost justify exhibiting at your conference? How do you present that?
PA: That is answered differently for existing exhibitors and new exhibitors. Our veteran exhibitors recognize that there is a cost of not being there in contrast to their fixed costs associated with having a presence. When a notable exhibitor takes a year off or changes direction with sponsorships, attendees often take note and inquire about it with our own staff. So it can become a very real cost of opportunity lost for that exhibitor/sponsor. For the new exhibitors, it is all about demographics. We show them as much data as we can. This includes company size and people’s titles represented in our association’s membership. We give them information from the previous year’s conference to show what members attended and walked our floor. If they enter into the exhibiting relationship, they get pre-conference and post-conference mailing lists so they can directly work with those prospects. The ultimate question is: Is it worth it for them to be in front of this loyal buying audience?
E2: Do you use any comparisons or benchmarks?
PA: To determine return on investment, we help clients crunch the numbers to compare what happens on the street versus a convention setting. How expensive is it to cultivate a contact into a lead and turn it into a sale outside of a convention setting?
After the show, we help exhibitors analyze their effectiveness to begin the justification and planning process for the next year. We will go back to the decision makers and work with them to analyze the data. We have four salespeople working with our 300-plus clients in this realm and they do it at a very detailed level.
E2: You mentioned that for new exhibitors you will compare the cost of exhibiting to a conventional sales process. Do you use any standard numbers such as the cost of putting a salesperson in the field for a day?
PA: We find it is best to have the customer determine their own numbers. If they have not done it before we sit down with them and ask, “What does it cost you to gain leads in your normal ‘non-conference’ existence on a day-to-day basis?” It makes them think through how much they spend in direct mail, telemarketing, cold calling campaigns and all their different prospecting activities. As they start thinking about this, they realize our show provides a loyal audience in a captive environment for three days. That audience makes and influences buying decisions.
E2: How Do You Cost Justify Sponsorships?
PA: While great attention is given to cost justification for exhibitors, less attention is spent on sponsorships. Cost justification of sponsorships is based on the sponsoring company’s goals. Is the sponsor attempting to gain branding exposure? Are they looking for a networking opportunity within the sponsorship? Is this an opportunity for them to be seen as a thought leader in a particular area? We view all of that in terms of how they are going to be positioned in front of our audience. We breakdown the details in terms of: audience size, amount of clutter, signage appearance, and other factors. Sponsorships range from the welcome reception down to the lanyards for badges. They all have different valuation models. We work with the clients to match various sponsorships with their marketing objectives.