BW Online | August 9, 2000 | It's Show Time for CEOs

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AUGUST 9, 2000

MANAGEMENT

It's Show Time for CEOs
More small companies and their top execs are out strutting their stuff and looking for deals at trade shows

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In the 10 years he has been in business, Keith Schwartz, president of accessories-distribution company OTP Sales, had never been to a trade show. But when two of his major customers -- who accounted for half of his total annual revenue -- took their business elsewhere, Schwartz decided to rethink the way he markets his business. In the last month, he has gone to three trade shows and expects to pull in $1 million in sales as a result. "Trade shows are expensive, and it scared me," Schwartz says.

Like Schwartz, many small-company CEOs are increasingly looking to trade shows -- to raise their own profile, their company's visibility, or both. While greater amounts of marketing budgets are being allotted to exhibitions, it's also about time, too. "CEOs are now spending more money on these shows, and therefore they're becoming more involved as well," says Allen Konopacki, a Chicago-based trade-show consultant.

Experts say CEOs are being forced to participate at levels not previously seen to attract new customers and to keep existing ones happy as well. "It's a customer-driven activity," says Konopacki. "Customers come to a show not just to look around but to conduct business face-to-face, and they expect to see the CEOs there."

DUAL ROLE. Trade shows also afford CEOs the best opportunity to check out the competition and assess the state of business in general. "CEOs have a dual role at trade shows," says Michael Hughes, director of research services at Trade Show Week magazine. "They're trying to get closer to both the customers and the market, so they're there soaking up industry trends, networking, and assessing the market."

Analysts say part of the reason for this changing trend is the cultural shift in the nature of the role of the CEO. "Long gone is that model of the CEO away from it all in his corner office," says Hughes. And of course part of this influence hails from a new dot-com managerial style. In fact the largest single growth segment in the $100 billion exhibition industry comes from the computer and technology field. "Just keeping up with technological change is a significant reason why CEOs attend trade shows," says Hughes.

Others say CEOs are attending more shows to revive personal contact with customers. "Small companies are growing and becoming larger, and customers [feel somewhat alienated] by dealing with them online so much," says Douglas Ducate, president and CEO of the Center for Exhibition Industry Research.

Trade shows also give a CEO a unique opportunity to reach customers they might lose to the bigger players. "A trade show is often known as the great equalizer -- small companies have as much access as the big [company] when they're all there," says Ducate.

NOT JUST SELLING. For the even more forward-looking CEOs, experts say, trade shows present a chance to scout the market for potential acquisitions and partnerships. "I would say that many CEOs do participate in trade shows, but not necessarily in the booth," says trade-show consultant John Sciabarrasi, president of J.S. Lewis Associates. "The economy is strong, cash flow is good, and they're walking the floor looking for companies to buy."

The increased interest from CEOs in trade shows is part of what experts say is a general trend among small businesses. Although data on small-business participation -- and CEO participation in particular -- in trade shows is hard to come by, a casual look at some of the shows that are popular with small companies makes clear that interest has indeed been growing.

The ASI show for the promotional products industry, for example, which is held annually in Las Vegas and Chicago, draws mostly businesses with annual sales of $1 million or less. According to the show organizers, a total of 3,470 small businesses attended the two 2000 shows, almost three times the number that attended the first show in 1998. Attendance at the Informservices 2000 conference and expo -- a Chicago-based show for the printing industry and another favorite with small companies -- is expected to reach 2,500, up from 1,650 five years ago.

BOOMLET. All this is also fueling growth in the trade-show industry itself. In June, 1999, Robin Droppa, who had worked with three Internet startups, launched iconvention, a site that allows convention attendees to register online and schedule appointments as well as visit online versions of exhibitor booths. Also, exhibitors can look at floor maps online, reserve booths, and have their listing upgraded from text to streaming three-dimensional interactive media. The site can also feature live streaming video from the convention floor, seminars, or vendors, which can then be archived.

"We have found that small companies are very interested in getting an online presence," says Droppa, iconvention's president and CEO. "Many of them don't have a strong Web presence, and they understand the value of their exhibition dollars."

And many small companies are turning more and more to trade shows as their primary form of marketing because of high returns, especially relative to outlay. "Trade shows have jumped from No. 5 to No. 2 or 3 on marketing budgets," says Dick Wheeler, president of Professional Exhibits & Graphics, based in Sunnyvale, Calif. "It's a tremendous way to market and half as expensive as sending out a sales force. You can [get] so much value from your dollar spent because you get three times as many leads than if you sent out a sales force," he says.

Schwartz agrees. "I've never written this much business any other way," he says. Moreover, Schwartz says sending out a sales staff to try to reach 60 customers would cost about $40,000, while one trade show, at an average cost of $10,000, gives him access to at least 100 customers. As he follows through on contacts he made at the three shows he has participated in during the last four weeks, he's busy preparing for his next show later this month.