The Importance of Trade Show ROI

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The Importance of ROI

In a slow economy, CFO’s sharpen their pencils and their focus on ROI. Here are ways to help you calculate your trade show return on investment and be ready to answer your CFO’s question, “What do we get out of this show?”

Why Measure the Results?
Measuring the results of your trade show exhibit does more than provide statistics for management. Here are some of the main reasons why measuring your trade show results is a good idea:

Justification - Exhibiting can be a major line item on your marketing budget. Measuring results can justify the investment as well as help you determine which shows provide you with the highest ROI.

Choosing Exhibitions - The measured results will help you determine the most rewarding exhibitions for your company.

Improve Performance - Measuring allows your company’s sales team to improve on marketing activities before, during and after the show.

Accomplish Goals - When you measure goal-driven activities, your team will work harder to get those activities done. So if you want to reach your goals, measure the results and share them with your team.

Calculating Quantitative ROI
Determining whether trade shows are beneficial to your company in a time of economic slow-down is as simple as calculating your return on investment (ROI).

ROI is the best way to determine where your leads come from and how beneficial specific trade show events are to your company’s sales. Because potential clients often need more than one contact point before making the purchase, it is important that lead tracking be managed throughout the year to determine where the sale originated (i.e. the lead at the trade show and not the final sales call).

There are several values that must be known before calculating ROI:

The average number of qualified leads it takes to get a sales appointment
The average percentage of appointments that turn into sales (close-ratio)
The average dollar amount of each sale

Multiply total number of qualified leads by the percentage of leads it takes to get a sales appointment.

Example: 50 x .25 (or 25%) = 12.5

Multiply that number by the average percentage of appointments that turn into sales.

Example: 12.5 x .5 (or 50%) = 6.25

Multiply that number by the average dollar amount of each sale.

Example: 6.25 x 2,500 = $15,625

Divide that number (gross sales) by the total cost of the trade show to calculate ROI.

Example: 15,625 / 9,000 = 1.74

Your ROI ratio is: 1:1.74
(for every dollar you spent you got $1.74 back)

Qualitative ROI
Keep in mind that the aforementioned calculation only shows the dollar value of the trade show investment. It does not include intangible items that are extremely valuable and important to report to management when determining ROI for trade shows.
Some items cannot be quantified, but they are just as important for determining the value of trade show exhibition and attendance. Qualitative ROI includes such important factors as brand awareness, relationship building, lifetime value of a customer and networking.