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Do trade shows provide value?
Do Trade Shows Provide Value? C. M. Sashi Jim Perretty Trade shows are an important part of the industrial marketing mix, but considerable skepticism prevails regarding their value. This article reviews the research regarding reasons for participating in trade shows, and suggests how marketing executives can take specijc actions to make trade show participation successful.
While all elements within the communication program are vital, perhaps only the exhibition will involve all disci-
INTRODUCTION Like most business expenses today, the cost of exhibiting at trade shows continues to go up. A question troubling many companies is whether these shows are worth the expense. Trade shows are big business. In 1983 the Trade Show Bureau reported that more than 9 1,000 firms spent $7 billion to display their wares to more than 31 million prospective buyers at 8,000 trade shows [I]. The number of trade shows held annually more than doubled between 1978 and 1988, increasing from about 4500 to more than 9000. Individual shows have grown in size, with exhibit space increasing by an average of 8% each year from 1974 to 1984, and the number of new exhibitors has increased at an average annual rate of more than 5% [2]. In 1989 professional attendance increased 3.3%, net square feet of space sold increased 5.3%, and the number of exhibiting companies was up 4.9% [3]. More than Address correspondence to C. M. Sashi. Dept. of Marketing, lantic University, P.O. Box 3091, Boca Raton. FL 3343 I-0991.
Industrial
0
Marketing
Management
145,000 firms were expected to participate in trade shows in 1991 [4]. Over the years a controversy has persisted about the value of trade shows. Emotions span a spectrum from full enthusiasm about participation to complete disillusionment, as illustrated by these comments:
21,
249-255
(1992)
Elsevier Science Publishing Co., Inc., 1992 655 Avenue of the Americas. New York, NY 10010
Florida At-
plines, and will present the greatest opportunity Gould as a total company [5].
to present
Trade shows are usually a form of mass hysteria. It is a foregone conclusion that they are very expensive. Even though there may be thousands of visitors, there are also thousands of exhibits. The retention factor is very debatable. . . every time we exhibit at a trade show, our conclusion is “never again” [6]. Everything nowadays is done for the show management, not for the exhibitors. The only other ones to get anything out of trade shows are the hotels and the prostitutes [7].
The controversy appears to center around the inability of many firms to measure quantifiably the return on their trade show investment. The problem differs across industries and depends on whether actual selling is permitted at the show. The problem is greatest at nonselling shows featuring complex products for which the buying decision usually involves several people. The buying process for these products could take many months, during 249 0019-8501/92/$5.00
Increase the return on trade shows. which the role that a trade show played in the purchase decision could be overlooked. The inability of many companies to relate future sales back to the source of initial customer interest further compounds the problem. Despite confusion about the value of trade shows, they appear to be an important part of the promotion mix. A study by Parasuraman [8] on the relative importance of various promotional media placed the importance of trade shows as an information source in the industrial buying process just behind personal selling and ahead of direct mail promotion and print advertising. Firms are estimated to allocate 5--35% (average, 11%) of their annual advertising and sales promotion budgets for trade shows [7, 93. A study by Dun and Bradstreet of 125 executives found that 60% felt trade shows were effective and satisfactory, 23% felt they were very effective, and only 17% felt they were not effective, but 70% had no accurate evaluation of the return on their trade show investments
[lOI. RATIONALE
FOR PARTICIPATION
A trade show provides a variety of promotional opportunities in one place to reach an audience with a distinct interest in the market and the products being displayed. It allows companies to simultaneously utilize all of the marketing communications tools available to them to promote both the physical and nonphysical characteristics of their products. With proper planning and execution of activities relating to a show, a company can deliver its message to key representatives of existing and potential customers and greatly enhance its image as well as that of its products in a relatively short period of time. As one chief executive observed,
C. M. SASHI is Assistant Professor of Marketing
at Florida
Atlantic University. JIM PERRETTY is President of Integrated Marketing Communications, Inc., a marketing communications firm that provides business-to-business advertising, public relations, trade show, and collateral services.
250
In no other medium will all other elements come together. Advertising, publicity, sales promotion, product demonstrations, sales staff, key management, present and potential customers and many other elements join together in a live, multi-dimensional event. An event that offers the opportunity to impress key audience perceptions of Gould, its individual operations and product offerings [S]. Trade shows provide phases of the industrial
the opportunity to affect multiple buying process in one location.
