Measurement Tip 26

Measuring The Exposure Generated at Trade Shows and Events

 

Ask a marketer why his company attends trade shows and events and his first answer will likely be “Exposure,” “Branding,” or “To maintain a presence in the industry.” Generating leads or influencing sales are usually cited after exposure related goals. However, few companies have a method to measure this exposure. Instead, most companies base their success or failure on the number of visitors to the exhibit and the number of leads generated. Both are important indicators, but more is required to provide a good indication of the value of exposure.

For these reasons, it is important for companies to develop a methodology for measuring both the quantity and quality of exposure at trade shows and events. Exposure provides a surprising level of value and is an important element in justifying participation and expense. Measuring exposure can also provide a better understanding of how events factor in the overall marketing mix. With it, marketers can compare the value provided by the event program to that of advertising, promotions and other marketing media. Exposure evaluation also provides insight into how events generate leverage for other media.

 

Measuring Quantity of Exposure

The amount of exposure is the obvious place to start. One technique for measuring exposure is to estimate the number of audience impressions achieved by various tactics and activities associated with participation in a specific trade show or event. A forecast estimate of potential impressions can be used for decision-making regarding the size and types of presence and promotion activity at an event.

The following methodology is a simplified overview of how to measure the quantity of impressions generated at an event. We will assume that the marketer researched the event and ascertained that the target audience will be present in sufficient numbers that justify participation. 

First, obtain an accurate count or develop an estimate of 1) total show attendees and 2) the subset who fit your target marketing profiles. These numbers are essential in calculating gross and targeted impressions. Gross impressions are a count of the number of times your messages, or product or company brands are seen or heard by anyone at the show. Targeted impressions, i.e. visual and audible connections with those attendees who fit your target audience profiles, will be a subset of your gross impressions, among those who fit your target audience profiles. Gross impressions have value. For example, highly respected and well-known brands tend to perform better in financial markets. Targeted impressions have an impact upon sales ready prospect development and probability of sale.

Next, approximate the number of times individuals are exposed to your individual event marketing program elements. For example, the number of times the typical attendee will pass your exhibit over the course of the show will be based on factors such as your location in the hall, the number of exhibition hours and days and the number of other exhibitors competing for their attention. For instance, if your exhibit is in the front of the hall and the show is three days in length, you might conclude that the average participant passes your exhibit coming and going from the hall on two of the three days. That would provide an four opportunities to see for the entire group of exhibition participants. If the exhibit is in the rear of the hall, the average attendee may pass only once during the show providing only opportunity to see. (Obviously not every person will see your exhibit, however many people will see it multiple times. For simplicity, we assume they somewhat cancel out unless there is more sophisticated tracking in place.)

You can analyze all other aspects of show participation in the same way. Pre-show communications, such as a direct marketing program provide the opportunity to make several impressions on each attendee with a heavy concentration on targets. A banner in the front lobby may be seen multiple times daily by most participants. A sponsorship may place your logo on signage, print and web media giving you even more impressions per attendee. An ad in the show program might give you one additional impression per attendee, while an ad on the back cover of that same program might give you three or more.

After you have identified the number of gross impressions each element of your marketing program is likely to produce, you can estimate the number that were actually targeted impressions using percentages derived from studying the show demographics and your own exhibit visitor demographics if you track them. You would use a much higher target factor for a targeted mailing than you would use for exposure to your exhibit.

If advertising is part of your show plan you may include impressions from that as well. With the estimates of total gross and targeted impressions you are armed with an important answer to the question “What do we get out of this show.” 

Estimating the Cost and Value of Impressions

If you desire you can report a qualitative but useful value of the equivalent cost to generate impressions created through an event by other means such as advertising or direct marketing. Other marketing campaigns may be measured by numbers of impressions, resultant qualified sales leads, contacts and closed business, etc. That would be a useful structure to apply to your event marketing element. This estimated value can help justify your show investment. A case in point is a division of 3M that used a particular show to introduce a new product to the market at a very well targeted show. Unaided awareness of the product name and description was measured after the event and extrapolated to a percentage of the entire U.S. market. The advertising and corporate communications VP estimated advertising expense required to create an equivalent level of unaided awareness among targeted buyers was more than twice the entire show budget! And speed to market was cut by over approx. 50% due to the "sales call equivalents" held at the show that would not have occurred with advertising. 

