I’m a recovering trade show runner.
As a marketing director for four years, the trade show was always, ALWAYS the biggest expense on the budget, the most effort in manpower, and the biggest waste of time on all the impactful things marketing could do.
There, I said it.
I remember sitting in my President’s office at my former company in 2018. Our major trade show had increasingly produced diminishing returns. The effort to make the show happen had likewise become increasingly demanding, and the work was coming at the expense of other activities.
It also was impacting department morale, knowing that we were putting forth a ton of effort that wasn’t making much of a business impact.
Finally, my boss asked: “Is the trade show actually worth going to?”
To which I responded: “Not unless you view it as a brand exercise.”
Even then, with that qualifying answer, I was dead wrong.
That was a cop-out way of saying the expense was a budget sink that would be better allocated elsewhere.
Since recovering from the trade show hamster wheel, I’ve developed more clarity on why the trade show is an incredibly obsolete investment for industrial companies. And that was pre-pandemic. It’s only accelerated the obvious: you can build more brand in your company and create a better business outcome by funneling that spend into digital channels.
With that, let’s walk through the unit economics of the trade show. Then, I’ll compare that to a reallocated budget spend on digital channels. Lastly, I’ll speak to the common objections you’re likely to think of to still justify attending the trade show, and how you can stay involved without being stuck under its thumb.
Trade show unit economics
I’m not breaking any news here, but trade shows are freaking expensive.
At our biggest trade show, we budgeted $230,000 for our 40’ x 60’ booth. That included everything from drayage to material handling to on-site labor to electricity/utilities to rigging to trussing.
If you sell heavy industrial equipment like we did, that’s pretty standard and for some may be a low spend for a booth that size (your equipment may be much heavier, requiring more costly drayage and rigging).
And this doesn’t even account for travel, hotel, and meals. If you send 20 people to the show, expect another $50,000 in travel fees if your show is three days in a big city.
So let’s break down the unit economics of this show and how I came to the obvious conclusion this was an extreme waste of budget compared to alternatives.
First, the attendance.
The show would promise 40,000 qualified attendees to the show.
And they delivered on that. The first day the place buzzes with people. The smell of singed base metal fills the air. Every robot is dancing or filling a beer cup or serving ice cream if it’s not performing an industrial function. The micro influencers are out in force with their company partners doing collaborative content hits.
It’s fun, there’s no question about it.
But remove the energy from the equation. Because the numbers show you this is more like being in a casino and show management is the house.
Let’s start with the concept of impressions. Impressions are a term used in digital advertising, and it’s the number of times your ad is viewed by your audience.
On digital channels, you don’t pay for impressions (unless you choose to). In trade shows, it’s part of the unit economics.
What I mean by that is you are paying in part because of the space needed to accommodate a crowd of that size. Those 40,000 attendees are baked in to the expense.
So let’s use those 40,000 people as the potential number of impressions that exist for your major trade show.
Here’s the cost of that per attendee:
$230,000 / 40,000 attendees = $5.75 per impression
Except in reality, you don’t get 40,000 impressions on your booth experience, because it’s a guarantee not even a quarter of attendees will see your booth or notice it, unless you’re one of the big dogs exhibiting.
Then there’s the real carrot… the badge scan.
The badge scan is what show management has been selling you as the reward for all that spend and all that time put in.
Show management guarantees prequalified “buyers” ready to submit a PO within weeks of visiting your booth and seeing your brand for the first time ever.
It’s really expensive though when you consider the intent behind the badge scan and the reality behind what branding actually entails.
Most of these people are simply perusing around and looking at anything that catches their eye. Few go to the trade show now with serious buying intent. Now, it’s for meetings, networking, and frankly the few company-paid days away from the office.
Badge scans are not stated intent. It’s assumed intent on the part of your eager sales rep or marketing manager. They deduce by talking to this lead for five minutes that they’re legitimately interested in that product.
Remember, this person has probably gotten scanned 50 times at this show. They will barely remember you by the time they unpack their suitcase at home.
But for argument’s sake, let’s say your team scans 300 badges for your $230,000 investment. That’s a whopping number of badges scanned. What are you paying for each badge scanned?
$230,000 / 300 badges scanned = $767 per lead
Afterwards, we have to see how many of these leads turn into opportunities, right? Let’s say your team miraculously flips 3% of these leads into an opportunity.
What are you paying per opportunity?
$230,000 / (300 x 3%) = $25,556 per sales opportunity
Let’s take this a step further. Say you win 25% of those sales opportunities:
$230,000 / 2 = $115,000 per closed won sales opportunity
If your product or solution is $100,000, congratulations. You just lost $30,000 before accounting for travel and expenses.