They can create awareness in new prospects, reinforce existing customer relationships, provide product demonstrations for evaluation, establish relationships between vendors and prospects, and allow sales of products on the spot. Moriarty and Spekman [ 1 l] indicate that trade shows significantly influence industrial buying during the need recognition and vendor evaluation stages of the purchase process. Several studies have examined what kind of companies use trade shows and why. Lilien [9] indicates that although the types of products displayed at trade shows may vary, a number of characteristics make some products better candidates for trade show promotion than others. Companies that sell products that are technically complex, carried in inventory, high in sales, frequently purchased, and involve many people in the purchase decision are most likely to use trade shows as part of the promotion mix. Furthermore, the amount of spending on shows is likely to be greater if the product is early in its life cycle and has high sales, aggressive product plans, and low customer concentration. However, because companies typically tend to allocate more money for all types of promotion during these stages, these results may reflect the fact that more money is available for these activities rather than perceived trade show value. Research conducted by the Trade Show Bureau suggests several reasons why companies exhibit at trade shows [ 121. Table 1 lists some of the major reasons. Bonoma [7] suggests two additional reasons: boosting corporate morale and gathering information about competitors and their products. He argues that in some instances trade shows might assume a nonselling role in the communications mix if other tools in the mix provide sufficient customer and prospect interest. An empirical
TABLE 1 Reasons for Exhibiting at Trade Shows
Reason
Percentage of Exhibiting Firms
To generate leads/ inquiries To introduce a new product or service Because competitors are exhibiting To recruit dealers or distributors To support a sponsoring association To write orders on the exhibit floor To maintain seniority in selecting space at a trade show To maintain company image/exposure To recruit sales personnel and representatives All other reasons
87 61 28 20 12 I1 9 7 6 2
tween salespersons and customers or prospects. At a properly planned and executed show, however, the salesperson can accomplish in less than a week what might take several months to accomplish on the road, and do so at a significantly reduced cost. It is estimated that the cost of contact with a qualified prospect at a trade show is $132.91 and 0.8 follow-up calls are required to close the sale [ 15, 161. By comparison, McGraw-Hill Research [ 171 reports that salespeople make an average of 4.6 faceto-face calls at an average cost of $251.63 per call to close a sale. Most important, of the qualified buyers that stopped at a booth, an average of 91% had not been
The cost per contact is low. investigation by Kerin and Cron [ 131 confirms the selling and nonselling dimensions of trade show performance. A factor analysis of eight trade show functions indicates that they represent two underlying dimensions corresponding to the selling and nonselling roles suggested by Bonoma. Given the expense involved, both selling and nonselling aspects are likely to be used simultaneously to maximize the benefits obtained from trade show promotion. However, the personal selling aspect of the marketing mix is where trade shows provide a unique advantage. The salesperson has the opportunity to meet face-to-face with many potential buyers who are there for the express purpose of buying or getting enough information to make a buying decision. In one survey, 79% of trade show visitors claimed to have buying influence for the products being displayed, 44% said they were planning to buy those products, and 77% indicated that they were interested in what they saw at the show [3]. Trade shows offer marketing advantages not found in other media, such as “the possibility of immediate follow-up, the knowledge that the prospect is there because he is interested in the product, the fact that the show is not an interruption of other concerns, the one-to-one exposure to clients, and the opportunities for hands-on experience with materials” ]141. Although personal selling is generally considered to be the major source of information in the industrial buying process, several constraints may hamper interaction be-
visited by the exhibiting company’s salesperson in the past 12 months [3]. The keys to successful trade show participation lie in four areas: 1. setting objectives
for show participation and ensuring thorough preshow planning and promotion; 2. accurately evaluating each show where participation is planned; 3. professionally executing the show; 4. timely follow-up of leads generated by the show, along with related promotional activities.
PLANNING
SHOW ACTIVITIES
Planning for the show is a critical step because it establishes a list of the activities that must be completed in a timely manner to ensure that show participation will be successful. Failure to pay adequate attention to detail in preshow activities almost always leads to less than satisfactory results or even complete failure in achieving the desired goals. As Don Vaughn, former president of the Trade Show Bureau, succinctly emphasizes, To achieve such efficiency one must have the right product at the right show, with the right people staffing your booth. You must make a preshow effort to reach your prime prospect and a postshow system to follow up on your sales efforts. The trade show is a great marketing medium, and like all media, it must be used intelligently [ 181.
