Discover key considerations for exhibiting including lease/purchase, ROI, and more.
For many companies, both large and small, the decision on whether to lease or purchase a trade show exhibit hinged more-so on financial factors including total cost of ownership, cash flow and even the stage of a company’s product life cycle. This was particularly evident during the recent financial crisis as many organizations, even those that have historically owned their exhibit, made the conscious decision to leap into this type of renting scheme. As the economy continues its slow crawl from the financial doldrums that began in 2007, the anticipated switch from lease to buy has happened but to a much lesser extent. In retrospect, what is taking place is a paradigm shift in the way companies are purchasing these services. In our opinion, a large part of this shift is due to the increasing innovations in modular exhibit systems which allows for custom-looking designs using leased modular components that can integrated for any size exhibit desired. In addition but to a lesser extent, ambiguity and lack of direction from the IRS regarding Sec. 179, which allows for 100% write-offs for these type of purchases, has forced companies to delay these large purchases and subsequently led them to rent their exhibits in the interim. Post Script, the ‘Fiscal Cliff’ Bill of 2013 has since offered clear direction on the dollar limitation for 2013.
Typically, our guidance to our clients is to lease an exhibit if attending two or less shows per year. Alternatively, as depicted in Table 1 below, we recommend an outright exhibit purchase as total cost of ownership in a purchase scenario (depicted as ‘Running Cost’ below), exceeds the running cost under a leasing scheme at Tradeshow 3. In this example, Tradeshow 3 becomes the so-called break-even point where the cost to lease exceeds the cost to purchase.
The tradeshow industry has come a long way over the past 10 years in developing new and innovative durable yet lightweight materials. From extruded metal components to matrix panel systems that bring unheralded design flexibility and modularity, these light-weight yet sturdy substrates have allowed exhibiting companies to sacrifice nothing from a design perspective yet has significantly lowered overall tradeshow costs by minimizing shipping, material handling or drayage, and installment & dismantle labor. With all these innovations, we feel the next opportunity for innovation is to incorporate more digital elements to create longer engagement (see figure 1) and drive analytics. Specifically, we see two huge areas of opportunity that fall into separate yet complimentary areas that we feel needs to be part of any company’s overall tradeshow strategy (see figure 2):
1. Digitize your company or brand message / content by using more digital elements. This type of elements goes far beyond looping a company or brand video onto a monitor. Specifically, we refer to utilization of iPads, touchscreen monitors, 360° TVs, interactive floors and tables, etc. Utilizing these assets allows your visitors a better interactive customer relationship experience through their activity with the touch screens of the booth and with every touch comes analytical data that can be interpreted to allow for the sales representative to do specific follow up after the event.
2. Capturing the plethora of data that will be generated by attendees engaging in your digital content. By digitally tagging, tracking, and connecting your digital content to back-end systems (such as sales force CRM), your data now comes alive allowing your organization to measure key performance indicators such as responses to questions and surveys, time spent on each brand and valid email addresses captured.
This is a difficult yet important question that most exhibitors either simply avoid or fail to understand how to answer. For many smaller companies, a large portion of their customer interaction and sales take place at conventions. The reason is that for many companies, especially foreign-based, conventions represent one of the limited opportunities to showcase their products and meet their customers face-to-face. For these scenarios, convention revenues are a straight-forward indicator of ROI.
For a majority of companies that don’t have this convenience, they have to define and prioritize the qualitative measures required to have a meaningful ROI analysis. This process involves dialogue with key decision makers within the organization, typically those in the marketing, sales, and operations functional areas. The questions should include:
For this reason, organizations should create informal convention committees comprised of a diverse group of individuals that are knowledgeable of the company and their respective industry. In addition, we feel it is important to note that companies should also consider the motivation of the attendees in making these decisions. According to the Center for Exhibition Industry Research (CEIR), the following behavioral statistics of convention attendees include:
1. 65% come back year after year to learn “What’s New”;
2. 76% arrive with an agenda;
3. 55% come to network;
4. 53% attend for continuing education and certifications;
5. 36% are fist-time attendees;
6. 35% will share their learnings with 4-6 other people;
7. 83% buy something; and
8. 94% compare competing products.
An organization should always challenge and incentive its people and vendors to make the most efficient and productive use of its limited resources. The list below includes the usual costs and the optimal ways to manage these costs:
This paper was written by the employees of Metro Exhibits, LLC for the exclusive benefit of companies that currently exhibit at tradeshows, have recently begun to exhibit, or are in the process of determining whether they should be exhibiting. The considerations, guidance and tips we offer in this paper are no different than what we share with our very own clients. The purpose in sharing this article is to help all organizations understand what they need to know and consider in order to make informed and intelligent decisions about tradeshow spend. By sharing this information, we feel that the tradeshow industry, exhibiting companies, and all of its stakeholders will ultimately benefit.
About the Author: Metro Exhibits, LLC is a tradeshow marketing organization that provides turnkey tradeshow services including custom and rental exhibits, exhibit graphic design, digital media coordination, project management, graphics, shipping and installation and dismantle services. In addition, Metro Exhibits offers full warehousing and fulfillment services through its wholly-owned subsidiary Communications Resources Group, LLC. With facilities and redundant inventory in Northern New Jersey and Las Vegas, Metro Exhibits is positioned to offer these full capabilities with a high level of efficiency and customer service in all of the major convention areas throughout the United States. Our experienced staff of project managers, account managers, fabrication engineers, and management bring over 80 years of tradeshow experience. We strongly suggest to all exhibiting companies that they challenge their current tradeshow exhibiting vendor on innovative ways to increase the impact and ROI of resources they commit to conventions.
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