When I say the unit economics of trade shows don’t work, it’s because this is for many the rosiest picture that can be painted. It’s also the practicality of the trade show.
You bank an inordinate amount of time, effort, and money into what amounts to a three day showcase. How can your marketing have any chance to blossom and your brand any chance to take hold when the entire department’s existence is built on a 24 hour experience?
The better move would be to reallocate this spend and stretch it 365 days with a content marketing strategy + intentional brand building through growth channels.
So, what the heck do I mean by that?
Reallocated budget spend
I harp on paid content distribution a lot, if only because I’ve seen and witnessed how much more effective a marketing tactic it is from the alternatives I see in manufacturing.
It’s also still relatively untapped. You don’t compete with your competitors on most of these channels. So while you will compete with other brands, you’ll inherently stick out because you’ll be distinct in a marketplace if you can make good content.
As opposed to your trade show, where you look like everyone else.
Let’s get into the unit economics of digital ad spend.
Remember that $5.75 you pay per impression at a trade show?
On digital platforms, impressions are not baked into the cost of running paid media. You pay when your ad is clicked on and your content viewed.
So it’s reasonable and feasible to spend $0.01 – $0.02 per impression. PER IMPRESSION. Literally a couple pennies to get target eyeballs on your ad to build and breed familiarity.
Except that fee is baked in as a result of the person clicking on your ad.
And if the creative is good and the content valuable and relevant to them, you start to build equity.
The power of that impression is real, too. As your audience is continuously introduced to your brand and your company time and time again on the channels they spend time on, they become more familiar with your brand. Which then spills over into the other channels they find you on.
All that good equity you deposit into your audience is what builds true brand, and allows you to win on the qualities and features that you want to win on (customer service, unique process, user friendliness, etc.).
It’s hard to cram all that communication into a 24 hour experience in a sea of stimuli.
The cost effectiveness of digital content distribution comparatively is a no brainer.
So, what about the badge scan? This is where the true value of that contact information is actually worth considering.
Again, this goes back to stated intent vs. assumed intent. When your team member scans a badge, unless that person is emphatically stating they want a demo or pricing or a consult, it’s really a wasted scan.
Your team will spend time and effort pursuing a lead that is never going to convert instead of working with existing opportunities that have a greater probability.
My last year doing our major trade show, we set aside an entire week and a half period after the show where the Outside Sales team was calling on all the badge scans we had from the show. Every single person we rated 4 or 5 stars (for whatever that’s worth) was called, emailed, and followed up with.
Detailed notes were provided for each of these people.
We ended up creating two opportunities from that eight working day effort. When they instead could have been on the road working existing opportunities and getting them closer to the finish line.
So I ask again, what’s the value of that contact information if it won’t convert?
The better use of time for your sales team is to have them act on stated intent. That’s your website visitors who are submitting an RFQ, completing a contact form asking for a consult, or reaching out to you directly.
It’s not a badge scan, which is the marketing equivalent of an ebook download. Ask how many of your sales reps are excited to get ebook download contacts passed to them.
There’s two ways to get sales opportunities. You can knock on people’s doors or have them knock on yours.
You’d much rather it be the latter.
You don’t get that from following up on lukewarm trade show leads.
So, how do you get people to knock on your door?
This is back to the idea of paid social or SEO. Distributing your own content on Facebook, you can get people to the pages you want for less than a dollar.
On LinkedIn, because it’s a more expensive ad platform, you’re more likely to pay in the $7 – 11 range. Sometimes more.
Compare that to $767 per badge scan.
And unlike your trade show, you get to pursue this audience 365 days a year and give them a new experience whenever your content gets stale.
But, like your booth (hopefully), your content has to be good. It must convey value. Your audience has to build trust in you from it.
Fortunately for you, you can build a program and pursue that audience 365 days a year so you can figure out what works and what doesn’t.
With a program optimized towards those people stating intent with you, you lower your cost per opportunity, increase your closed won percentage, and give your sales team more buy-ready leads who have more affinity with your company from your content than from your trade show experience.
That’s winning on brand — and it’s a concept industrial companies have yet to unlock but presents a massive growth channel if executed properly.
Okay, with the cost efficiencies of brand marketing now clearly defined, let’s detail the common ways industrial companies, even with this preponderance of evidence, still will justify the trade show at the expense of better options.