These same concepts can be used to estimate the value of sponsorships and promotion opportunities offered by a show or event. Estimate the number, types and value of the impressions a sponsorship will generate. Add in some qualitative evaluation such as the good will that will be extended to the host association for example. This assessment of potential value will help you evaluate which opportunities will likely to give you the largest return on investment or perhaps lead you to negotiate the cost using your estimated value. 

Measuring Quality of Impressions

The next step is to measure the quality of the impressions you’ve made. This gauges your efforts’ success not just at getting in front of your audience, but in creating the impression or image you want. It is a valuable tool that enables you to identify your success and pinpoint specific weaknesses that can be improved upon at future events.

The best way to get a definitive reading on the quality of the impressions made at a trade show or event is through a formal survey. Many marketers skip this step and base their evaluation on the feedback they receive from the customers and prospects they meet with at the event, but this method comes up short because it ignores those who didn’t interact with your staff, thereby failing in the opportunity to learn how to attract them next time. 

Start with a blind, pre-event benchmark study to ascertain the current level of awareness and the perceptions of your company or product represented in the event audience. Repeat this after the event to see what you’ve accomplished. Your accomplishment will be the movement of each variable in a positive or negative direction. Include questions that document the retention of specific messages, quantify the recall of your presence in comparison with your competitors, and give you the opportunity to learn how to connect more effectively with your audience in the future. You can even re-qualify the potential of the event by finding out what percentages of the participants have interest in your products and services. There are a number of specific measurements such as purchase intent, brand preference and net promoter™ scores that can be applied to assess the quality of your communication. 

Measuring the quality and quantity of exposure at trade shows and events gives marketers data on their return on investment that goes beyond the more obvious measures of leads and sales. It gives a true picture of the value received and goals accomplished in proportion to the dollars spent, in terms that are readily compared to the results from other marketing activities. And, because relatively few other companies are doing this, you can get a jump on the competition.

Heather DeLoach

Project Manager, Constellation Communication  

For assistance with your trade show and event marketing program, please contact Constellation Communication +1.770.391.0015

*Net Promoter Score is a registered trademark of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

 

Measurement Tip 21

How does anyone determine the success and ROI of a party, networking event or even a golf outing held during a conference or event?

Hospitality and other ancillary events abound at trade shows and conferences.  Most of the ones I have attended were not planned to deliver much in the way of ROI.  However, it is quite practical for receptions, mixers, networking events and even golf outings to produce important and valuable accomplishments for your company and to expand the value derived from participation in the main marketing event or trade show.  Here is how…

My model for event value considers four overall benefit categories for any face-to-face activity.  These four questions will lead you to plan for and establish measures for your accomplishments.  Not every event will provide accomplishments against all four values.  The examples given are in terms of ancillary private events:

1) How will an ancillary event increase sales opportunities for the host? Meeting new prospects and accomplishing the initial steps in establishing relationships benefits sales results.  Sales may be able to provide an estimated value for a new prospect.

2) How will the activity protect and retain existing customers and revenue? A private affair for current customers is a good example. Using an event to protect your existing customer base and then to up-sell a customer provides value you can prove for the company. Current customers may be introduced to new programs or incentives at an ancillary event.  Explore customer retention rates, the average revenue value of a customer and estimated cost to replace a lost customer for your value estimates.

3) How will the event save the host money? Bringing high-value contacts, prospects, partners and suppliers together at the same time to see something or someone (such as an executive or expert) in one place may avoid several future trips and perhaps, events at your company’s additional expense. A great example is a mixer for the press and media when your company is launching a new product.

4) How much exposure will the event generate for the host company's products and brands?  Exposure is counted in the form of impressions. This is the same metric used in advertising and PR efforts. Use signature ancillary events and their associated promotion and publicity to position your company, products and priority messages. Another worthy objective is to establish your company as a thought leader by providing provocative and valuable content during the event. If possible, seek out assistance from your communications team members to help you estimate what the exposure generated at an event may be worth.

