fa ce-to -fa ce m a rketin g s p ecia lis ts TRADE SHOW BUDGETING

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1 R E D C E D A R P R A N D M A R K E T I N G fa ce-to -fa ce m a rketin g s p ecia lis ts TRADE SHOW BUDGETING B a r c l a y R o a d, C h e l t e n h a m, PA t e l e p h o n e : f a x : w w w. r e d - c e d a r. c o m

2 So...you think you ve budgeted for your trade show. Start from the beginning. Many of us do not have the luxury of setting our trade show budget. It has either been handed down to us, the numbers pulled from who knows where; or, it is based on what the budget has been in the past years plus or minus 10 percent. This is rarely a realistic budget and is likely not adequate to accomplish your goals. Although it is unlikely you will be granted everything you want, this document will help you create a budget based on what you think you need to accomplish your goals and do your program justice. It will guide you through the entire program and get you away from focusing on simply the booth and promotion. This way you will find you are not heading over budget and only 30 percent completed. All budgets are subject to change. Costs relating to your trade show will vary depending on the size of your booth, the location and local labor laws. This is a guide to get you a good grasp of what the costs will be, however it is suggested that before each individual show you take a closer look at specific numbers for that particular show to create a more accurate budget. Industry cost can fluctuate year to year any where from 1-7 percent according to the Trade Show Exhibitor Association (TSEA). Don t hesitate to ask for guesstimates from suppliers. If you are starting from scratch and have no past numbers to rely on, Trade Show Week suggests two ways of coming up with a ballpark budget. 1. Figure your total trade show cost will be three times the cost of the exhibit space. For example, if your exhibit space for a show cost 3000, your total show budget will be about 9, If you are not sure what shows you will be attending and therefore, do not have definite booth space costs, you can base your assumed budget on square foot cost. The average square foot cost for exhibits is Therefore, if you are planning at 10 x 10 booth (100 square feet) your costs should be x 100 x 3, or 6,696 HOW THE EXHIBIT DOLLAR IS SPENT 21% 6% 5% 28% Exhibit Space Exhibit Design Show Services Shipping 9% 12% Travel and Entertainment Promotion 19% Other 1

3 Yes, but how much space do I need? How much exhibit space you need or want can often make the trade show simply not affordable. According to the Center for Exhibition Industry Research (CEIR) the bigger the exhibit, the better the chance of visitors remembering it. While we d all like to have a 1000 square feet of space and a two story booth, it s not going to happen. We will take the approach of figuring out what you ideally need to accomplish your goals. If your budget does not allow for the ideal, then you will need to bring your creativity into the mix to achieve your goals within your budget. Let s be realistic. Whatever show you attend it is very unlikely that every attendee will stop by your booth. It is also unlikely that every attendee is your target audience. Keep in mind, it is possible that anywhere from percent of their projected attendees of 20,000 will be other exhibitors and supplier members. Carefully review the shows demographics with the show organizer to figure out exactly what percent of the attendees are your target audience. Perhaps only 10 percent are your target. 20,000 x 10% - 2,000 target audience 10 percent may not have sounded like a good fit at first by it is not terribly likely you will have even all of these visitors stop by your booth. The number of visitors stopping by your booth varies and, over time your marketing department can measure this. This number is called the Audience Interest Factor. As a general rule of thumb this number is at about 45 percent. 2,000 (target audience from above) x 45% = 900 potential booth visitors At this point we are getting closer. You now know you need a booth that can accommodate 900 people. Fortunately you don t have to accommodate all of them at the same time. We still need a few more numbers. First, how many active show hours are there and second how much time will you spend with each visitor. We ll start with the second number because it is the easiest. On average figure each staff person will spend about 10 minutes with a visitor. Some people you meet with will be determined not qualified and will require less time and some will be your top customer and more time will be spent with them. Now, we can calculate the show hours. For the sake of easy math let s say the show is open for 8 hours for three days. This gives you 24 show hours. We know that the last couple hours of the day and lunch tends to be very lonely in the exhibit hall so we can knock off 9 hours (3 show hours x 3 days) from that total as unproductive and we are left with 15 show hours. Take your number of visitors and divide them by the show hours. 900 / 15 = 60 visitors per hour. Now we can staff up. We ve determined that on average each visitor will require 10 minutes of your staff s time. Each staff person can see talk to 6 people per hour. This means we need 10 staff members in the booth at any given time. It is a general rule that each staffer needs 50 square feet of unoccupied space to work in. That means two people can carry on two conversations simultaneously in a 10 x 10 foot booth. But, for the purposes of our example, we now know that we need 500 square feet of unoccupied space. Depending on how much space is taken up by your display and products you may need 600 square feet of booth space. 2

