I had a discussion with a small business owner today who wanted to know more about how we could help her company with their presence at an industry tradeshow, planned for early next year. In common with many organizations, she was deliberating whether the enormous costs and resources would be worth it.
My first question to her was why she wanted to exhibit at the tradeshow. She seemed rather taken aback at the question. Moreover rather than give me tangibles, her answers seemed to be based on emotion – fear, primarily – rather than any concrete strategic or commercial reasons.
Her replies were things like “the industry will think that we’ve disappeared if we’re not there”, or “the industry media will think we’re not a serious market player”.
Are you planning your tradeshow strategy because you feel that you have to be there, rather than because it makes commercial sense to your company?
Tradeshows Still Matter. But In A Different Way To Yesterday
As I’ve said before I think that tradeshows still have an important role in bringing vendors, customers, and partners together at the same time in a single location. However I don’t think many of the old reasons why businesses chose to exhibit at tradeshows hold much water today.
In the 80s and 90s, exhibiting at tradeshows was one of the most popular – and successful – ways to capture business. Then along came the internet and many of the reasons for a potential client to visit an exhibition disappeared. Regardless of whether you believe that industry tradeshows still play a valid part in your marketing planning or not, it’s clear that the number of companies choosing to exhibit at many industry tradeshows continues to decline.
Today, there are many other ways of marketing your business value – many of them with a higher ROI then exhibiting at a tradeshow. Prospects go to tradeshows for different reasons, yet the way that these events are organized is pretty much the same as it’s been for the last fifty years. Lower show attendances means you need a higher lead conversion rate to have the whole thing make financial sense. That may or may not be a realistic proposition for your particular business.
Tradeshows Can Work. But So Can Many Other Things
Don’t misunderstand me: depending on where your market lies, tradeshows may still be a powerful and effective way of both maintaining and attracting new business. But blindly signing up to exhibiting at a tradeshow every year because “we’ve always done it that way”, without logically evaluating whether it’s the best use of resources, seems to me to be more than a bit myopic.
I recently spoke to the marketing manager of a company that had exhibited at a big industry tradeshow earlier this year. They told me they had got about 60 “A Class” sales leads at the show, but less than 15% of those leads were from companies that they were not already in talks with. I don’t know exactly how much it cost them to be at that tradeshow, but after having organized my previous company’s tradeshow presence for the past seven years I can hazard a pretty good guess. Basic math leads me to estimate each one of those new leads has cost that company about $16,000.
Could they have got those new leads by spending less? Without a shadow of a doubt. Is spending sixteen grand to acquire one customer lead a good deal? Depends on the size of the (hopefully) resulting order. However remember this is $16K just for the lead, not to get the sale. The company concerned sells software to very large organizations, with a price tag to match. However large that order is, there are still upfront costs. There’s a demo to organize, perhaps a month-long evaluation period, and maybe some custom integration or services that can’t fully be charged for. All of this could make the true Customer Acquisition Cost a lot higher.
The best way of spending a marketing budget? I’ll leave you to decide.