Only 20% of companies attending tradeshows with their own stand are sure of obtaining sufficient ROI. This is the chief conclusion of an internal study conducted by MSB Events, a Spanish multinational providing its clients with full organization packages and support for organizing their tradeshows, including consulting and ROI analysis.
The basic conclusions of MSB Events’ study are as follows:
- Eighty percent of companies that regularly attend tradeshows do so without any kind of previous planning: ROI and objectives analyses to obtain an adequate return. Nor do they conduct a ROI analysis after having followed leads, for which reason they do not really know if the tradeshow has been profitable for them or not. Only 20% are sure that they will obtain an adequate ROI.
- Only 1% of companies attending tradeshows have an in-house team specializing in organizing and managing this type of event. The other 99% improvises each time with a different team, without previous training or specialized experience, and regularly involve several different departments, such as marking and production.
- Tradeshow attendance involves an average investment of 50,000 euros. This is the minimum cost for a 90m2 stand, and additional services during a five-day event: staff costs, per diems, transfers, catering, backup equipment, multimedia installation, marketing material, give-aways, etc. This amount is divided proportionally between exhibition space rental, stand construction, and miscellaneous costs.
- Medium-sized and large companies invest between 250,000 and four million euros in tradeshow attendance, which complicates somewhat ROI assessment.
- MSB Event’s specialists believe that an adequate ROI for a tradeshow should be in the region of double the investment, although this will depend on the objectives established by the company, the segment in which it operates, and its mark-up. Besides direct sales, there are other types of measurements including leads, branding, publicity, etc.
Lack of professionalism
This year to date, companies have invested around 1,500 million euros in Spanish tradeshow attendance; a figure that increases from year to year, although the tradeshow bubble showing signs of bursting. It is paradoxical that the important growth that this segment has experienced in Spain over the last few years has not been accompanied by high levels of specific professionalization within companies.
The report conducted by MSB Events shows that the most frequent mistakes made by companies when attending tradeshows are as follows:
- Companies have been renting “air” – exhibit spaces that are far too big just for the sake showing off – for far too long now. The main reasons why exhibitors decide to attend an event include looking for new clients, reinforcing client loyalty and attending regular customers, maintaining brand prestige, increasing visibility, showcasing new products or services, or enlarging distribution networks. However, companies currently believe that nearly half of the existing tradeshows are branding opportunities more than business generators, and the investment made does not vary. Stands are designed to have a visual impact, instead of being efficient. In many cases, this efficiency depends on whether the stand satisfies much more complex market demands and is perceived by visitors as an experience – as practically an event within the tradeshow itself – rather than on its décor.
- Lead and potential client follow-up is practically non-existent. On many occasions, leads are not even introduced into a CRM, meaning that it is very difficult to follow them up after the event and analyse results. In this way, costs are justified, rather than analyzing results.
- Eighty percent of companies attending tradeshows do so without establishing sales objectives, which prevents them from planning sufficiently in accordance with the investment: exhibit space, necessary staffing, measurement system and CRM for lead retrieval, follow-up, etc. The correct way to go about tradeshow attendance is to establish sales objectives well beforehand, and invest a maximum of half the amount estimated in the costs.
- Lack of planning also affects the choice of tradeshows that a company will be attending during the year, not only in Spain, but also abroad, in terms of the most profitable events, interesting potential markets, and the type of message to be transmitted at each one of them: new product, etc. Seventy percent of Spanish companies have never attended a tradeshow abroad.
- Companies do not have professional teams dedicated to tradeshow attendance. These are always improvised, are not fully trained, and do not work in accordance with a model designed to optimize ROI. Without clear guidelines and objectives and sufficient training, on many occasions the company’ staff is only able to attend to visitors basic needs.
- Tradeshows have traditionally spurred economic growth even in times of crisis. The idea is not to stop investing in or attending them, but to choose the most suitable ones and make the most of the advantages that they offer. The majority of companies do not know how to make the most of value-added opportunities like presentations, roundtables, etc.
For some time now, MSB Events has concentrated on guiding its clients through the whole process of exhibiting at a tradeshow or organizing other types of event as sales support. The company believes that the current financial climate demands far-reaching changes in the industry keyed to a greater level of professionalism that allows companies to plan their event budgets precisely to increase ROI, such has been achieved in other countries such as Germany and USA where in times of crisis tradeshow attendance increases.
Likewise, the weight that tradeshows have in the Spanish market has meant that there has been a rush to build centres all over the country, instead of a rational growth in their number based of profitability, and now is the moment to revise this. Along these lines, the new technologies, especially Internet, have provided a large number of opportunities and contributed to many important advances, but at the same time have made face-to-face meetings and personal contact more necessary, above in Latin countries like Spain. With consumers being increasingly more well-informed and demanding, the possibility of handling products before buying them is becoming more important.
