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1 BtoB Research Insights : Measuring the Value of Face-to-Face Events White Paper Summary Measurement of Return on Investment (ROI) is incomplete and unsatisfactory for marketing channels and face-to-face events, according to the July 2012 survey conducted by BtoB Magazine and Global Experience Specialists (GES). Several key metrics are rarely tracked, being displaced by non-roi metrics. We explain which metrics receive the greatest attention, which don t, and which roadblocks prevent effective measurement. We also show where event marketing channel integration is focused. We offer recommendations to counter the issues identified so marketers can regain control of their event spend and measure the value of the channels used to develop and increase sales.
2 1 Measuring the Value of Face-to-Face Events Why Read This Report? Executives and organizations track Return on Investment (ROI) as a measure of progress and productivity, and this metric has been discussed and debated in marketing and sales circles for decades. So, have we made any progress? And what effect, if any, has social media and marketing brought to the marketplace? Face-toface marketing continues to show signs of health and value-added impact. According to the recent CEIR Index, a metric created by the Center for Exhibition Industry Research, net square feet should expand annually by 3.2% through 2014, attendance by 3.3% annually, and revenues by 3.2% annually. Moreover, BtoB s research shows that event budgets are rising, and more so than any other channel except online. Because events require significant expenditures, more than any other channel (39% of marketing budgets in 2011 according to CEIR research), C-suite executives and marketers are asking for greater scrutiny about marketing effectiveness. But is that scrutiny paying off in effective ROI? The fact is, marketers only partially measure event ROI. While they are intent on measuring such key metrics as qualified leads and conversion rates, they do not usually track the cost per lead, total business developed by channel, or changes in cycle time for sales. They also report a number of obstacles to gaining accurate ROI measurement. In many cases, the barrier comes from poor infrastructure or data. In others, respondents unequivocally blame sales. On the plus side, they are intent on continuing to measure their live event results, aided by a strong degree of integration with other marketing channels. This report offers a picture of the state of face-to-face event marketing, with an analysis of needs, considerations for charting future challenges, and suggestions for future success. Marketing Channels that Benefit Most from Metrics Figure 1 31% 24% Events: The Search for Measurement However they choose to measure it, survey respondents are convinced that a firm grasp on performance metrics provides a view of liveevent success or failure. In fact, of the variety of marketing channels available to them, only marketing is viewed as benefitting more from metrics than face-to-face events, followed by the website and direct marketing (see Figure 1). While metrics such as key performance indicators (KPIs) and ROI benefit any marketing effort, the general view of poll respondents is that gaining insights into pre-, during- and post-show live events, reviewing them and adjusting future exhibiting opportunities accordingly is valuable to their ultimate success. This is particularly significant because live events are a traditional, non-digital channel. Digital marketing today gains the lion s share of attention because of its implied ability to be measured. But marketers also view the performance of live events as measurable, more so than any other traditional channels other than marketing. The question is, are business executives satisfied with the metrics they re gaining from live events? Most (61%) are less than satisfied.