251
Introduce new products at trade shows. Despite the large investments in time and money needed to effectively participate in trade shows, it is estimated that only 56% of exhibiting firms bother to set objectives, and only 22% of exhibitors have preshow promotions [2, 121. Setting objectives makes clear the reasons for attending a show and indicates what is to be achieved. One of the specific actions that marketing executives can take to make trade show participation successful is to prepare written objectives for the overall trade show program [ 131. In formulating objectives, the needs of both exhibitor and attendees must be considered to obtain the desired results. Data compiled by the Trade Show Bureau indicate that people attend trade shows for the following reasons [ 191: 50% attend to see new products and developments; 15% attend because they have an interest in the subject area of the particular show; 10% attend to see a specific product or company; ’ 9% do so to attend technical/educational sessions at the show; 7% do so to obtain technical or product information. l
l
l
l
The objectives must be precise, quantifiable, and measurable . “We have to be there because our competition will be there” or “if we’re not there, it will look like we’re having problems” are not good objectives and are less frequently heard as information about trade shows and their effectiveness becomes available and is utilized by exhibit managers. Even an objective such as “increasing awareness by 20%,” which meets all three criteria, will be of little value unless steps are taken to determine the existing level of awareness before the show. The consequences of underestimating the value of meaningful objectives could prove fatal as far as success at a particular show is concerned and could taint future efforts. Sometimes it may be better to be conspicuous by being absent than conspicuous for lack of the right products and messages. But dropping out of a show can create other problems that must be taken into account before deciding not to participate in a show. When establishing objectives, ask the question “why are we going to the show?” Is it to introduce a new 252
product, a new upgrade program, or to prospect for new customers? The objectives can then be established in concrete terms, such as “to generate 300 qualified leads for the new product, ” “to meet with 15 of our established customers and tell them about the new upgrade program,” or “to generate 700 leads for new prospects.” Give the objectives sufficient thought to ensure that they are reasonable. If the intention is to introduce a new product, what are the chances that the new product might not be ready? Once preshow promotions are sent out, the consequences will be negative if the product is not at the show or if problems are encountered with the product during the show. The company’s position at the time of the show must also be evaluated. It is generally easier to generate interest and enthusiasm from both attendees and company personnel when a new product is being introduced. Or, attention may be focused on other aspects of the company and its products in order to generate a high level of interest. Issues that are currently “hot items” in the marketplace should be examined in conjunction with the overall show theme to see if there is an appropriate “message” that the company can adopt. Bear in mind that the underlying reason for all promotional activities is to establish conditions that will generate sales. If this is not achieved by the trade show exhibit, the desired objectives will also not be achieved. A number of factors should be considered to determine the role of the exhibit in any given show. Factors typically considered include marketing plan objectives, product life cycle stage, company image in the marketplace, and competitive influence on sales. For example, if the product has been in the market for some time and its features and benefits are well known to attendees at a show, interest in the exhibit may be stimulated by shifting emphasis to aspects such as benefits of the company’s unique service program, or its excellent past performance, longevity, and expertise in the industry. Another factor that can have a major impact on the success of an exhibit is the quality of the personnel manning the booth. Two major reasons for attending a trade show are to see product demonstrations and to gain information about various companies and/or their products.
At a typical show attendees must visit many exhibits in a limited amount of time. Booth personnel should maintain a professional atmosphere to help attract visitors into the booth. They should also be able to provide the information visitors desire. Presentations should be short and to the point and time should be reserved for answering questions. Booth personnel should also be sufficiently knowledgeable about all products being displayed in order to provide full coverage during the show. A visitor should never hear that ‘ ‘the person who covers that product is not here right now. ” If visitors walk away from a booth dissatisfied, they will not have a good image of the company and probably will not return. In addition to primary objectives, secondary objectives should be considered as well. These include enhancing corporate image, getting information on competitors, and
In evaluating the show, the exhibitor must consider whether the sponsor has the experience and expertise to ensure that everything will run smoothly, a proven record of success from previous years in the same or related industry shows, and the financial backing to provide the extensive promotions necessary to create interest in the show. If the show is new and no past performance data is available, the past performance of the sponsor becomes a major factor in the evaluation process. Other factors could include the activity in the market or markets covered by the show and the exhibitor’s need to reach that market. If it is a new market for the exhibitor, the potential benefits must be weighed against the risks involved. For existing shows the task of evaluation is made easier by referring to data from past years. However, it is im-
Variables measure trade show effectiveness. recruitment of new salespersons. The important consideration is that all objectives for the show are established and prioritized beforehand so that they receive sufficient emphasis to ensure their successful completion.
EVALUATING
TRADE SHOWS
For a trade show program to be effective, careful consideration must be given to the selection of shows in which to participate. The show selected must provide not only the potential for meeting the objectives of the exhibitor’s marketing plan but also the incentives to draw attendees. In the words of Edward Chapman [20], Keep in mind that trade shows are not created for us. We think of them as selling opportunities on neutral ground, but that’s not why they are created or why they succeed. Instead, they come into being to serve the needs of buyers. Attendees are trying to learn in the seminar program, to compare notes with peers, and to decrease investments of time and money in the purchasing process. They want to see what’s new in products or services and the companies offering them. They want to narrow down the number of potential vendors to talk with after the show. So, ultimately, think about what is being delivered to the buyer attendee. If that’s good, the show will probably prosper and so will you.
portant to understand how this data was obtained and what it really indicates. For example, does the data for show attendance include just show attendees or does it also include exhibitors? What percentage of attendees have buying influence? Are students or guests or relatives of the exhibitors included in the data? Organizations exist that provide reports of detailed and verifiable information about who visits trade shows, the markets in which they operate, and the products that interest them (see [ 121). Marketing executives should carefully consider the types of shows in which they participate, particularly in terms of attendee characteristics. Kerin and Cron [ 131 indicate that successful participation is likely only when the show attendees match the exhibitor’s target market. An examination of the factors that exhibitors consider important in evaluating a specific trade show opportunity reveals that audience-related criteria are the most important, followed by display location and show logistics [2 11. Both audience quality and audience quantity were deemed very important, with proportion of decision makers among visitors and proportion of visitors who are in the target market receiving the highest ratings. Exhibit Surveys, an organization specializing in evaluating trade show performance, suggests audience quality, audience activity, and exhibit performance as criteria for evaluating trade shows. A description of the measures
253
used by Exhibit Surveys is provided below to illustrate the variables that may be used to evaluate trade shows ]31.
