Outbound Marketing: Are Trade Shows Eating Your Budget?

The old adage is true:  Time is Money.  The more efficient your process is for developing customers, the higher the ROI on your marketing budget will be.

This month, we’re going to take a look at some of the traditional sources of leads and how much they cost.

We’ll start with the beast in all marketing budgets: the trade show. Of course, depending on the size of your company and the money you have to spend, the size of your booth will vary.

For this, we’ll consider a 30 x 40 space at Process Expo 2013. That puts our price per square foot at about $32, including drayage. We’ll also assume that you have an existing booth, so our estimate excludes a new custom booth build or rental. However, according to the Exhibit Designers and Producers Association’s 2011 Economic Survey, current custom exhibit costs range from $144 to $160 per square foot.

Projected Cost

Knowing that the B2B sales cycle can be quite lengthy, it will take a few weeks or months before you know for sure what your gross profit was from the Process Expo. For our purposes, let’s say you had a gross profit of $200,000 with 98 leads generated. Remember that gross profit only includes sales that happened as a direct result of your company’s attendance at the Expo.

  • ROI    (200,000 – 134,787) / 134,787= 48.3%
  • Cost per Lead 137,787/ 98= $1,375.38

Wow! An ROI of 48.3% is amazing! But wait. Is that your true ROI? And a cost per lead of almost $1,400! Let’s back this truck up.

The one crucial piece of the puzzle missing here is this: how many of these leads were qualified, sales-ready leads? And how many were garbage? According to multiple industry resources, anywhere from 5% to 30% of your leads from a given trade show are qualified. Meaning that’s the percentage of leads that have full contact information and application needs, etc.

So for argument’s sake, we’ll say that 30% of your leads from the above show were qualified. That translates to about 29 leads that can be handed off to your sales people right out of the gate. If your sales people have time to jump right on these leads, that is.

The stats below are from the Center for Exhibition Industry Research (CEIR), particularly, their Exhibitor Sales Lead Capture and Follow-up Practice Trends research report released in October 2012.

  • The top two most common methods organizations use to capture leads are: lead retrieval system offered by an exhibition organizer, 74 percent, and paper-based lead form/collect business cards, 59 percent.
  • Qualifying leads is infrequent, with only 30 percent of exhibitors capturing demographics and other lead qualifier questions, in addition to contact information and product or service interest information.
  • Customized emails, 64 percent, and phone follow-up tailored to address attendee product or service interests, 59 percent, are the most common follow-up methods. Fulfillment of these efforts is completed within two weeks by over 70 percent of exhibitors using each method.

The point is this: pre- and post- show connections are a vital part of trade show lead generation success. This includes comprehensive marketing tactics to bring traffic to your booth in the first place. Even if you come out with 29 “qualified leads”, those prospects still need further qualification before they’re ready to be handed off to your sales people. To say nothing of the other 67 leads, which deserve to be vetted as well. When all is said and done, your ROI is going to be driven down and your cost per lead driven up.

The bottom line:

B2B companies are allocating 12 percent of their budgets to trade shows but only getting 9 percent of their leads from that them. (Source: HubSpot)  Is it worth it?

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