3 2 Measuring the Value of Face-to-Face Events Metrics That Matter When asked to name the top live-event metrics used by their companies, the Number of Qualified Leads was No. 1 (see Figure 2). This was followed by Conversion Rates from Lead-to-Close and the Totality of Prospective Business Gained from the Event (total value of deals). These first three metrics do relate to the data required for ROI but do not represent the full data set required to appreciate return. Most Important ROI Metric Number of qualified leads from a show Conversion rate from lead to deal closed Total prospective business (average deal size X number of deals identified) Change in customer preference for your brand or product Number of qualified leads from post show marketing Cost per lead Customer satisfaction with event Number of attendees at show Number of attendees at booth Amount of booth interaction Number of qualified leads from pre-show marketing Change in length of time from lead to deal closed Change in social media interaction Figure 2 6% 6% 5% 4% 3% 2% 2% 2% 1% 1% 22% 32% It is significant that only 5% of respondents selected Cost per Lead, which ranked sixth most important, and Change in Length of Time from Lead to Deal Closed (close rate or cycle time) garnered only 1% of respondents, generating a ranking of 12th most important out of 13 choices. These are important metrics in determining ROI, especially since Cost per Lead measures the cost to generate the leads usually calculated as total cost of the event divided by the number of qualified leads. While we can t know why these metrics rank so low, these rankings do merit concern. If the barriers marketers face prevent them from gathering this data, then the focus becomes how to remove the barriers. This could involve developing improved relations with finance, who should favor efforts to better understand the return on marketing investment. Several other barriers can be overcome to make the collection of ROI data easier. One may involve the definition of qualified lead, which should be developed clearly in collaboration with sales and marketing. Conversion Rate or Close Rate may involve a long-term proposition for most b-to-b companies. Generally, responders to CEIR s research indicate that nine months is the average time allowed for the sale to count against a show. Longer sales cycle products may require a different definition. That said, sales, marketing and finance can discuss and agree on actions taken within 6-12 weeks of show close that contributed to the advance of a sale. Attributing leads to accurate motivating channels also requires collaboration and agreement across marketing and sales. Reasonable tests of attribution may be established to provide evidence from the prospect s perspective. In any case, collaboration across b-to-b organizations leads to improved results because these questions get answered.
4 3 Measuring the Value of Face-to-Face Events Are Respondents Satisfied with Their Metrics? The issue is underscored by lukewarm satisfaction with the metrics they re using in evaluating the performance of their live events. Respondents provided decidedly mixed responses (see Figure 3). Most prominent are the 44% who responded noncommittally an answer that might be characterized as, It s neither bad nor good. In contrast, only 8% have a high level of satisfaction with the metrics they re using to measure live-event ROI. Satisfaction with ROI Metric 31% Marketers increasingly are on the spot to demonstrate event ROI, but are uncertain that they can provide it. Some of the reasons for ambivalence can be found in the roadblocks they encounter in the process. 8% Roadblocks in the Way What s standing in the way of organizations achieving effective event metrics, and determining the ROI of the face-to-face channel? There are a number of factors that respondents cite (see Figure 4), but they can be combined into two main concerns: One, a lack of alignment and cooperation with the sales side (38%); and two, a lack of data and resources to help get the job done (51%). While each company will experience different levels of concern and roadblocks, marketers are facing structural barriers that can be addressed and broken down. In particular, the value that marketing brings to revenue generation and sales success must be stressed, refined and demonstrated. Identifying barriers to event ROI success is a first step. Breaking down those barriers more importantly, breaking down barriers to marketing-sales alignment, demonstrable revenue production, and infrastructural insufficiencies is an exercise in collaboration, analysis and problem solving that is inherently achievable. One pathway lies in event integration with other marketing channels. Obstacles to ROI Measurement Figure 4 Lack of data support from sales Poor infrastructure to collect and analyze data within marketing Inability to track the key measures required No follow-up on sales from face-to-face leads No measurements seem to tie back to actual performance C-suite sees marketing as an expense only Contention with sales Lack of data from marketing Lack of data/support from finance Executives/upper management see no value in ROI management Figure 3 4% 3% 2% 1% 1% 13% 17% 24% 21%