Develop your event plan to deliver accomplishments in each of the four elements of value.  Then you can apply metrics to document achievements.  

The basis for all measures is personal interactions.  Counting interactions with people who fit targeting criteria is the basic measure for elements 1 - 3.  Estimate a value for each person "activated" via their interaction with your team at the event for each of your defined goals. The activation may be to become a committed lead, to resign as a customer, to attend a function in lieu of a future one, or to receive your images and messages.

For value #4, Promotion, count impressions made on people. Impressions are visible or audible images of your company's brands and messages that fall on the eyes and ears of many different target audiences addressable through the events. Use your advertising cost per impression as a guideline to estimate value.

If you collect and report any results in the form of accomplishments in any or all of the elements of value listed above, your management will be more confident with their investment and with you as a competent manager of the business.

Measuring Payback and CRM Value for Marketing Events

A great tool for conveying the value of your marketing events is the payback ratio. This is the ratio of the total value of estimated revenue, revenue retention, cost savings and promotion value gained through event activity, divided by the event cost. It is expressed as $XX/1, for example $42/1. The payback ratio serves not only as an indicator of event efficiency, but also as a useful way to compare past, current and future events. The payback ratio is based upon estimates of the four main categories of value derived from marketing events:

1.Revenue (or gross profit margin) from New sales –This element of event value is the most difficult to document as so many people and steps may be required to close a sale and sales cycles can be quite long. It is possible to estimate revenue impact using acceptable internal assumptions such as the “close ratio” associated with well-qualified leads from an event and the “average value of sale” for sales that result from those leads. The best approach is to discuss these assumptions with your sales team and get their agreement. It is also best to have the sales team define the “next step” expected of people who become leads through their interactions at an event. Use “closed loop” systems such as sales automation, warranties, registrations and other types of tracking aids where available.

2.Retention and Growth of Current Revenue Base- Customer Relationship Management (referred to as CRM) is a very important function in companies today. Existing customers and the revenue they provide are the most profitable for most companies. I have heard criticism about companies that devote their event marketing resources to interaction with existing customers, yet I would suggest this is one of the most valuable aspects of event marketing. Keeping customers up to date, reassuring them that their needs will be met, and thanking them for their business has a direct and measurable impact on retention and profitability.

One of our large consumer package goods clients assesses the revenue addressable at an event, broken down like this:

A.How much total market share (expressed in terms of revenue, number of customers and potential customers, average number of products per customer or target, etc.) is addressable at this particular event? (Addressable Revenue)

B.How much of that total is comprised of our current customers, representing existing revenue? (Retention target)

What is the growth opportunity on the existing revenue base at this event (Growth target)? For example, the percentage of current customers that are likely to be cross-sold into an additional product line(s) may help establish a growth revenue target for an upcoming event. The average annual value and lifetime value of a customer are important measures in defining the scope of the opportunity.

C.How much does that leave as additional market share addressable at the event? (Conquest target)

Defining the addressable revenue targets in this manner helps to understand and report the potential value of an event as well as add focus to the tactics and activities planned for the event.

If a company places a heavy weight on CRM as a trade show marketing goal, then it is important to know how well their CRM initiatives are working. CRM is essentially a process for providing optimum value to customers to support obtaining maximum revenue value for the company. Therefore, it is wise to use measures of success that relate directly to customers. Trade show CRM assessment should be consistent with any other enterprise-wide measures and metrics applied to other CRM initiatives. Briefing senior management CRM success measures and applying these metrics on an ongoing basis will help to ensure continued funding of your CRM activities.

As mentioned, customer feedback should be incorporated into assessments of trade show performance. Customer measures may include increases in average order size, the number of contacts required to close a sale, number of calls and time devoted to customer service or support, changes in customer satisfaction results, and marketing measures such as net promoter scores. Many of these measures provide some basis for estimating potential return on investment, such as a cost savings through reduction of reliance on customer service or technical support.

Trade show activities can be tied to improvements in customer acquisition, retention, and perhaps reactivation. Many companies know their retention rates and changes in the retention rates can be significant measures of success. They also must then agree how improvements in these areas will potentially impact profitability. Measurements may exist regarding the percentage of reactivations among lost customers for the year. Tracking these types of measures over time can assist in identifying trends of improvement related to events.

