Budgeting for Tradeshows—Not for the Faint of Heart
When it comes to tradeshow planning, determining your exhibiting budget can be a little overwhelming. With so many things to consider when planning for an upcoming show, it’s helpful to have some guidance so you can be sure that all your bases are covered effectively. The goal of this article is to assist you in the specifics of budgeting based on standards AND tradeshow goals. This article will serve as a reference guide and save you some headaches by assisting you in the specifics of staying on budget and achieving your tradeshow goals.
Goal Setting
As discussed in my previous article, positive Tradeshow ROI is critical. At very least you must achieve what is considered a “GOOD” ROI or a 1-1 payback, but in my book, that isn’t good enough. A dollar in for a dollar out just makes you tired, right? A lot of work with no return on the effort? Who wants that? A “BETTER” guideline is a 3-5 payback or 300-500% ROI. The “BEST” ROI is as high as you can go!
You can’t achieve a positive ROI without having the entire team onboard and engaged with the desired outcome of the show. In many businesses tradeshows are considered a fun “perk” or a time to get away from the office and play a bit. While I agree that tradeshows are a blast, the amount of fun derived from the event should directly correlate to the positive ROI the business receives from attending. Having the entire staff on board with the performance and financial goals are the FIRST steps in a successful tradeshow. You can rest assured that when the staff understands what is being measured, they will rise to the expectations and deliver.
A quick review of the suggest metrics and benchmarks for tracking ROI is in order. Knowing that you will be measuring your success in the following area will help you as you budget your resources:
- Exhibit Interaction Capacity/Utilization: Benchmark 80-100%
- Exhibit Attraction Efficiency: Benchmark 45%
- Staff Interaction Rate: Benchmark 100%
- Cost per Interaction (CPI): Benchmark $80 (average cost of NA B2B Field Sales call is $596)
- Cost per Lead(CPL): Benchmark $200
- Cost per Sales Order (CPSO): Subject to Show attendance and focus
- Lead Quality and Quantity: Benchmark depends on attendance. Lead quality: A-Leads 45%, B-Leads 40%, C-Leads 15%
- Potential Value of Leads Captured:
- Hard Dollar ROI (at and post-show sales): Determine if you are going to measure Revenue or Gross Margin… a good target is 10:1 ROI
- Soft Dollar ROI:
Budgeting for Exhibit Success
One of the first steps appropriately budgeting is knowing what the standards are and then using a zero-based budgeting (ZBB) to justify your expenditures. Zero-based budgeting is a method of budgeting in which all expenses must be justified for each new period, or in our case each tradeshow.
A good rule of thumb for your overall budget is floor space cost X 5. Some companies try to go with the floor space cost x 3 model but this typically does not give you the budget necessary to drive qualified traffic to your booth, deliver a quality visitor experience or train your booth staff appropriately. Budget a little extra and spend those dollars in these 3 key areas. You must have qualified traffic having a quality experience to reach your goals.
When it comes to hard dollars, exhibiting budgets are typically spent on eight (8) major areas.
When you get into the details of the areas, a key question to ask yourself about every expenditure on every line item is, “How could I do this at a lower cost and get the same or higher value?
Money Saving Tips
Exhibits:
- Consider purchasing a pre-owned exhibit
- Consider renting an exhibit
- If building your own exhibit, negotiate a discount with the exhibit house for upfront payment
- Shop material options -remember increased weight increases all costs long term
Graphics
- Design strategically. Plan on reusing up to 90% of your graphics. If you have show-specific messaging, keep it to 10-20% maximum. Repurpose the remaining graphics.
- If you don’t have an in-house design team, us freelance designers, stock photos and run a contest on freelancer.com. You will be amazed at their creativity.
- Price out graphics. With appropriate planning, you can save as much as 75% on your printing costs. I have found iprintsameday.com to be a very valuable resource especially for pop up banners.
- Consider switching to digital signage if you need to constantly update your graphics
Staffing & Travel
- DON’T bring too many staffers! A rule of thumb is 1 staffer for every 50 square feet. (2 for a 10×10 booth)
- Reward frugality-to encourage staffers to spend less, offer a percentage rebate to those who stay under their allotted per diem
- Consider VRBO or similar for your lodging. Not only does this provide a great team building environment, the savings can be significant.
- Book early
Show Services
- READ, READ, READ. Pay careful attention to and meet or exceed all deadlines.
- Take advantage of all early-bird discounts by ordering in advance
- Bring your own supplies. It is often less expensive to purchase and donate instead of renting items from the exhibit hall
- Audit all invoices! Often there are mistakes, missed discounts, incorrect rates, etc. There are even times when you get charged for the items you brought! Pay attention to every detail.
Transportation
- Get multiple bids. I have found that many times your standard carrier is a better option than the “show carrier”.
- Negotiate rates
- Repurpose every item you can while still making the booth look great to deliver a quality visitor experience.
- If you are doing several shows, negotiate a discount with the same carrier and determine if you can ship show to show instead of back to the office then out to another show. This can cut your transportation fees in half!
Installation & Dismantle
- Understand the fees and do it yourself if possible! Each show has guidelines, and understanding them can save you tremendous amounts.
- When designing your booth, be sure to consider the long-term costs of installation and dismantle.
- Number your crates and be organized. Set up your booth pre-show and label the parts to make assembly much faster. Careful planning will eliminate the need to take extra bulky items.
- If using installation services, avoid weekend and overtime. Negotiate with show management to install your booth on a weekday.
- Use power saving devices. Many shows are charging by the watts used, so make sure you are getting the lighting you need by investing in nice LED lights. A little bit invested up front can save you a tremendous amount in the long run. With appropriate planning, some businesses are running their whole booth of “fuel less generators” or battery packs. (humless.com) They charge them in the evenings with permission from a neighboring booth and don’t have to pay the power fees.
Lead Tracking/Follow-up
- Plan, prepare, train and execute. This goes for all lead-tracking methods.
- Consider owning a lead capture system or renting one
- Prepare your lead capture qualifications questions ahead of time and load them into the system or print the “legend” so all leads are categorized effectively even if you are collecting business cards.
- Keep all cards in one place. So many businesses don’t have a central location and staffers put them in their pockets, badge holders, etc. and the visitor never gets the appropriate follow-up.
- Use a CRM.
- Know what your follow-up plans are PRIOR to the show. Typically, there a few options. Make sure every lead has a follow-up action item assigned to them AT THE SHOW. Use the lead capture tools effectively.
Promotion
- Take advantage of packaged marketing deals that the show offers
- Order supplies well in advance to reduce rush fees and freight costs. Consider the fees for shipping directly to your show or lodging location. Get quotes and understand the expenses.
- Print all your marketing materials at the same time to get quantity discounts
- Promote your participation using low-cost marketing methods such as social media platforms, your website, press releases, etc.
- Use mail lists appropriately. Remember all your metrics hinge upon having qualified visitors and a positive visitor experience.
Conclusion
Planning and executing a successful tradeshow with positive ROI is possible. Through understanding how your exhibiting ROI is measured, you can budget for exhibit success. Understanding where the tradeshow dollar goes and how to save money on each expense area will allow you to manage your budgets accordingly. Remember to spend the resources necessary to get quality visitors to your booth, give them a valuable experience, and train your staff well. Plan ahead, have a calendar and follow it religiously.
Do you have some cost savings ideas by expense area you could share? We would love to hear them. What have you found to be the most beneficial? Do you have any disaster stories you want to share that will help others avoid costly mistakes? Thanks in advance for your input!
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