Audience
Quality
Net buying influences. The percentage of the show audience who have the final say, specify, or recommend for purchase one or more of the types of products exhibited. The percentage of the audience Total buying plans. planning to buy one or more of the products displayed within 12 months after the show. Audience interest factor. The percentage of the audience at the show visiting at least 2 out of 10 exhibits from a selected group of companies exhibiting.
Audience
Activity
Average time spent at each exhibit. Calculated by dividing the average time spent at the exhibits by the average number of exhibits visited. This factor can be useful to keep in mind when planning product demonstrations and audiovisual or live marketing presentations. The average number of visitors per TraJic density. 100 square feet of exhibit space. It is calculated by multiplying the net attendance (excluding exhibitors) by the average hours spent on the exhibit floor. Exhibit Surveys feels that a density between three and five indicates a good, active show.
Exhibit Performance Potential audience. The percentage of the audience with a high interest in seeing a company’s types of products. The percentage of the potential Exhibit eficiency. audience that receives person-to-person contact at the company’s exhibit. The quality and number of Personnel pei$ormance. exhibit personnel on duty at the booth. Product interest. The percentage of booth visitors who say they are interested in seeing the company’s types of products. The percentage of an average exBuying influence. hibit’s visitors who claim buying influence for its products.
254
Buying plans. The percentage of an exhibit’s visitors who say they plan to buy the company’s products within the next 12 months. Memorability. The percentage of visitors who stop at an exhibit and remember doing so S-10 weeks after the show. Cost per visitor reached (CVR). A three-year average calculated by dividing the direct costs of exhibiting (including amortized construction costs) by the number of visitors who stop to talk to a salesperson or acquire literature, remember doing so 8- 10 weeks after the show, and indicate an interest in seeing at least one of the company’s products. Two CVRs are calculated, one based only on direct costs, and another that includes preshow promotion, personnel travel, and living and salary expenses. Top-performing exhibit. An exhibit that reaches at least 70% of its potential audience at a CVR of less than the show average. Understanding and using data of this type enables the exhibit manager to carefully evaluate each show based on qualified, objective data, and eliminates the subjective opinions of company personnel who might equate poor booth performance with poor show performance, the former possibly being a result of improper planning and execution. By analyzing this data, the exhibitor can determine the potential reach of a particular show and the applicability of its products to the audience. Evaluation of the past performance of companies exhibiting similar products may also be beneficial to a company in projecting its own probability for success. The leads generated at a trade show may be used to build a data base for future mailings as well as to evaluate past trade show performance and plan for future shows. Since prospects on the list have already inquired about the products, their interest is assumed to be valid until the prospect is fully qualified. Unfortunately, many inquiry processing systems do not possess a method to provide information about future purchases, or the system is rendered ineffective by lack of cooperation between the departments involved, salesforce turnover, or a general lack of understanding about processing systems and their potential benefits. Given the obvious value of a properly designed system, it is surprising that only half of all business marketers use such lists for direct mail campaigns [22]. Postshow follow-up is an area where more education within companies appears necessary.
5. Couretas,
CONCLUSION
Marketing
Despite prevalent confusion about the value of trade shows, they are in fact proving to be an important part of the promotion mix. However, marketing managers must evaluate the benefits of trade show participation not only on the basis of selling aspects of the show but on nonselling aspects as well. Although lack of a sure way to evaluate show results seems to be a point of contention within many companies, others indicate that this is not a problem. Proper planning, execution, and follow-up appear to be the keys to trade show success. In view of the rising costs of trade shows (and promotion in general), participation is not something that can be taken lightly or approached in a haphazard manner. Extensive evaluation of the shows themselves, detailed planning, establishment of realistic objectives and expectations, professional execution of the plan, and thorough and timely follow-up can provide relative assurance of successful trade show participation.
John, Trade Shows and the Strategic 69, 64-70
Mainstream,
6. Trade Shows are Usually a Form of Mass Hysteria, Murkering 7. Bonoma,
Business
(1984).
Zagar Says, industrial
64, 4 (1979).
Thomas
V., Get More Out of Your Trade Shows,
Business Review 61, 75-83
Harvard
(1983).
8. Parasuraman,
A., The Relative Importance of Industrial Promotional Tools, Industrial Markering Management 10, 277-28 1 (198 1).
9. Lilien,
Gary L., A Descriptive Model of the Trade Show Budgeting Process, Indusrrial Marketing Management 12, 25-29 (1983).
10. Konopacki, Allen, More Products, Competition and Companies Exhibit Dollars, Industrial Marketing 63, 71 (1978).
= More
11. Moriarty, Jr., Rowland T., and Spekman, Robert E., An Empirical Investigation of the Information Sources Used During the Industrial Buying Process, Journal of Marketing Research 21, 137-147 (1984). 12. The Exhibitor: Their Trade Show Practices, Research Report No. 19, Trade Show Bureau, East Orleans, Massachusetts, 1983. 13. Kerin, Roger A., and Cron, William L., Assessing Trade Show Functions and Performance: An Exploratory Study, Journal of Marketing 51, 8794 (1987). 14. Galginaitis, Carol, Trade Shows Exhibit Some Promise, Adverrising Age 51, s14-~15 (June 9, 1980). 15. Trade Shows Continue to Reach Prospects Less Expensively than Personal Sales Calls, Research Report No. 2070, Trade Show Bureau, East Orleans, Massachusetts, 1988. 16. Number of Calls to Close a Trade Show Lead, Research Report No. 18, Trade Show Bureau, East Orleans, Massachusetts, 1983. 17. McGraw-Hill
REFERENCES
Research,
LAP Report No. 8052.4.