Estimating the potential value of CRM efforts is similar to estimating sales opportunity in a sales funnel. What is the effect upon the retention rate among customers seen at events where a CRM initiative was in effect? And by extension, what is that change worth in profitability? The same could be applied to “reactivated accounts.”

Investing in retention of existing customers and their revenue base at events can make really good sense. Take for example a business with any level of attrition each year. Let’s say an initiative is developed for events that will result in reaching and retaining 10 customers among the 50 or so that are lost each year. The average value of a customer addressable at these events is estimated at $750,000. It is a simple process to determine if event initiatives are a worthwhile investment:

Multiply the number of customers retained or reactivated (10) by the average annual revenue value of a customer addressable at events ($750,000): (10 Customers X $750,000) = $7,500,000 in reclaimed revenue. Multiply that times the profit margin on sales associated with existing customers (it will be higher than for new customers, say 35%) and you will find $2,625,000 in profitability attributable to those customers who would otherwise be gone. That level of contribution is likely to provide a fairly high percentage of justification for the entire event program budget in addition to the other monetary values of new revenue development, cost avoidance and promotion value accomplished at those same events.

If an event is a key element in managing the relationship with an account for the year, such as your premier customer conference or the largest annual conference you attend together, then the value of that activity would likely be a significant portion of the overall amount a company spends on maintaining the business. If the event you are considering is not a main part of relationship management then it might represent only a small fraction of your company’s effort. Regardless, if you add up the current annual revenue of the customers you will entertain or brief at an event, those numbers are usually impressive, and demonstrate what is at risk if those relationships are not maintained.

3.Cost Savings – Cost savings and expense avoidance achieved through trade show activity can be quite substantial. Events present “one on many” and “many on many” opportunities. This value element is a real, traceable source of ROI on an event.

Everyone in your market universe may be gathered in one place, thinking about the same concentrated range of topics. Prospects, customers, suppliers, allies, analysts, press, executives, sales, product management and marketing are all at a single event, usually at their own expense. The number of potential interactions is huge. Consider special approaches to maximize the time, place and focus available through the event.

Be sure your activities at your next event are aimed not only at the income side of the profit equation, but the cost side as well. Realizing these benefits requires dialogue with those managers who can take advantage of the opportunity your event provides. They may also help you estimate the value of doing multiple things at an event instead of doing them one at a time in the future at additional expense.

Reporting these results in your event measurement report will add credibility and financial justification for your investment beyond the primary goal of increasing sales.

4.Promotion Value – This is often the least reported source of ROI, but promotion value at a marketing event provides real, identifiable value. Promotion value may be calculated using “ad equivalency” values, which are derived from what an equivalent advertising cost to accomplish a similar promotional impact would be.

“Ad Equivalency” is a less popular metric today than it was even a few years ago. It is still useful to report promotion value in terms of total impressions made at marketing events as this provides an idea of “reach”. “Gross Impressions” are those that fall on the eyes and ears of anyone. “Targeted Impressions” are those that fall on the eyes and ears of those who fit your target profile. The total impressions are the sum of all gross and targeted impressions made as a result of show budgeted activity. These activities often include promotion activities in direct marketing, media (including digital and social media) show exposure and exhibit exposure.

The payback ratio is a simple measure of success for your event marketing program. By adding the monetary value of all the tracked and estimated revenue and cost avoidance represented in the categories above, we can compare apparent value of an event to its cost. Using the payback ratio as an index is a great way to convey the value of your marketing events. The payback ratio provides qualitative and quantitative analysis of events and often greatly facilitates the discussion with executives over event strategy and funding.

Measurement Tip 7

Use the Payback Ratio to Report and Compare the Value of Your Events

A great tool for conveying the value of your marketing events is the payback ratio. This is the ratio of the total value of estimated revenue, cost savings and promotion value gained through event activity, divided by the event cost. It is expressed as $ Total Value/$ Event Cost, for example $.42/1. The payback ratio serves not only as an indicator of event efficiency, but also as a useful way to compare past, current and future events.