5 4 Measuring the Value of Face-to-Face Events Developing an Integrated Approach According to the BtoB/GES study, executives overwhelmingly (84%) say their face-to-face events are being integrated with other channels in the marketing mix. And while 40% of marketers are equivocal about their success in achieving integration fully, 47% report they are satisfied or extremely satisfied with the integration process (see Figure 5). Success at Integrating Face-to-Face Events with Other Marketing Channels 41% More extensive integration with face-to-face events occur in the channels perceived to deliver the greater value, and is the most integrated channel with 70% indicating very high or high degrees of integration. Website followed with 57%, and direct marketing garnered 51% of respondents with these high levels. Only 40% pointed to strong integration between live events and social media at this stage of adoption. Print advertising s next-to-last place ranking with 33% reflects either it s poor perception in coordination with events, its greater cost, or both. In any case, integrating live events with these other channels, respondents said, provides a strong pathway toward realizing some of the event benefits they are seeking. Figure 5 10% Integration: What Works Best In the process of integrating face-to-face events with other channels, marketers say that a close melding of events with is most valuable (see Figure 6). Research by CEIR shows that 87% of corporate responders use marketing in association with exhibitions, a 10% margin over online advertising, and a 51% margin over social media. The website also is key as a source of important event information and registration, with direct marketing, social media, print ads and mobile marketing also playing a role. Value by Channel of Integrating with Face-to-face Events Even in an age focused on all things digital, it is 72% significant that direct marketing integration with events is viewed as so valuable. With crowded 56% inboxes, and new approaches to well-designed, welltargeted direct marketing, it s clear this channel has 50% a lot of life left as a complementary channel. Social media and mobile come in for special mention with 41% and respectively. This level of value probably reflects the testing many companies are currently conducting to better understand the Figure 6 (Top 2 box responses) 31% 41%
6 5 Measuring the Value of Face-to-Face Events contribution of these channels. Certainly this also demonstrates there is room for growth as these tools become more widely proven and established. Social and mobile integration will only increase in value and importance to face-to-face events in the coming years. Benefits of Integration Integration of face-to-face events with other marketing channels is intimately tied to event ROI, according to the BtoB/GES study (see Figure 7). When asked what advantages marketing integration brings to live events, nurturing customer relationships is respondents No. 1 pick, followed by increased attendance, better brand recognition, more effective messaging, increased profitability, brand credibility and competitiveness. Consider these benefits of marketing integration with respondents most desired event ROI metrics, addressed earlier in this report: Most Important Advantage of Integrating Face-to-Face Events in Marketing Mix Opportunity to nurture customer relationships Increased attendance Increased brand recognition Increased messaging effectiveness Increased profitability Increased brand credibility Increased competitive advantage Figure 7 7% 6% 8% 13% 15% 25% 27% Nurturing customer relationships directly supports customer satisfaction and booth traffic. When upand cross-selling imperatives are considered, it also can produce more qualified leads, conversions, total prospective business, reasonable cost per lead, shorter sales cycles, etc. Increased attendance supports booth traffic, social media interaction and customer preference for brand. Increased brand recognition supports many of these same ROI metrics, including most prominently qualified leads, conversion rates and total prospective business. In summation, the findings from this study demonstrate that: 1. Respondents are eager to measure event performance and ROI, but their capabilities to collect, analyze, and apply the metrics do not support measurement to the extent needed. 2. Barriers with other parts of their organizations limit the application of consistent definitions and criteria for leads and the application of any findings from ROI or integration to improve company performance. 3. Integration of face-to-face events with other channels can be viewed as one key solution adding value among many. Last, and certainly not least, marketers must fight to justify their work, the budgets they command and their contribution to revenue production. More than ever, they are compelled to find true not subjective ROI in the marketing channels they pursue. With face-to-face events seen as indispensable to the modern marketing channel arsenal, the pressure is on to go beyond fuzzy metrics and find those measurements that return more accurate performance indicators. This study identified some of the metrics organizations find most useful in that effort.