18. Zagar Didn’t Estimate Trade Show Objectives, 1. Trade Show Industry Growth 1972-1981, Projected Growth 1981-1991, Research Report No. 17, Trade Show Bureau, East Orleans, Massachusetts, 1983. 2. Mee, William W., Trade Shows: Here to Stay-Are Associarion
Managemenr,
They in Your Future?
SO-56 (1988).
3. Swandby,
Richard K., Cox, Jonathan M., and Sequeira, Ian K., Trade Shows Poised for 1990s Growth, Business Marker@ 7.5, 46-52 (1990).
4. Mazze,
Edward M., Trade Shows in Black and White: A Guide For Trade Show Bureau, New Canaan, Connecticut, 1986.
Marketers.
Indusrrial Marketing
64,
17 (1979).
19. The Trade Show Audience, New Canaan, Connecticut,
Research Report No. 3, Trade Show Bureau, 1979.
20. Chapman, Edward A., ExhibitMarketing: McGraw-Hill, New York, 1987.
A Survival GuideforManagers.
21. Trade Show Selection Criteria, Research Report No. 23, Trade Show Bureau, New Canaan, Connecticut, 1984. 22
Bly, Robert W., The 12 Most Common Direct Mail Mistakes. How to Avoid Them, Business Marketing 72, 122-128 (1987).
And
255
While all elements within the communication program are vital, perhaps only the exhibition will involve all disci-
INTRODUCTION Like most business expenses today, the cost of exhibiting at trade shows continues to go up. A question troubling many companies is whether these shows are worth the expense. Trade shows are big business. In 1983 the Trade Show Bureau reported that more than 9 1,000 firms spent $7 billion to display their wares to more than 31 million prospective buyers at 8,000 trade shows [I]. The number of trade shows held annually more than doubled between 1978 and 1988, increasing from about 4500 to more than 9000. Individual shows have grown in size, with exhibit space increasing by an average of 8% each year from 1974 to 1984, and the number of new exhibitors has increased at an average annual rate of more than 5% [2]. In 1989 professional attendance increased 3.3%, net square feet of space sold increased 5.3%, and the number of exhibiting companies was up 4.9% [3]. More than Address correspondence to C. M. Sashi. Dept. of Marketing, lantic University, P.O. Box 3091, Boca Raton. FL 3343 I-0991.
Industrial
0
Marketing
Management
145,000 firms were expected to participate in trade shows in 1991 [4]. Over the years a controversy has persisted about the value of trade shows. Emotions span a spectrum from full enthusiasm about participation to complete disillusionment, as illustrated by these comments:
21,
249-255
(1992)
Elsevier Science Publishing Co., Inc., 1992 655 Avenue of the Americas. New York, NY 10010
Florida At-
plines, and will present the greatest opportunity Gould as a total company [5].
to present
Trade shows are usually a form of mass hysteria. It is a foregone conclusion that they are very expensive. Even though there may be thousands of visitors, there are also thousands of exhibits. The retention factor is very debatable. . . every time we exhibit at a trade show, our conclusion is “never again” [6]. Everything nowadays is done for the show management, not for the exhibitors. The only other ones to get anything out of trade shows are the hotels and the prostitutes [7].
The controversy appears to center around the inability of many firms to measure quantifiably the return on their trade show investment. The problem differs across industries and depends on whether actual selling is permitted at the show. The problem is greatest at nonselling shows featuring complex products for which the buying decision usually involves several people. The buying process for these products could take many months, during 249 0019-8501/92/$5.00
Increase the return on trade shows. which the role that a trade show played in the purchase decision could be overlooked. The inability of many companies to relate future sales back to the source of initial customer interest further compounds the problem. Despite confusion about the value of trade shows, they appear to be an important part of the promotion mix. A study by Parasuraman [8] on the relative importance of various promotional media placed the importance of trade shows as an information source in the industrial buying process just behind personal selling and ahead of direct mail promotion and print advertising. Firms are estimated to allocate 5--35% (average, 11%) of their annual advertising and sales promotion budgets for trade shows [7, 93. A study by Dun and Bradstreet of 125 executives found that 60% felt trade shows were effective and satisfactory, 23% felt they were very effective, and only 17% felt they were not effective, but 70% had no accurate evaluation of the return on their trade show investments
[lOI. RATIONALE
FOR PARTICIPATION
A trade show provides a variety of promotional opportunities in one place to reach an audience with a distinct interest in the market and the products being displayed. It allows companies to simultaneously utilize all of the marketing communications tools available to them to promote both the physical and nonphysical characteristics of their products. With proper planning and execution of activities relating to a show, a company can deliver its message to key representatives of existing and potential customers and greatly enhance its image as well as that of its products in a relatively short period of time. As one chief executive observed,
C. M. SASHI is Assistant Professor of Marketing
at Florida
Atlantic University. JIM PERRETTY is President of Integrated Marketing Communications, Inc., a marketing communications firm that provides business-to-business advertising, public relations, trade show, and collateral services.
