The Real Cost of Your Exhibit and Trade Show
Trade show plays a fundamental role in the marketing strategies of many B2B companies. In fact, it represents one of the best way to be informed about the updates of your industry, obtain visibility and generate qualified leads.
However, what is the real value of exhibiting at a trade show? Does it have a higher cost per lead, compared to other promotional activities? Which are the basic guidelines to calculate your tradeshow marketing budget?
Even if many business owners get the impression that trade show marketing activities are too expensive, most of the time they underestimate the cost of taking part at these events.
Let’s analyse here all the costs – both basic and hidden – you have to consider to properly budgeting for a trade show marketing event.
There are some expenses related to trade shows that you can’t avoid. First of all, we are referring to the cost of the floor space: the price depends on the area you occupy, the value of the potential traffic which will pass your frontage and even whether you are indoor or out. Related to this, take into account the cost for the marketing materials that you will show during the exhibit.
Then, other inevitable costs are: transportation, accomodation and food for your employees, cost of creating and shipping the exhibits, show services, exhibit design, etc. Here you can find a good tools that will help you to accurately estimate the expenses for your next show.
If you thought that the expenses were over, you would make a huge mistake! There are so many unexamined costs that you must take into consideration. Just think at the preparation phase before the event, which imply high costs for advertising, travel scheduling, strategy, establishing goals, booth design etc.
Then, consider the normal salaries you pay to your employees, plus the overtime spent at the event (it’s quite common to work until 15 hours per day).
Last but not the least, probably the biggest intangible expense regards the “opportunity cost”, that is the cost you pay for having chosen to take part at a trade show, instead of other promotional activities. In particular, this expenditure should be included in the marketing budget, since is the cost of a missed opportunity coming from an alternative marketing activity.
But how can you measure the cost-effectiveness of exhibit, compared with alternative marketing activities?
COST PER LEAD
Since usually these events don’t generate immediate cash flow, you have to consider the leads you get from attending the fair. In fact, cost per lead is one of the most important ROI indicators and the leads coming from these events are ranked among the most qualified ever.
So, how can you capture potential customers’ contact details? Mainly, it depends on the technology support provided by the company or the exhibitions. It can vary from a basic box where contacts can put their business cards, or a more sophisticated technology that allows you to collect visitor details (barcode scanners for QR code).
According to the cost per lead, many business people tried to estimate this value, but there’s not a rule of thumb, since in can vary so much, depending on the overall costs we previously mentioned. For example, the CEIR estimated a minimum cost per lead of $96, whereas Mark Johnson (Vice President of Goldstein Group) stated that “show marketing usually has the highest cost per lead of any promotional activity, exceeding $250“.
In conclusion, bear in mind that trade shows are a long-term investment and your orders can arrive long time after the first contacts with the prospects, so, don’t be hurried to evaluate and measure the cost-effectiveness of this marketing campaign.