How to Prove Your Program’s Worth
Unlike other parts of your business model that are easier to track monetarily, figuring out how financially successful a trade show or other marketing event can be convoluted and take some measured evaluation.
There are a lot of costs to hosting one of these shows. You must decide what is too extravagant, what is necessary to show the potential of your business, and what is for sale compared to what is being given away for free as a prize.
Trade shows should not be done if your business is lacking a clear objective from the event or doesn’t have something in mind for what the takeaway will be. You shouldn’t dip your toes into every pool, rather you need to focus on what constitutes a successful day and then it is much easier to execute.
Return on Investment
The objective of any business endeavor is to make money. Unlike traditional means of sales, a trade show has very personalized reasons for happening that specify the intentions of a business in the short and long term.
Do you want investors or buyers to get their hands on your product right away and experiment with it, possibly leading to more sales down the road? If so, you will have to put money into supplying all the show attendees some free merchandise.
If you want to cut down on how much money is put into inventory for the show, perhaps raffle off a select number of products to reduce spending on this section of the show.
If your show is going to be strictly marketing oriented, showy, and dazzling from a display point-of-view, this can be harder to swallow for many business owners. The investment put on displays, lighting, booth amenities, and other intangibles is harder to quantify from a net gain perspective.
This is because the non-product giveaway types of marketing are more to influence customers to eventually come back and buy your services or goods in the future with no guarantees that they actually will. It’s good to weigh how much it costs to give away products with how much it costs to market alternatively, and then go from there. This is all part of a mathematically quantifiable term that has been imperative to business owners for eons.
Customer Acquisition Costs
Products used at the show and amenities at the booths are just one part of calculating what the customer acquisition cost is of the trade show event you are putting on. You also would need to include the salaries of the employees you paid during the event, the amount of money it took to fly company people out to the event and house them in a hotel room, and the cleaning and organizing costs before and after everything happens.
You then divide the total cost of the trade show by the number of customers you gained from it. This can be a little vague, obviously, so get creative in deciding how many folks you have acquired. Look at your social media and you can glean how much word-of-mouth came from your booth.
If you put your capital towards a product that was distributed at the show, see if the sales increase in any way in the weeks following. There is no clear-cut method to trade show success, but isn’t that part of the risk-reward basis for any type of business venture? You have to spend money to make money, at least within reason.