250
In no other medium will all other elements come together. Advertising, publicity, sales promotion, product demonstrations, sales staff, key management, present and potential customers and many other elements join together in a live, multi-dimensional event. An event that offers the opportunity to impress key audience perceptions of Gould, its individual operations and product offerings [S]. Trade shows provide phases of the industrial
the opportunity to affect multiple buying process in one location.
They can create awareness in new prospects, reinforce existing customer relationships, provide product demonstrations for evaluation, establish relationships between vendors and prospects, and allow sales of products on the spot. Moriarty and Spekman [ 1 l] indicate that trade shows significantly influence industrial buying during the need recognition and vendor evaluation stages of the purchase process. Several studies have examined what kind of companies use trade shows and why. Lilien [9] indicates that although the types of products displayed at trade shows may vary, a number of characteristics make some products better candidates for trade show promotion than others. Companies that sell products that are technically complex, carried in inventory, high in sales, frequently purchased, and involve many people in the purchase decision are most likely to use trade shows as part of the promotion mix. Furthermore, the amount of spending on shows is likely to be greater if the product is early in its life cycle and has high sales, aggressive product plans, and low customer concentration. However, because companies typically tend to allocate more money for all types of promotion during these stages, these results may reflect the fact that more money is available for these activities rather than perceived trade show value. Research conducted by the Trade Show Bureau suggests several reasons why companies exhibit at trade shows [ 121. Table 1 lists some of the major reasons. Bonoma [7] suggests two additional reasons: boosting corporate morale and gathering information about competitors and their products. He argues that in some instances trade shows might assume a nonselling role in the communications mix if other tools in the mix provide sufficient customer and prospect interest. An empirical
TABLE 1 Reasons for Exhibiting at Trade Shows
Reason
Percentage of Exhibiting Firms
To generate leads/ inquiries To introduce a new product or service Because competitors are exhibiting To recruit dealers or distributors To support a sponsoring association To write orders on the exhibit floor To maintain seniority in selecting space at a trade show To maintain company image/exposure To recruit sales personnel and representatives All other reasons
87 61 28 20 12 I1 9 7 6 2
tween salespersons and customers or prospects. At a properly planned and executed show, however, the salesperson can accomplish in less than a week what might take several months to accomplish on the road, and do so at a significantly reduced cost. It is estimated that the cost of contact with a qualified prospect at a trade show is $132.91 and 0.8 follow-up calls are required to close the sale [ 15, 161. By comparison, McGraw-Hill Research [ 171 reports that salespeople make an average of 4.6 faceto-face calls at an average cost of $251.63 per call to close a sale. Most important, of the qualified buyers that stopped at a booth, an average of 91% had not been
The cost per contact is low. investigation by Kerin and Cron [ 131 confirms the selling and nonselling dimensions of trade show performance. A factor analysis of eight trade show functions indicates that they represent two underlying dimensions corresponding to the selling and nonselling roles suggested by Bonoma. Given the expense involved, both selling and nonselling aspects are likely to be used simultaneously to maximize the benefits obtained from trade show promotion. However, the personal selling aspect of the marketing mix is where trade shows provide a unique advantage. The salesperson has the opportunity to meet face-to-face with many potential buyers who are there for the express purpose of buying or getting enough information to make a buying decision. In one survey, 79% of trade show visitors claimed to have buying influence for the products being displayed, 44% said they were planning to buy those products, and 77% indicated that they were interested in what they saw at the show [3]. Trade shows offer marketing advantages not found in other media, such as “the possibility of immediate follow-up, the knowledge that the prospect is there because he is interested in the product, the fact that the show is not an interruption of other concerns, the one-to-one exposure to clients, and the opportunities for hands-on experience with materials” ]141. Although personal selling is generally considered to be the major source of information in the industrial buying process, several constraints may hamper interaction be-
visited by the exhibiting company’s salesperson in the past 12 months [3]. The keys to successful trade show participation lie in four areas: 1. setting objectives
for show participation and ensuring thorough preshow planning and promotion; 2. accurately evaluating each show where participation is planned; 3. professionally executing the show; 4. timely follow-up of leads generated by the show, along with related promotional activities.
PLANNING
SHOW ACTIVITIES
Planning for the show is a critical step because it establishes a list of the activities that must be completed in a timely manner to ensure that show participation will be successful. Failure to pay adequate attention to detail in preshow activities almost always leads to less than satisfactory results or even complete failure in achieving the desired goals. As Don Vaughn, former president of the Trade Show Bureau, succinctly emphasizes, To achieve such efficiency one must have the right product at the right show, with the right people staffing your booth. You must make a preshow effort to reach your prime prospect and a postshow system to follow up on your sales efforts. The trade show is a great marketing medium, and like all media, it must be used intelligently [ 181.
