Key Strategy Integration: The CMO Perspective
What’s the best way to measure trade show ROI? Considering the current economic environment, most companies are demanding stronger justification for trade show participation. Studies show that trade show expenses comprise 10-25% of the total marketing budget for most companies; in fact, trade show expenses make up the second largest marketing expense item, right after sales expenses. But despite the substantial investment required for companies to take part in trade shows, the measurement of trade show success is often “muddy.” For instance, if a customer makes a purchase two years after attending a product introduction at a trade show, should that sale be counted in measuring the success of the trade show that took place two years ago?
There are several methods that are most commonly used to measure trade show effectiveness, such as the number of new prospects acquired, the amount of booth traffic, and sales volume. According to the 2010 TSEA Exhibit Management Survey Analysis, 55-60% of companies measure trade show success based on the total number of leads and/or the total amount of sales generated from customers at the trade show. Approximately 43% of respondents say that they measure results based on ROI/ROO; however the specific measurement method for determining ROI/ROO was not detailed in the study. Other frequently used measurement metrics include number of contacts (28%), press coverage (23%) and booth traffic (19%). Nonetheless, these quantitative measurements only give a partial picture of total trade show benefits.
The 2010 TSEA Exhibit Management Survey indicates that just 6% of the companies surveyed use any type of formal research to measure results of the trade show; and, the overwhelming majority of this research focuses only on the impressions of company representatives who attended the show. Formal research can be expanded to include other factors that impact trade show success, such as those that produce intangible benefits. These intangible benefits could be in the form of more accurate responses to customer inquiries, enhanced departmental communications, and changes in company policies that enable a better competitive advantage. Unfortunately, these intangible benefits are rarely taken into account when measuring trade show success.
A new option for measuring trade show success is defined by the Return on Trade Show Information (RTSI) model. Developed by Dr. Bettis-Outland, RTSI suggests that when information acquired at the trade show is shared with other members of the organization, this often results in improved communications across the enterprise as well as enhanced knowledge of customer needs and preferences.
Information is the new currency in today’s business environment. RTSI calculates the value of information acquired at the trade show, and recognizes both tangible and intangible benefits that result from use of this new information. However, the measurement of information value is often “fuzzy” - such as the value of newly acquired trade show information that generates a number of new product ideas as a result of talking with customers, suppliers, and industry analysts at the exhibit. RTSI looks at whether this newly acquired trade show information goes beyond the trade show attendee, in other words, whether it is shared with other people or other departments in the company. The final outcome variable in the RTSI model defines what actions are taken as a result of sharing trade show information throughout the department and the company. These actions might be in the form of: (1) reorganization of the department in order to better respond to customer inquiries; (2) more customer service staff on hand during certain periods that have higher than average call volume; (3) modification of materials used to develop new products due to industry regulatory changes; and (4) sales projection adjustments that result from changes in the competitive landscape.
Designed for executives and senior marketing management, this session emphasizes the importance of integrating trade show management into the overall corporate strategy. Specifically, this session addresses the process of acquiring new trade show information, dissemination of this new information, and finally, to actions that are taken as a result of sharing relevant trade show information with others in the organization. The incorporation of company strategic directives is critical in order to attain the highest RTSI. In addition to providing a course of action based on new trade show information, RTSI analysis can be used as a way for organizational members and departments to collaborate and set goals for information acquisition at future exhibitions.
About the Author
Harriette Bettis Outland, PhD is Marketing Professor
University of West Florida