Wednesday, August 29, 2012

Measurement Tip 16

Win Lose or Draw, How Do You Know?

The first question usually asked when an event’s marketing team returns home after a show is, “How did we do?” Many times the answers are simply opinions of the most obvious indicators based upon observation and gut feel. For example, “Did we have a lot of visitors?” “Did we get a lot of interaction?” and “Did we collect a lot of leads?” These answers may make us feel good (or unsettled) about our performance, but they do not easily relate our accomplishments to business profitability and Return on Investment necessary to satisfy those who provided the funds.

An opportunity to give you a concise picture of trade show marketing success and how it is reported arose from our evaluation of four companies exhibiting at the International Woodworking Fair (IWF) last week in Atlanta. This is the largest industry event of its type for the woodworking market and the event is organized and sponsored by a group of large trade associations. The audience is well defined by the show management. The show management provided a detailed audience demographics document before the show for exhibitors to use as a valuable resource. Success begins with choosing an opportune show and IWF was a good choice.

The following performance summary presents the key elements of a perfectly sized, successful exhibit at an attractive show. We refer to these variables as Key Performance Measures. They detail efficiency and effectiveness of the trade show marketing effort.

As you will see, the quality of the show has everything to do with the level of success and payback on the event. You cannot (usually) directly affect these variables, but you can choose events and “right-size” your participation based upon these characteristics.

*Note: These variables are based upon averages and assume an average level of visitor attraction.

The variables above are opportunities/limitations of the show attendance. It is possible to forecast your expected traffic before the event begins and to use that forecast to adjust or “right size” you exhibit size, layout and number of staff. What is your cost per buyer, and how much time do you get to spend with them?

For these variables it is important to understand that all “buyers” (as defined by show management) are not necessarily qualified to buy your product. Not all buyers who enter your exhibit will be valid prospects and not all buyers who enter will become engaged with your staff or demonstrations. It is therefore necessary to estimate the number of buyers who become actively engaged with your staff or demos, using the logical assumption that most people who are actively engaged are likely to be qualified. These are the buyers that you are paying to attract.

Only a percentage of your engaged buyers will commit to the desired “next step”. This number is derived from tracking your leads as a percentage of engaged buyers, show by show. The numbers highlighted in green are what you are really paying for.

Very tightly defined leads are much fewer in number but much richer in sales potential and eventual sales results. Therefore, just answering a question about your event’s success with “We got a lot of leads” may not be a true measure of success.

While looking at the number of visitors it is useful to evaluate how well we sized our resources. We refer to this as “right-sizing.” In this case, based upon the number of engaged buyers present per hour and an exhibit that is 55% available for occupancy (otherwise filled with cabinets and equipment) and calculated at 9 sq.ft. per visitor as “full” to capacity, the exhibit size required calculates to approx. 350 sq. ft. The calculation is weighted upwards slightly to account for peak traffic. Note that booth traffic does not come in evenly for every show hour. This method is the correct way to estimate and fund exhibit size and staff resources when planning for an upcoming show.

Marketing is generally about creating sales opportunities and improving the probability of sale. Trade show marketing should be focused on doing just that, among other objectives. Sales are the domain of the sales force. A good measure of success for a marketing event is to identify the “sales opportunity” it created for the company. To do so relies on a few essential elements:

1)Leads must be tightly defined as only qualified people who are committed to take a “next step” defined by the sales team, at a certain level in the sales funnel.
2)The sales team must indicate what the probability of sale is for qualified prospects who take the designated “next step”.
3)The sales team must provide an estimate of sales value for the average deal.

This may require a number of calculations for each product set. This also eliminates the argument on how much credit should be given for a sale to the trade show activity. The show marketing activity produced an opportunity. The sales team most likely closed it.

Events provide numerous ways to reduce the cost of doing business. Consider the savings from travel avoidance, logistical costs of providing customers and prospects access to inaccessible, large or heavy products and systems, business processes such as recruiting, and re-use of creative, deliverables and properties to name but just a few.

Events accomplish huge amounts of exposure for your company and products. The main alternative is advertising. This exposure is not free and has definite value. Consider giving your program credit for at least the cost to create the same exposure through advertising. Advertising equivalency may not be a popular measure in some companies. Still there is value here. Report the impressions and consider, even if only as a subjective benefit, the value achieved.

After considering all of the estimated benefits from all sources, this event paid off well, providing almost $3.00 for each dollar invested. If we remove the estimate of resulting sales potential, the payback remains positive at $1.86/1. Finally, cost savings alone (the most tangible of all these measures) justifies $.83 of every dollar spent on the event.

I would say we could safely conclude this was a successful event! The approach was correct, the exhibit and staff sizes were correct, the necessary numbers of buyers were engaged, enough bonafide leads were collected and the results in sales opportunity, cost savings and promotion were all favorable. Most importantly, we can show our results to upper management in a context of business improvement and return on investment.

It’s a WIN!

This content is subject to copyright 2012 by Constellation Communication Corp.

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