251
Introduce new products at trade shows. Despite the large investments in time and money needed to effectively participate in trade shows, it is estimated that only 56% of exhibiting firms bother to set objectives, and only 22% of exhibitors have preshow promotions [2, 121. Setting objectives makes clear the reasons for attending a show and indicates what is to be achieved. One of the specific actions that marketing executives can take to make trade show participation successful is to prepare written objectives for the overall trade show program [ 131. In formulating objectives, the needs of both exhibitor and attendees must be considered to obtain the desired results. Data compiled by the Trade Show Bureau indicate that people attend trade shows for the following reasons [ 191: 50% attend to see new products and developments; 15% attend because they have an interest in the subject area of the particular show; 10% attend to see a specific product or company; ’ 9% do so to attend technical/educational sessions at the show; 7% do so to obtain technical or product information. l
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The objectives must be precise, quantifiable, and measurable . “We have to be there because our competition will be there” or “if we’re not there, it will look like we’re having problems” are not good objectives and are less frequently heard as information about trade shows and their effectiveness becomes available and is utilized by exhibit managers. Even an objective such as “increasing awareness by 20%,” which meets all three criteria, will be of little value unless steps are taken to determine the existing level of awareness before the show. The consequences of underestimating the value of meaningful objectives could prove fatal as far as success at a particular show is concerned and could taint future efforts. Sometimes it may be better to be conspicuous by being absent than conspicuous for lack of the right products and messages. But dropping out of a show can create other problems that must be taken into account before deciding not to participate in a show. When establishing objectives, ask the question “why are we going to the show?” Is it to introduce a new 252
product, a new upgrade program, or to prospect for new customers? The objectives can then be established in concrete terms, such as “to generate 300 qualified leads for the new product, ” “to meet with 15 of our established customers and tell them about the new upgrade program,” or “to generate 700 leads for new prospects.” Give the objectives sufficient thought to ensure that they are reasonable. If the intention is to introduce a new product, what are the chances that the new product might not be ready? Once preshow promotions are sent out, the consequences will be negative if the product is not at the show or if problems are encountered with the product during the show. The company’s position at the time of the show must also be evaluated. It is generally easier to generate interest and enthusiasm from both attendees and company personnel when a new product is being introduced. Or, attention may be focused on other aspects of the company and its products in order to generate a high level of interest. Issues that are currently “hot items” in the marketplace should be examined in conjunction with the overall show theme to see if there is an appropriate “message” that the company can adopt. Bear in mind that the underlying reason for all promotional activities is to establish conditions that will generate sales. If this is not achieved by the trade show exhibit, the desired objectives will also not be achieved. A number of factors should be considered to determine the role of the exhibit in any given show. Factors typically considered include marketing plan objectives, product life cycle stage, company image in the marketplace, and competitive influence on sales. For example, if the product has been in the market for some time and its features and benefits are well known to attendees at a show, interest in the exhibit may be stimulated by shifting emphasis to aspects such as benefits of the company’s unique service program, or its excellent past performance, longevity, and expertise in the industry. Another factor that can have a major impact on the success of an exhibit is the quality of the personnel manning the booth. Two major reasons for attending a trade show are to see product demonstrations and to gain information about various companies and/or their products.
At a typical show attendees must visit many exhibits in a limited amount of time. Booth personnel should maintain a professional atmosphere to help attract visitors into the booth. They should also be able to provide the information visitors desire. Presentations should be short and to the point and time should be reserved for answering questions. Booth personnel should also be sufficiently knowledgeable about all products being displayed in order to provide full coverage during the show. A visitor should never hear that ‘ ‘the person who covers that product is not here right now. ” If visitors walk away from a booth dissatisfied, they will not have a good image of the company and probably will not return. In addition to primary objectives, secondary objectives should be considered as well. These include enhancing corporate image, getting information on competitors, and
In evaluating the show, the exhibitor must consider whether the sponsor has the experience and expertise to ensure that everything will run smoothly, a proven record of success from previous years in the same or related industry shows, and the financial backing to provide the extensive promotions necessary to create interest in the show. If the show is new and no past performance data is available, the past performance of the sponsor becomes a major factor in the evaluation process. Other factors could include the activity in the market or markets covered by the show and the exhibitor’s need to reach that market. If it is a new market for the exhibitor, the potential benefits must be weighed against the risks involved. For existing shows the task of evaluation is made easier by referring to data from past years. However, it is im-
Variables measure trade show effectiveness. recruitment of new salespersons. The important consideration is that all objectives for the show are established and prioritized beforehand so that they receive sufficient emphasis to ensure their successful completion.