Common objections & remedies
It’s common for even the most disciplined and cost-conscious executives to experience a little FOMO about skipping out on the trade show experience.
There’s a great quote from Kevin Dorsey that sums this feeling up perfectly: “People would rather lose money the way they know how than make money in a new way.”
So with that, let’s go over some of the common objections I’ve witnessed in these meetings and go over how to not have FOMO while saving your budget from certain doom.
Objection #1: Our competitors will be there
Great! Let them burn that money. If you’re worried they may start some rumors about the health of your company, it’s likely misplaced.
Privately, they’re having the same discussion and expressing the same doubt you are. All of your competitors are spending the same exorbitant amount of budget on the major trade show you are, they just have their head in the sand about it.
You can display more wisdom and discipline reinvesting in marketing growth channels that work and you can measure. And they’ll allow you to be far more agile in your marketing spend.
Also, just because you’re not exhibiting at the show doesn’t mean you can’t show up. Which brings us to the next excuse.
Objection #2: But we won’t be able to meet face to face with key people
This excuse comes from thinking the only way you can make an impact at a trade show is by exhibiting.
Again, there’s nothing stopping you from attending your trade show. Go walk it and meet with your distributors and take your key customers out to dinner.
There’s also nothing stopping you from renting conference room space at the Exhibit Hall or getting one at the hotel next door and holding key meetings there.
All the cost is in the exhibiting — the products you ship, the labor you hire, and utilities you pay for.
And all of that really amounts to spectacle.
Truly great marketing is just like sales. It’s about cultivating relationships. You’re just doing it differently via marketing.
Brief encounters at trade show booths don’t build that relationship. At least not without substantial relationship building with potential customers consistently throughout the rest of the year.
Objection #3: If we want to exhibit in future years, we’ll lose our slot
I’m going to call this for what it is… fear mongering.
Let’s say you did spend $230,000 on your booth, like we did. Then you decided to take a couple years off to try other growth channels and see if there was more to be had.
For whatever reason, you decide to come back into the fray. Maybe at a smaller footprint or maybe the same.
Do you honestly think show management is going to turn down your money and not give you a floor space commensurate with your investment?
Yea, me neither.
Don’t let this commonly held belief affect your decision-making. If you want to get back in, your money will still be good there.
Objection #4: I don’t want to spend all that unused budget on digital ads
This is a reasonable push back. After all, reallocating all of that spend into digital ads would amount to nearly $20,000 per month in ad spend.
Now I know several mid eight-figure industrial companies spending $20,000 a month profitably on digital advertising, but you may not feel comfortable allocating that budget there.
No problem. There’s a few other avenues I would say are worth pursuing.
One is to reallocate that spend into multiple smaller events regionally. Partner with other companies or distributors if you sell through a dealer network to have an event. Find a micro influencer on Instagram or Facebook that lives in that area to partner with you. Then invite to your email list in that area.
Hire a local videographer and make it into both a relationship building event and a content project.
You get way more out of that for less spend, and could do five or six of those per year and end up spending far less and having way more impact.
The other option is to simply hold part of that budget as a variable spend. Let it be used for a promotional series, or if one of your paid channels performs especially well, have discretionary spending available to scale it.
By now I hope you’ve at least started scrutinizing the business impact of your industry trade show. That’s really what I want to accomplish with this blog: to get you to examine the parts of your business you’ve accepted spending money on but haven’t evaluated with the fine-tooth comb it deserves.
Maybe your marketing manager wanted to protect their livelihood, or you’d always thought of marketing as a cost sink.
Let it be known that marketing’s job today has to be to produce a business impact. Anything less cannot be acceptable. If your trade show isn’t showing up as positive-sourced revenue opportunities on your sales dashboard, it’s time to ask yourself if there’s better ways that money can be used.
Ready to jump off the trade show hamster wheel?
You might not be quite ready to press reset on your marketing, but if you’re looking for more insight on how to modernize your marketing game, we have you covered.
Join myself and fellow G76 Senior Strategist Julian Schaaf for Industrial Marketing Live, a 2x per month webinar series where we go deep on marketing best practices and strategies for manufacturing companies.
You can register here. If you’re busy, no worries, we ship the recording the day after every one. Watch it on your time.
Prefer to see if we can help you more directly? Consider a Road Map with the Gorilla team. We start with a front-end content strategy and build the demand gen engine on the back of it, building your company’s brand and getting that marketing-sourced revenue engine purring.
And if you want, contact me anytime on LinkedIn. Happy to talk and dish on marketing and your business. It’s what I love to do!
Success nothing less, my friend.