I recently posed a question about calculating “return on investment” from exhibiting at trade shows. It turns out there is actually a formula for helping one calculate ROI on trade show booths,and you can find it on this site after you register.
Introspection on ROI for big-ticket business investments makes me wonder how often we ignore the concept of return on investment in our personal lives. For example, what is the “return on investment” on eating the jelly donut, buying a $25,000 car, going on a Christmas shopping spree on the credit card, and so on. And wouldn’t it be great if there was a ROI formula for eating broccoli compared with Twinkies? Or a formula that would put values on watching two hours of TV versus a stroll in the park with your spouse? That might give consumers a shockingly new sense of cost and benefits.
But back to booths and return on investment. Here is the poll question I posed to the Fresh Produce Industry Discussion Group LinkedIn:
Actual formula based investment/results
Paying attention to what others do
The poll results don’t mean much, but I found the responses very enlightening.
Unless you actually start buying from a new shipper or selling a new contact, what is there to calculate? If you acquired a new process/package/machine, you can put numbers on your investment. Its all “figurative” until something sales related can be calculated. Goals for exhibiting differ drastically based on your business--we exhibit at a Restaurant & Foodservice show in NYC each spring solely for PR--to promote buying local produce. But,many vendors are actually taking orders at this event. The PMA, in my opinion, if more of a PR/Feel good/meet your supplier in person type of event. Yes, many deals are negotiated there or over drinks/dinner, which also has to be factored into the calculation. Don’t these expenses fit into the calculation also?
Doing the calculation is the easy part--its all intangible, at least for my company, because we are making connections, meeting current connections, hoping to create goodwill and cultivate new suppliers. Until I actually buy/sell to/from these new connections and establish a relationship (long term?) other than calculating expenses what is my ROI? Its all PR Expenses, no?
To answer this, you have to start with your goals for exhibiting. Some people exhibit to increase sales, increase brand awareness or to cultivate relationships etc. Based on your goal, you can easily devise a method to determine your ROI. Every effort that goes into the tradeshow has to be included in the calculation; from the booth space to coffee for the sales team. I do ROI calculations for my company and I include every expense that was incurred because of the tradeshow. This is important because if your costs are wrong; your ROI will also be wrong.
You should set up a time line; set your goals and follow up with questions to you clientele during marketing or sales calls. In addition you may have a web survey or Social media survey to determine the penetration or awareness you may have garnered or generated. Much of the “ROI” on exhibiting may be intangible. It may also be tied to how much you invested in the exhibit itself and it’s actual location as well. You might find that subsequent exhibits “ROI” are tied to earlier exhibits in an accumulating effect.
I’m not one of these guys who has to come up for a number for everything. I’m from the school that ‘Just because it’s measurable, doesn’t mean it’s meaningful”. Having said that, we always look at the pluses and minuses of attending. Having time with B and C list customers is favorable. I’m going to see my A list guys at their place anyway. Tying up time with A list customers and suppliers has it’s good and bad. Bad...I am going to see them anyway, so it’s redundant. Good...if I’m with them my competitor isn’t (that drives the big evening events). I tend to disregard surveys taken at trade shows about ‘new business’. Until I can get back and vet a customer of supplier (reputation, credit check, food safety) it’s just a lead.....not even a qualified lead. One of the minuses is how much time we waste with people to whom we wouldn’t give the time of day if they showed up at our office.