EVALUATING
TRADE SHOWS
For a trade show program to be effective, careful consideration must be given to the selection of shows in which to participate. The show selected must provide not only the potential for meeting the objectives of the exhibitor’s marketing plan but also the incentives to draw attendees. In the words of Edward Chapman [20], Keep in mind that trade shows are not created for us. We think of them as selling opportunities on neutral ground, but that’s not why they are created or why they succeed. Instead, they come into being to serve the needs of buyers. Attendees are trying to learn in the seminar program, to compare notes with peers, and to decrease investments of time and money in the purchasing process. They want to see what’s new in products or services and the companies offering them. They want to narrow down the number of potential vendors to talk with after the show. So, ultimately, think about what is being delivered to the buyer attendee. If that’s good, the show will probably prosper and so will you.
portant to understand how this data was obtained and what it really indicates. For example, does the data for show attendance include just show attendees or does it also include exhibitors? What percentage of attendees have buying influence? Are students or guests or relatives of the exhibitors included in the data? Organizations exist that provide reports of detailed and verifiable information about who visits trade shows, the markets in which they operate, and the products that interest them (see [ 121). Marketing executives should carefully consider the types of shows in which they participate, particularly in terms of attendee characteristics. Kerin and Cron [ 131 indicate that successful participation is likely only when the show attendees match the exhibitor’s target market. An examination of the factors that exhibitors consider important in evaluating a specific trade show opportunity reveals that audience-related criteria are the most important, followed by display location and show logistics [2 11. Both audience quality and audience quantity were deemed very important, with proportion of decision makers among visitors and proportion of visitors who are in the target market receiving the highest ratings. Exhibit Surveys, an organization specializing in evaluating trade show performance, suggests audience quality, audience activity, and exhibit performance as criteria for evaluating trade shows. A description of the measures
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used by Exhibit Surveys is provided below to illustrate the variables that may be used to evaluate trade shows ]31.
Audience
Quality
Net buying influences. The percentage of the show audience who have the final say, specify, or recommend for purchase one or more of the types of products exhibited. The percentage of the audience Total buying plans. planning to buy one or more of the products displayed within 12 months after the show. Audience interest factor. The percentage of the audience at the show visiting at least 2 out of 10 exhibits from a selected group of companies exhibiting.
Audience
Activity
Average time spent at each exhibit. Calculated by dividing the average time spent at the exhibits by the average number of exhibits visited. This factor can be useful to keep in mind when planning product demonstrations and audiovisual or live marketing presentations. The average number of visitors per TraJic density. 100 square feet of exhibit space. It is calculated by multiplying the net attendance (excluding exhibitors) by the average hours spent on the exhibit floor. Exhibit Surveys feels that a density between three and five indicates a good, active show.
Exhibit Performance Potential audience. The percentage of the audience with a high interest in seeing a company’s types of products. The percentage of the potential Exhibit eficiency. audience that receives person-to-person contact at the company’s exhibit. The quality and number of Personnel pei$ormance. exhibit personnel on duty at the booth. Product interest. The percentage of booth visitors who say they are interested in seeing the company’s types of products. The percentage of an average exBuying influence. hibit’s visitors who claim buying influence for its products.
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Buying plans. The percentage of an exhibit’s visitors who say they plan to buy the company’s products within the next 12 months. Memorability. The percentage of visitors who stop at an exhibit and remember doing so S-10 weeks after the show. Cost per visitor reached (CVR). A three-year average calculated by dividing the direct costs of exhibiting (including amortized construction costs) by the number of visitors who stop to talk to a salesperson or acquire literature, remember doing so 8- 10 weeks after the show, and indicate an interest in seeing at least one of the company’s products. Two CVRs are calculated, one based only on direct costs, and another that includes preshow promotion, personnel travel, and living and salary expenses. Top-performing exhibit. An exhibit that reaches at least 70% of its potential audience at a CVR of less than the show average. Understanding and using data of this type enables the exhibit manager to carefully evaluate each show based on qualified, objective data, and eliminates the subjective opinions of company personnel who might equate poor booth performance with poor show performance, the former possibly being a result of improper planning and execution. By analyzing this data, the exhibitor can determine the potential reach of a particular show and the applicability of its products to the audience. Evaluation of the past performance of companies exhibiting similar products may also be beneficial to a company in projecting its own probability for success. The leads generated at a trade show may be used to build a data base for future mailings as well as to evaluate past trade show performance and plan for future shows. Since prospects on the list have already inquired about the products, their interest is assumed to be valid until the prospect is fully qualified. Unfortunately, many inquiry processing systems do not possess a method to provide information about future purchases, or the system is rendered ineffective by lack of cooperation between the departments involved, salesforce turnover, or a general lack of understanding about processing systems and their potential benefits. Given the obvious value of a properly designed system, it is surprising that only half of all business marketers use such lists for direct mail campaigns [22]. Postshow follow-up is an area where more education within companies appears necessary.
5. Couretas,
CONCLUSION
Marketing
Despite prevalent confusion about the value of trade shows, they are in fact proving to be an important part of the promotion mix. However, marketing managers must evaluate the benefits of trade show participation not only on the basis of selling aspects of the show but on nonselling aspects as well. Although lack of a sure way to evaluate show results seems to be a point of contention within many companies, others indicate that this is not a problem. Proper planning, execution, and follow-up appear to be the keys to trade show success. In view of the rising costs of trade shows (and promotion in general), participation is not something that can be taken lightly or approached in a haphazard manner. Extensive evaluation of the shows themselves, detailed planning, establishment of realistic objectives and expectations, professional execution of the plan, and thorough and timely follow-up can provide relative assurance of successful trade show participation.
John, Trade Shows and the Strategic 69, 64-70
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