Was exhibiting at that tradeshow worth your time and resources? How would you know?
In today’s world where so much business is conducted on the phone or digitally, meeting customers, prospects and other stakeholder face-to-face is extremely important. At the same time, you want to effectively keep your costs down and use your time and resources wisely. In order to do that, you need to measure and improve your current strategies. Without data, your decisions about exhibiting or attending are based on nothing more than hunches.
It is fairly easy to determine the ROI for your Tradeshow booth.
Collect This Data
1. Ask your sales and accounting department for the average gross margin on a sale.
Gross margin = Revenue minus costs of goods sold.
2. Calculate the total cost to attend the event.
- Booth cost
- Shipping and freight
- Electricity cost
- Lead retrieval
- Pre-show marketing
- Booth marketing materials
- Additional booth staff registration (those not included with booth cost)
- Booth staff lodging
- Booth staff travel
- Booth staff expenses
- Post-show marketing
- Booth staff labor
3. Through in-booth qualification or by conducting a post-show survey segregate inquiries from qualified leads. Post show survey questions might include:
- If they intend to purchase from you
- When they intend to purchase from you
- How much they intend to spend
- Note: remember that you are measuring intentions, not actual purchases
4. Multiply the number of qualified leads by your company’s average conversion percentage or win rate.
5. Multiply the result from step 4 by your company’s average sale.
6. Multipy the result from step 5 by your company’s average gross margin.
Now use the data you collected in steps 1-6 to calculate your ROI.
If your close rate from qualified opportunities is 25% and you had 100 people visit your booth then 25 people plan to purchase something from your organization. If the average amount of spend from the respondents is $10,000 on your products and services within the next six months, you can project approximately $250,000 in sales from the tradeshow.
To calculate the actual ROI:
- Multiply the total amount of sales from the show by the average gross margin on a sale.
In the illustration used above, multiply $250,000 by the gross margin on a sale. So if your gross margin is 70%, you can assume the actual incremental revenue is $175,000.
- Subtract the total cost to attend the event from the actual revenue.
Now you have your net ROI for the event. For a more sophisticated ROI process, check out Exhibit Survey’s free ROI Toolkit.
Beyond The ROI Of Sales
Of course the above scenario is for the ROI of your booth when selling a product or service at an event. Sometimes, you may want to look beyond the quantitative data. Your tradeshow goal may be:
- Exposure or awareness
- Launch a new product or service
- Increase brand engagement and drive affinity between customers and the brand
- Reach new markets and customers
- Nurture your relationship with existing customers
In the above cases, you’ll want to evaluate the quality of your communications and ask different questions to evaluate your effectiveness.
Whether you decide to participate or not participate in future tradeshows will be dependent upon the data you collect to support your decisions. Without this data, you are merely trying to read a crystal ball without a clearly defined set of objectives and criteria for measurement.
Why do so many tradeshow exhibitors base their ROI on the number of people who entered their booth? What attracts people to a tradeshow booth?