Cost per lead comparison: trade show vs. website
All of our clients regularly attend trade shows. They’re all B2B companies — many of them industrial, and trade shows have forever been something they just do.
The purpose of this blog post is not to suggest that they (or you) should stop attending trade shows — particularly if attendance yields a positive ROI for your company. Instead, I challenge you to really look at the numbers. What is the cost of acquiring a new lead at a trade show? Have you examined how that compares to the cost of acquiring a new lead through your website? Read on and we’ll break it down.
Cost of attending a trade show
These costs of course vary by industry, company and show. But for simplicity’s sake, we’ll use the following numbers:
- Airfare: $300 x 3 attendees ($900)
- Hotel: $150 x 3 attendees x 2 nights ($900)
- Meals: $100 x 3 attendees x 2 days ($600)
- Floor space: $5,000 to $10,00 (let’s say $7500)
- Shipping, other floor expenses ($1000)
- Booth design, printed materials: $3000 divided among 3 trade shows/year ($1000)
This totals at just about $12,000 per trade show. If your company attends three trade shows per year, that’s $36,000 total, not to mention the time of all three employees over the course of two to three days each time around. If you can walk away from each one of those three shows with 50 brand new leads (150 total leads/year), you’ll have paid $240/lead. Flag that number; we’ll come back to it shortly.
Cost of modern B2B website and its counterparts
We frequently catch some heat on first calls with potential clients around the cost of a website rebuild. We often charge $25,000 or more. And we sometimes receive similar reactions to the cost of our $3000 – $8000/month online marketing retainers. These retainers include building an online lead development infrastructure to drive prospects into the website (email, blogging, seo, social media, etc).
“How could you charge that much? I could hire an employee for that cost.”
You’re right, you could hire an employee for that cost. But my answer to these cost concerns is simple: A B2B website is a lead generation tool. Let me rephrase that. A B2B website — when built strategically and surrounded by an online lead development infrastructure — is a lead generation tool. A website exists to attract targeted prospects, convert them into leads, and nurture those leads until they become customers. Period. It must produce a positive ROI, and if built right and surrounded by the right strategy and tools, it will.
Turn your website into a lead generation machine
Our free B2B Website Planning Handbook will help you strategize, plan and build a website that attracts qualified visitors and converts them into real leads.
How many leads should a B2B website produce?
Our experience has shown that an effective B2B website converts at least 2 percent of visitors to leads. That means for every 100 visitors, your website should produce two new contacts with names, phone numbers and email addresses who are interested in something you have to offer.
Let’s say you invest $3000/month into a website overhaul and a traffic and lead generation program. That’s $36,000/year — the same cost as attending three trade shows.
So if your website sees even 50 visits a day (pretty conservative), you should see 30 new leads/month (or 360 new leads/year).
Put that all together and you’re looking at $100/lead produced through your website. By comparison, those three trade shows cost you $240/lead plus the time of all attendees.
So does the $3000/month investment in your website and online marketing initiatives still sound like too much?
Two supporting stats before you go
In their 2013 State of Inbound Marketing report, Hubspot (an industry leader in marketing software) surveyed 3300 business executives on cost per lead. Some key data points follow:
- The lowest cost per lead came from social media and email marketing, followed by SEO and blogging. All three of these sources are part of the online lead development infrastructure, and focused on driving visitors to lead-capture opportunities on the company website.
- The highest cost per lead came from trade shows, with only 12 percent of respondents reporting a below average cost per lead.
If you’re a business-to-business company and don’t think your website is generating leads out of at least 2 percent of your visitors, I encourage you to consider a free B2B website consultation. At the very least we can spend 30 minutes talking through some ideas to transform your site into a more effective lead generation tool.