NZTE Export News, March 2011
Kiwi technology exporters love trade shows. We’re quick to jump on a plane, put together a booth and hawk our wares to customers anywhere in the world. It’s the promotional tactic we invest the most in – so how can you be sure you are getting the return on this spend, and your trade show experience isn’t a frustrating and costly one?
In Market Measures 2010, an annual study of sales and marketing activity by New Zealand technology companies, respondents put industry events as their number one area of spend.
Firms spent 24.8 percent of their promotional budget on events. Given the participating companies on average spent 40.1 percent of turnover on sales and marketing, that means trade shows represent a significant investment for the typical tech exporter.
Opportunities to show off your wares are virtually limitless, with every conceivable industry sector having a plethora of conferences. Tens of thousands of major exhibitions take place around the world each year.
In July 2011 you could attend the Pet Accessory Expo in Hong Kong, or in October get an insight into Azerbaijan’s building sector by attending Baku Build.
Then there are the more traditional events that Kiwi tech companies attend such as CeBIT (World Center for Office, Information and Communications Technology) in Germany (with an Australian version being held in May 2011), CES (Consumer Electronics Show) in the United States or Gartner Symposiums worldwide.
Funding international industry events is a challenge for many companies, small or large. Pre-conference promotion, travel, accommodation, exhibitor fees, stand expenses, customer entertainment and follow-up can add up to a considerable bill. For an early stage company, investing in a major trade show is a critical decision.
For many New Zealand firms, attending a trade show is still the way we typically start our offshore market activity. Sometimes it is designed as a learning experience, but for too many it is a leap of faith – the blind hope that someone within the thousands milling around the exhibitors’ hall might be interested in your product, or even buy it.
So how can you assess the value of trade shows in your marketing mix?
What is crucial to remember is that trade shows are, like advertising or direct mail or social media or a brochure, just another marketing communications tool. Unless you understand what your marketing communication ‘problem’ is, it is difficult to judge whether a trade show is an effective choice or not.
Trade shows can be an effective tactic when used for the right purpose. They often take place in strategic locations at the centre of your target market; bring large numbers of your potential customers together; provide a unique opportunity for direct, active engagement with customers; and provide an opportunity to observe your main competitors at close quarters.
Kiwi exporters use industry events in number of ways. Most common, and most obvious in terms of return on investment calculation, is to generate qualified sales leads.
Other companies have used them as a cost-effective launch platform to international media – the right trade show can be the easiest way to get all of your target journalists in one place. YikeBike and the Martin Aircraft Company (makers of the Martin Jetpack) are two good examples. It might be more crowded but it is far cheaper than trying to mount your own international media launch.
Finding and developing distributor relationships is another useful outcome of attending an event, as is doing in-depth market research on target customers and competitors. Many will do a combination of all of the above.
A couple of questions can help you establish whether a specific trade show is for you.
The first question to consider is your target market. Who are they, where are they, what kind of companies are they? Armed with this information you can review trade show attendance lists to see what proportion of those who typically visit belong to your primary target market(s).
If attendees are from your target market, are they typically the right kind of people from those companies? It’s frustrating to put together a stand and the only attendees are junior representatives who have no decision-making power.
Next is understanding what drives your communications strategy, and if a trade show fits with that. Are you focussed primarily on building awareness, deepening relationships, or converting interested prospects to customers? Do you want to reach a wide range of people, or is your target audience tightly defined?
You need to then compare the cost-effectiveness (e.g. cost per qualified prospect ratio) of using a trade show to meet your communication needs against other communications tactics such as advertising, direct mail or online marketing.
It’s easy to fool yourself about the success of a trade show stand. I’ve seen the sales manager at a large company rave about the hundreds of leads generated from an event, with no sense of whether they were a real decision-maker, where in the buying cycle they were and what their main business issues were. Less than 1 percent turned into qualified prospects that could enter the sales process.
The absolute key is to not see the event as a one-off effort, but connected to all of your other promotional tactics. You should use those other tactics to ensure a good proportion of your target market is aware you are attending and have a good incentive to visit your stand or listen to your presentation. Pre and post show direct mail/e-mail, calling programmes, tactical publicity or social media activity can transform your trade show experience from frustrating to fruitful.
There are many techniques that can be used to maximise the impact of your stand and get people to stop and look. The internet is a great source for smart ideas. Creativity is the key, but it’s also important that anything you do is consistent with the message you are trying to send.
The bottom line with trade shows is that attendance doesn’t guarantee success. Trade shows are just a communications ‘solution’ so you need to work hard at defining the ‘problem’ – what market, what strategy and what story is your company trying to tell.
Getting these fundamentals right will enable you to confidently assess trade show opportunities, put in a place a programme that delivers a real return on your investment, and make that long flight home a lot more satisfying.