Imagine This Scenario

One month later you’ve got the core trade show team fully engaged. The data harvesting was almost as easy as you had hoped and as eye opening as you expected. Three of the first four shows assessed suffered from drastic over, or under-staffing. There seemed to be either much larger, or smaller, booth sizes than the audience warranted. Promotional efforts and budgets seemed completely disassociated from your company’s goals and objectives for the show.

Gina, the team member most responsive to this new approach, has started taking over show analysis on her own. She starts working on the 5th show. This is the one where the execs usually sneak away to play golf at a five-star resort. She glances at you knowingly and says, "I wonder what the Payback Ratio will be for their round?".

By the time you've hit the 3 month mark you've started to use past and current performance to forecast predicted results at upcoming shows. You've tackled one of the core challenges of managing a trade show schedule and its related investments. The team understands collecting and analyzing data and metrics is imperative. But the next challenge lies in giving them the confidence and ability to forecast future results. Now they can make smart business decisions based on these forecasts.

Earlier we outlined the 3 fundamental challenges that need to be met when analyzing existing events, projecting future performance, and comparing results with other marketing efforts.
 
To help meet these challenges, we’ve shared some measurement strategies and metrics. These will help you paint a full picture of the value and costs associated with each event on your schedule.
 
However, without distilling the value and costs of each show into a single metric, all you’re left with is sheets of divergent data points.
“The Payback Ratio” is that single metric. By tallying the value created at each event and dividing that value by the costs incurred, you’re left with a digestible, comparable, and rigorous metric. Now you can justify expanding, adjusting, adding, or eliminating certain trade show and event investments.
The Payback Ratio is simply another term for ROI or Return on Investment. For a given event it may be $30/1, $3/1, or $0.30/1. The Payback ratio gives you a consistent measurement framework and allows you to meet all 3 challenges of trade show investment.

Right Sizing Investments With the Payback Ratio 

Once you’ve established a Payback Ratio for each show on your schedule, justifying budget alterations becomes an easy affair. Using any spreadsheet program, you can sort your shows highest to lowest based on their Payback Ratio. Looking critically at variables associated with both value drivers and cost centers, suggest adjustments to “right size” your investments.

 

This will maximize your Payback Ratio. It's likely to include either or both expansions and contractions.

For example, perhaps at one of your shows with a middle-of-the-road Payback Ratio, you had strong qualified lead counts. You engaged with nearly the maximum number of attendees that could be expected, given the number of show hours and your booth size. But you brought 8 booth staffers who each worked the booth for 4 hours of the show. Suggesting to halve the number of staffers invited and have each remaining staffer work the booth 8 hours should drastically lower both your hard costs and opportunity costs while having a negligible effect on the value derived from the event. You just raised the Payback Ratio significantly.

Conversely, perhaps a certain show’s qualified lead counts or the number of meetings scheduled were decent. But your staff interacted with only a small portion of the available target audience at the show. Suggesting a larger booth size and increased investment in sponsorship level for this show could bring an out sized return compared to the additional investment.

Right Sizing Investments With the Payback Ratio 

Once you’ve established a Payback Ratio for each show on your schedule, justifying budget alterations becomes an easy affair. Using any spreadsheet program, you can sort your shows highest to lowest based on their Payback Ratio. Looking critically at variables associated with both value drivers and cost centers, suggest adjustments to “right size” your investments.

This will maximize your Payback Ratio. It's likely to include either or both expansions and contractions.

For example, perhaps at one of your shows with a middle-of-the-road Payback Ratio, you had strong qualified lead counts. You engaged with nearly the maximum number of attendees that could be expected, given the number of show hours and your booth size. But you brought 8 booth staffers who each worked the booth for 4 hours of the show. Suggesting to halve the number of staffers invited and have each remaining staffer work the booth 8 hours should drastically lower both your hard costs and opportunity costs while having a negligible effect on the value derived from the event. You just raised the Payback Ratio significantly.

Conversely, perhaps a certain show’s qualified lead counts or the number of meetings scheduled were decent. But your staff interacted with only a small portion of the available target audience at the show. Suggesting a larger booth size and increased investment in sponsorship level for this show could bring an out sized return compared to the additional investment.

Forecasting The Future With The Payback Ratio 

Being able to effectively and objectively project future results based on historical performance is essential to managing trade show and event schedules and investment levels. You have the responsibility to research and suggest new shows to participate in and to justify budgetary reallocations to support these new endeavors. By using the historical quantitative and qualitative metrics you’ve harvested, you’ll be able to confidently justify your suggestions for your program based on projected Payback Ratios.