7 6 Measuring the Value of Face-to-Face Events RECOMMENDATIONS Break down barriers. Most obstacles to strong event ROI constitute internal operational and communication disconnects. Most companies suffer from a black hole between the sales and marketing functions, producing event leads that are never pursued. There are many solutions here, entailing commitment from both sides. From the sales-marketing standpoint, this structural problem can be addressed and solved only by collaboration with and commitments from both sides. A passionate sales leader one who understands marketing s strategies to begin with is essential to in-booth success. This sales leader must show by example the importance of the event, and lead a committed cadre of booth personnel in engaging with traffic and parsing qualified leads for further nurturing. Similar collaboration with finance also yields benefits in the form of access to key data such as sales results, costs, and calculating ROI. Integrate live events with all marketing channels. Integration of live events with other channels is critical, in particular with companies that are running lean in today s tight economy. It is clear from this study s findings that integrating face-to-face events with all other marketing initiatives leads to stronger benefits and reaching organizational objectives for these events. , website and direct marketing are particularly valuable, established marketing channels, with their integration with face-to-face events augmenting the live-event experience. Social media and Mobile marketing show promise as organizations learn more about customer preferences for communications about face-to-face events, when each channel is best deployed, and how success is best measured. Pre-show, during and post-show marketing. Too often the objectives a company hopes to obtain at a particular show are given scant attention: What are the most strategic shows to attend, who are the most relevant booth visitors to attract, what valuable customers or prospects might be in attendance, what do those attendees need, and what will the company do to enhance their relationships with this targeted audience? During the show, booth personnel may (often should) be augmented by engineers and marketing staff who can address specific needs and overarching customer needs. Speaking engagements for staff or (importantly) customers during trade show education sessions is an excellent branding and leadgeneration activity. An audit of customers and booth visitors at the booths of competitor exhibitors can provide keen insight into products, marketing techniques and opportunities for event improvement. And concurrent or after-hours events are excellent customer-relations and lead-gen opportunities. These work especially well with select customers and prospects. After the event, marketing activities add the most value through further qualifying leads or follow-up on conversations held in the booth. In collaboration with sales, lead-scoring adds value by validating lead
8 7 Measuring the Value of Face-to-Face Events quality based on agreed-upon criteria. Leads that are not qualified should immediately return to the lead generation funnel or be groomed by marketing until they have expressed a more urgent demand to buy. Educational sessions, more in-depth demonstrations or solutions, and similar local events offer critical follow-up opportunities to advance the discussion. Rethink the approach to metrics. Focus on four or five metrics that matter the most, such as lead generation, conversions, comparative performance, or cost per lead and the next 10 will take care of themselves. Leverage events for research. Face-to-face events are valuable for many reasons, not the least of which is their value in providing real-time research data. Leveraging this opportunity in events improves not only market awareness and lead quality, but also enhances future campaigns, product development and next year s events. METHODOLOGY Measuring the Value of Face-to-Face Events is based on an online survey of 247 marketing professionals and other executives during May and June Nearly half of the respondents (47%) had such titles as director or manager of marketing/product/communications, with large proportions being exec VP, senior VP or VP of marketing/products/communications, CEOs, CMOs and sales managers. Among the largest verticals were technology companies (26%), manufacturing (16%) and financial services (15%). Companies were fairly evenly distributed by size. Methods and procedures adhere to the standards and ethics established by the Marketing Research Association. The confidence interval was 94%, with a margin of error of +/ 6%. CONTRIBUTORS Contributors to this report include the following: John DiStefano, Research Director, BtoB: jdistefano@crain.com Christopher Hosford, East Coast Bureau Chief, BtoB: chosford@crain.com Gina McDuffie, SVP, Corporate Marketing, Global Experience Specialists: gmcduffie@ges.com Reagan Cook, Senior Marketing Analyst, Global Experience Specialists: rcook@ges.com ABOUT BtoB BtoB, dedicated to integrated business-to-business marketing, is read by 100,000 b-to-b marketers intent on acquiring strategies and tactics needed or success, including news, analysis, benchmarks and best practices. BtoB also publishes a wide variety of e-newsletters addressing specific areas of b-to-b marketing, and hosts webinars, virtual trade shows and live events. BtoB is published by Crain Communications Inc., which publishes more than 20 business, trade and consumer publications and related websites in North America, Europe and Asia. For more information visit btobonline.com or crain.com. ABOUT GES Global Experience Specialists, Inc. (GES), a Viad Corp (NYSE: VVI) company, is a leading marketing agency that produces exhibitions, events, exhibits and retail environments. GES provides a wide range of services, including turnkey official show services, cutting edge creative and design, marketing and measurement services all with an unrivaled global reach. GES partners with leading shows and brands, including the International CES, Spring Fair Birmingham, International Woodworking Fair, CONEXPO-CON/AGG and IFPE, Bell Helicopter, Genzyme, L Oreal, Warner Bros., and Simon Property Group. National Servicenter has been recognized with certification under the J.D. Power and Associates Certified Call Center Program for four consecutive years, and Ad Age has named GES a World s Top 50 Agency Company three times. For more information, visit ges.com or the GES blog at defyingconvention.ges.com.
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