The payback ratio is based upon estimates of the four main categories of value derived from marketing events:

1. Revenue (or gross profit margin) from the Sales Opportunities Afforded by the Event – This element of event value is cited most often, yet difficult to document. Often, many people are involved in many steps required to close a sale. And, the sales cycle may span years. It is possible to estimate probable revenue impact using internal assumptions, such as a “close ratio” associated with well-qualified event leads and an “average value of sale” for sales from those leads. The best approach is to discuss these assumptions with your sales team and get their agreement. It is also best to have the sales team define the “next step” expected of people who become leads through interactions at an event. Use “closed loop” systems such as sales automation, warranties, registrations and other types of tracking aids where available.

2. Retention and Growth of Current Revenue Base - Customer Relationship Management (CRM) is critical for virtually all organizations. Existing customers and their revenue are the usually the most profitable. I have companies criticized for devoting event marketing resources to interaction with existing customers, yet I would suggest this is one of the most valuable elements of a profitable event. Keeping customers up to date, reassuring them that their needs will be met, and thanking them for their business has a direct and measurable impact on retention and profitability.

Just as most companies have a recognized cost of sale, there may be a recognized cost of CRM. A significant percentage of that cost/ value may be accomplished through event activity. For example, a company might spend 5 or 10% of account revenue on customer service/ retention activity. For example, your company might estimate the value of an executive customer dinner held during an industry event,at 1% of your overall CRM effort for those customers for the year. The value estimate would be $.001/ dollar of existing revenue among customers seen at the event. This may not sound like much until you consider that these revenue numbers can be in the hundreds of millions dollars for a large company. For smaller companies, the impact of such an event is likely to be a much higher percentage of the overall CRM effort. Sometimes these event based “customer events” are the major CRM activity for the year, so a range of 20% or more may be reasonable.

Accomplishment of CRM goals is valuable for companies large and small and contributes to event value. Discuss how your company might determine a value of CRM activity accomplished at marketing events. Don’t forget to take credit for the cost savings made possible by using the event as a time and place opportunity.

3. Cost Savings/ Avoidance- Substantial cost savings and expense avoidance may be achieved through trade show activity. Events present “one on many” and "many on many” opportunities. This element of value is the most tangible and traceable source of ROI on an event. Large numbers of people in your "market universe" may be gathered in one place, thinking about the same concentrated range of topics. Prospects, customers, suppliers, allies, analysts, press, executives, sales, product management and marketing are all at a single event, usually at their own expense. The number and types of potential interactions are huge. Your event plan should have specific tactics to maximize the time, place and focus opportunity made possible by the event.

Be sure your activities at your next event are aimed not only at the income side of the profit equation, but the cost side as well. To make these benefits happen requires dialogue with those managers who can take advantage of the opportunity your event provides. They may also help you estimate the value of doing multiple things at an event instead of doing them one at a time in the future at additional expense.

Reporting these results in your event measurement report will add credibility and financial justification for your investment beyond the primary goal of increasing sales.

4. Promotion Value – This is often the least reported source of ROI, but promotion value at a marketing event provides real, identifiable value. Promotion value may be calculated using “ad equivalency” values, which are derived from what an equivalent advertising cost to accomplish a similar promotional impact would be.

It is less popular today to use “Ad Equivalency” values, although I believe it is undeniable that exposure through an event has at least the same value as that derived from paid advertising. However, it is still useful to report promotion value in terms of total impressions made at marketing events and to make comparisons with the exposure of your company versus that of your competitors. “Gross Impressions” are those that fall on the eyes and ears of anyone. “Targeted Impressions” are those that fall on the eyes and ears of those who fit your target profile. The total impressions are the sum of all gross and targeted impressions made as a result of show budgeted activity. These actives often include promotion activities in direct marketing, media, show exposure and exhibit exposure.

Discuss how you might value the exposure generated for your company with those responsible for corporate communications, advertising and PR.

Once you have identified and estimated values for some or all of the four elements of value, add them up and divide them by your event cost. The result is a useful index of event profitability or return on investment.

Using the payback ratio as an index is a great way to convey the value of your marketing events. The payback ratio provides qualitative and quantitative analysis of events and often times helps to more easily facilitate a discussion with executives. Remember to use the payback ratio as a simple measure of success for your event marketing program.