Add rows into your measurement spreadsheet to represent your suggested additions to the show schedule. Begin assigning suggested budgets for existing shows based on historical performance and investment levels. Adjust up or down to meet the ideal mix of value and cost and allocate budgetary dollars to your suggested additions. You can do this by researching your historical performance at shows with similarly targeted audiences, market reach and relevance. You then add in geographic location, plus any other variables, to calculate an anticipated Payback Ratio. Sort your sheet by show date to look for overlap or potential logistical issues. Make critical decisions regarding participation level, usage of exhibit assets, and staffing concerns. Update your suggested budgets, projections, and Payback Ratio for each show accordingly. Finally, sort the updated sheet from highest Payback Ratio to lowest and begin a “burn-down” of your allocated budget. Subtract your suggested budget for each of the highest performing shows from your total budget until you’ve run out of funds. Any shows left unfunded or insufficiently funded through this exercise should be critically evaluated based on qualitative factors and considered for elimination.

Evaluating Dissimilar Marketing Efforts With The Payback Ratio

Even if your trade show budget is separate and distinct from other Marketing, Advertising, and PR budgets, at the highest levels all of a company’s investments are considered and must be justified within the larger context of competing, complementary or conflicting initiatives. Establishing effective measurement for the messaging, Advertising, PR, and customer satisfaction value your event efforts produce allows for their side-by-side comparison with other investments.

Trade shows and events have an exponentially higher concentration of targeted audience members than most other forms of advertising and marketing. By establishing the value of the impressions made through trade shows, as well as calculating the cost of achieving similar impressions through other messaging, you create a framework that allows for dissimilar marketing efforts to be evaluated objectively.

For example, the costs of a billboard campaign may be quite palatable. Design an ad and pay to have it displayed on a major roadway your target audience is known to travel. But billboard campaigns are good for multiple 5 to 7 second impressions, at best. You’re also paying to have them displayed to many commuters who are not in your target audience. Compare this to your trade show efforts, where the costs are much higher but where face-to-face interaction with your staff and hands-on interaction with your products can produce much more business value. There are times where trade show and event investments will not be justified under such comparisons. But a rigorous measurement and reporting framework based on the Payback Ratio allows for your efforts to be evaluated on equal footing.

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Imagine This Scenario 

Your 6 months are up. You’ve analyzed nearly 40 shows in that time on a detailed and consistent set of metrics. You are prepared to offer your recommendations with confidence.

The Executive team had come to you requesting a 25% reduction in the budget. But you’re about to walk in and suggest a 4% increase. However, your plans include nearly wholesale investment reallocations. Let's drop some shows in the Southwest that no one even realized you exhibited at any more. Let's raise our profile at two larger Fall shows to coincide with a planned product release. Let's adjust booth sizes, staffing levels and sponsorship expenses at over 80% of your company’s trade show schedule.

Heads start nodding as you begin detailing the potential value from your projected trade show investments. You detail and explain the measurements and projections your suggestions are based on. No one else in the room anticipated this level of analysis to be undertaken. They were unaware it was even possible. The meeting ends with the Executive team expressing gratitude for the forward thinking and value-based approach you brought to this initiative.

Your budget may go up by 4%, or down by 25%. But you’ve shown that you’re capable of justifying your company’s trade show investments based on the value they create. You're no longer just defending your schedule because “that’s what the Company has always done”.

Establishing a consistent measurement program gives you the ability to present objective evidence to back your suggestions. Don't only report the raw results and the costs of your efforts without establishing the value your events produce. You’ll be unable to position your show schedule as an investment with a meaningful return. And if you’re not reviewing your event calendar and researching potential additions and adjustments, but merely pumping out a facsimile of last year’s schedule and budget usage, you’re missing opportunities. These are opportunities to be seen as a strategic thinker and responsible steward of company funds. Rigorous and consistent measurement allows you to justify your investments, rather than resorting to defending them.

Establishing a consistent measurement program gives you the ability to present objective evidence to back your suggestions. Don't only report the raw results and the costs of your efforts without establishing the value your events produce. You’ll be unable to position your show schedule as an investment with a meaningful return. And if you’re not reviewing your event calendar and researching potential additions and adjustments, but merely pumping out a facsimile of last year’s schedule and budget usage, you’re missing opportunities. These are opportunities to be seen as a strategic thinker and responsible steward of company funds. Rigorous and consistent measurement allows you to justify your investments, rather than resorting to defending them.

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