Trade Show Budgeting, Part 1

Written by Rick Hendershot, M.A.


Continued from page 1

Here's a rough and ready forumla for determining your expected sales:

Sales = TA (Total Attendance) x CR (Conversion Rate)

There is nothing magical about this equation. But if you look at it this way, "CR", what we callrepparttar "conversion rate" is whererepparttar 124445 action is. We've already mentioned some ofrepparttar 124446 things you have to do to enhance your CR (conversion Rate): get more people to your booth, present your product inrepparttar 124447 best light possible, have an attractive display, have persuasive product literature, have noteworthy handouts, have trained and motivated staff, etc., etc.

But here, for budgeting purposes, we simply want to take a wild guess at what your CR might be when all is said and done, or, as they say, "all other things being equal". For argument's sake, Let's say it's 1%. That means that if 1000 people attendrepparttar 124448 show, you're going to get 10 sales:

1000 x .01 = 10 Sales

In some cases this would be phenomenal (the wedding photographer). In others, it would be miserable (the widget guy). If nothing else, this should allow you to create a "Target Conversion Rate" (TCR). Once you know what your costs for a specific show are, you simply have to take those costs and figure out how many sales you need in order to recover them.

So let's say you calculate your costs for Show A are $5,000 (including a pro-rated amount forrepparttar 124449 one-time costs such asrepparttar 124450 booth). And let's say you can relatively easily calculate your "gross profit" on each sale (gross sale amount minus out-of-pocket). Let's say inrepparttar 124451 case ofrepparttar 124452 wedding photographerrepparttar 124453 gross profit margin is 50%, andrepparttar 124454 average sale is $2500.

(whirrr, buzzzz, click, kaching)

In order to recover his $5000 he will have to get 4 sales:

Breakeven number of sales (BS) = show costs (SC) / Price (P) x Gross Margin (GM)

or BS = SC / P x GM (I chose "BS" for a good reason)

or, in this case:

BS = $5000 / $2500 x .5 = 4

Stated in terms of sales per 1000 attendees, your CR in this case would be .004 or .4%.

Is it reasonable to expect a CR this high. Will you make 4 sales for every 1000 attendees at your typical show? Well that depends, n'est-ce pas? If you have 1000 warm and willing blushing-brides-to-be battering downrepparttar 124455 doors ofrepparttar 124456 show, then perhaps 4 is a conservative estimate. If you have only 200 attendees, would this make your average CR go up or down. That also depends. A smaller show may have fewer exhibitors (less competition), will have a more intimate feel about it, will give you more time with each prospective client. And, of course it will cost considerably less than a bigger show -- but probably not all that much less, when all is said and done.

And thenrepparttar 124457 other factors having a bearing onrepparttar 124458 conversion factor start becoming clear too:repparttar 124459 price of your service,repparttar 124460 attractiveness of your presentation,repparttar 124461 quality of your samples and handouts, etc., etc.

You really need more feedback on this CR thing don't you. It certainly wouldn't hurt to talk to friends and acquaintances who have trade show experience. Ask them about their success rates. Ask them how many actual sales they get from a good show. Ask them if they've ever calculated their CR --repparttar 124462 number of sales per 1000 attendees. And checkrepparttar 124463 online literature for articles about typical conversion rates at trade shows. This is a very important part of creating a trade show budget. I will be compiling some of this information, eventually, and you may find it helpful.

Putting it together...

For argument's sake, let's say that yourrepparttar 124464 wedding photographer. Your product is competitively priced, your presentation is well put together, and your product is as attractive asrepparttar 124465 next guy's. Is it reasonable to think you will get 4 sales from a show with 1000 attendees?

One would hope so. In fact, let's be a bit more aggressive. Let's target 6 sales. Let's pretend this isrepparttar 124466 point at which you will consider going through allrepparttar 124467 hassle of doingrepparttar 124468 show. Anything less is just too much bother.

That means your TCR (Target Conversion Rate) is 6 / 1000 = .006 (or .6%).

This gives you a rough and ready tool for calculatingrepparttar 124469 profitably-potential of various shows. If Show B will cost you $3000 to enter, and it has only 400 attendees, thenrepparttar 124470 formula works this way:

No. of sales expected: .006 x 400 = 2.4 (round down to 2) x $2500 x .5 = $2500 gross profit.

"EEEEHHHHHHH" (Buzzer sound). No good. You need at least $3000.

To hit that number you will need a TCR of .75% (or 7.5 sales per 1000 attendees). Sounds pretty high, doesn't it. Well, you'll never know until you try. The quality ofrepparttar 124471 attendees to this show might be higher. There may be other factors too that make you want to weight one show higher than another.

The only way you can know for sure is by trying. That will allow you to establish a track record. If you thinkrepparttar 124472 numbers almost add up, then take a stab. Go to a show or two, and when it is over do a careful analysis of your costs and returns. Then you can establish a reliable TCR -- a number you can seriously shoot for and expect to reach -- and then you're in business. Preparing a trade show budget for next year will be a piece of cake.

And of course, once you do commit to a show or two, your focus has to immediately shift to hitting (and smashing through) that Target Conversion Rate. Design a better display, have more impressive samples and portfolio books, fine tune your product, get some memorable handouts, memorize your sales pitch, take voice lessons, get a hair cut...

When copying or reproducing this article, or parts of this article, please give appropriate credits to Richard Hendershot, www.tradeshow-display-experts.com

Trade Show Tips: Creating your Trade Show Budget

Rick Hendershot is marketing manager for www.tradeshow-display-experts.com. The parent company, Canada Display Graphics, has facilities in Mississauga and Waterloo, Ontario, Canada, and ships trade show displays and custom vinyl banners across North America.


Working your Trade Show Booth

Written by Rick Hendershot, M.A.


Continued from page 1

Blow your own horn. LOUD. Make a clear and concise list of your product's benefits, and rehearse them until they are second nature to you. (Of course as an effective sales person, you should have done this already). What does your product or service do that's unique? Does it have a 100% guarantee? Will it save money inrepparttar long run? Is itrepparttar 124444 first onrepparttar 124445 market? Find that selling point and make sure it's visible to passers-bys. It should be visible in your trade show graphics. And it should be prominent in your presentation. Don't just highlight your company name; participants are coming to find that special product or service. "If they see what they're looking for initially, they're going to come to you," says Leslie.

Make your handouts standout. How many times have you seen people toting a canvas bag chock-full of brochures? This material, according Leslie, is likely to become firestarter. People tend to keep things with bulk, such as product samples, cds and other more substantial give aways. He encourages substantial novelty freebies such as yo-yos. If you're not willing to spendrepparttar 124446 money on these types of handouts, at least invest in business cards with a picture or graphic of your product onrepparttar 124447 flipside a quick reminder of what you had to offer. Cards can be filed away in pockets and wallets. Says Leslie: "That business card will last much longer than multi-colored fold-out material."

When copying or reproducing this article, or parts of this article, please give appropriate credits to Richard Hendershot, www.tradeshow-display-experts.com

Trade Show Tips: Working your trade show booth

Rick Hendershot is marketing manager for www.tradeshow-display-experts.com. The parent company, Canada Display Graphics, has facilities in Mississauga and Waterloo, Ontario, Canada, and ships trade show displays and custom vinyl banners across North America.


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