4 Time to draft a budget Now we have that ballpark budget. Using the first option we read earlier we know that the trade show we are targeting charges 24 per square foot. Our booth space cost will be 14,400 and as we know that this is only 1/3 of the cost. The total cost for your show budget should be 43,200. You can now set the expectations of your management and the budget makers. They will see how wanting to talk to 900 visitors in a 10 x 10 booth is simply not a reasonable expectation. Below is a table with a detailed exhibit cost summary that will help you build an accurate breakdown of all the costs involved in your exhibit. This will give you a base for the perfect exhibit plan. You will have an accurate cost for all areas you need to cover for your show instead of putting too much money in one area and not enough in another. The chances of getting your budget approved the first time out of the gate is very unlikely. You must first prove a return on that investment which will make getting a more appropriate budget easier and easier each show. For arguments sake, lets say that your perfect budget, after completing the form below requires a 10,000 investment but your management says to do it for 5,000. You can now start going through line item by line item to cut 50 percent. For example, in order to reach your target number of visitors you may opt to take a smaller booth but hold a hospitality event during the show. Big complicated booths mean higher labor costs, shipping and drayage. You can reduce costs by cutting back on the complexity of your booth. You may even choose to hire professional booth staff from a local agency to reduce staff travel and accommodation charges. Carefully segmenting the attendee list for promotional purposes will reduce your printing and postage costs on pre-show mailers. EXHIBIT COST SUMMARY Cost Description Estimate Actual Subtotals Exhibit Booth Build and Design/Rental Refurbishing Crates and Packing Furnishings Storage Transportation Shipping Customs/Export License Drayage 3

5 EXHIBIT COST SUMMARY Labor Electrician Installation and Dismantle (I&D) Plumbers Riggers Unskilled labor Machine Operators Promotion Advertising Mailings Printing Postage/courier Sponsorships Premiums Talent Hotel (talent) Travel (talent) Literature Prizes/giveaways On-Site (billboards, marquees, etc.) Show Services Utilities Space Rental Furniture/carpet rental 4

6 EXHIBIT COST SUMMARY Badges Cleaning Lead-retrieval system rental Security Florist Telephone Internet Connection Ancillary Events Hospitality Suite Entertainment Event Costs Booth staff Per diem allowance Hotel Travel Ground transportation Group dinners Staff training Outside research Total Exhibit Cost Objective Cost per unit (the total exhibit cost divided by the number of units in your objective; that is, the number of leads, image impressions, web site hits, increase in traffic, etc.) 5

7 Completing your budget In order to complete your final budget you will need to record your actual costs after the show. Timing is everything as this step needs to be completed as quickly as possible in order to begin to evaluate your return on investment. Every single invoice and expense should go through you first. The last line item of your budget requires putting together the numbers for your established goals. The number of qualified leads collected, image impressions, visitors in the booth, pre, during and post show web hits, booth traffic (can be measured by give-aways handed out), etc. Now you are set to complete the final line item. Budget Management By carefully budgeting each show, you will be able to develop a thorough future show plan. You can see a side by side comparison of each show you attend and what the cost of exhibiting based on your goals actually are. Based on this information you will see what shows do not bring a return on investment and should be eliminated from your program and what shows you will want to increase your presence in because of their high potential. There are times when numbers are simply not quite enough. You may not be attending each show and will need feedback from your staff to determine what went wrong and why and what was a success and why. Your staff are the ones who can provide you with the best information. Make sure they fill out a show evaluation at the end of their final shift when their memory is at its sharpest. Also, you want to encourage them to be completely honest and they will be as long as you don t take their negative feedback personal and get defensive. POST-SHOW SURVEY Name of Show: Booth Shifts Worked (Date and Times): Section 1: Using a scale of 1 to 5, with 1 being very poor and 5 being excellent, please rate the following aspects of the show. Ranking Pre-show promotion Booth Location Show Hours Staff scheduling Booth size Booth design/graphics Technical Support Lead Collecting In-booth demonstrations 6

8 POST-SHOW SURVEY Product mix Premiums Hospitality Booth staff s performance Quality of attendees Competitor s displays Show management Show amenities Overall show program Section 2: Please comment on any of the above in detail so we can better evaluate this and future shows: Do you think we should participate in this show again? Yes No Why? What changes would you make? Do you know of other shows or events that we should attend? Yes No If yes, which ones? Any Additional Comments: 7