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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip FINANCE Investing: Europe Annual Reports Bloomberg BW50 SCOREBOARDS Hot Growth Companies: 2008 Mutual Funds Info Tech 100 B-SCHOOLS Undergrad Programs Rankings & Profiles | | OCTOBER 21, 2000 MARKETING By Karen E. Klein Trade Secrets Trade shows are indispensible for making contacts, nailing sales, and showing off a hot new product — but you've got to prepare ahead
For most small businesses the answer is clear: Because you have to. While the exhibition industry prematurely predicted its own demise earlier this decade because of the Web, something curious happened: The rise of the virtual office served only to reaffirm the importance of the human touch in doing business. In many industries, the trade show has become a must-seize marketing opportunity. It's a time to meet prospective customers, get valuable feedback on your product or service, and close sales. "A trade show enables you to develop trust and rapport with your customers. Once you have that, you can leave voice mails and E-mails with a face behind them," says exhibit marketing consultant Margit Weisgal, president and co-owner of Sextant Communications in Silver Spring, Md. Taking your show on the road also gives you access to a captive audience that's primed to buy. Consider this: According to Tradeshow Week's 1999 Data Book, 86% of show attendees called the shots or influenced buying, 85% had not been called on by a salesperson before the show, and 75% left the show with at least one purchase. Over the past decade, the number of commercial exhibitions has grown 4.1% annually, with 4,503 held in the U.S. last year in 514 million net square feet of exhibit space. In all, about 123 million people will attend a trade show this year. The industry, which has been promoting itself lately with the slogan, "There are some things you just can't dot.com," accounts for more than $100 billion in annual direct spending. Despite the outlay of time and money, a trade show is still a very economical way to build your business. A national survey done by Data & Strategies Group Inc. in Framingham, Mass., showed that closing a sale with an exhibition lead costs an average of $625 and takes 1.3 follow-up calls. Compare that with the average $1,117 cost and 3.7 phone calls needed to close a sale otherwise. While a small business can easily plunk down upwards of $5,000 for travel and exhibition costs, it's one way to gain a leg up on your industry's Goliaths. And unlike the social vacuum of the Web, you can see immediately what customers think of your product. Mark C. Foley, sales vice-president at Doumar Products Inc. in Dallas, got that chance in 1996, when he took his patented adhesive-removal solvent, un-du, to the Business Products Industry Assn. show in Chicago. For $4,000, Foley rented a 10-by-10-foot booth, pinned a sign on the drape, and dreamed up an eye-popping demonstration, using un-du to remove a piece of duct tape from single-ply toilet paper and then reapplying the tape without ripping the tissue. "We thought we had a great product, but we weren't sure until the crowds started lining up," Foley recalls. His reusable stamp-and-sticker remover stormed the show, beating out 225 other exhibitors, including 3M and Avery Dennison Corp., in the Best New Product competition. The company, which exhibits at 40 shows annually, went from $30,000 in sales its first year to $4 million projected this year. Of course, not every newbie experiences runaway success. The challenges are many -- choosing the appropriate show, motivating your customers to attend, setting realistic sales goals, and following up on your leads. Yet, when you do it right, your company can squeeze a month's worth of business into three days, says Mark S.A. Smith, partner in Guerrilla Group Inc. and co-author of the best-selling Guerrilla Marketing series. But many do it wrong. A recent survey by the Center for Exhibition Industry Research showed that 54% of exhibitors admitted they didn't set objectives beforehand. "You can hope the right people come down the aisle, look at your booth, and choose to buy. You probably have a better chance of being struck by lightning," says Sextant's Weisgal. To choose the right show, scope it out firsthand before you exhibit. Winding up at the wrong show can be a costly mistake (page F.28). If you can't attend, talk to other exhibitors, study the exhibitor prospectus, and ask if attendance figures are audited. Watch out for misleading head-count statistics. Some shows tally every person walking through the doors over three days, including repeat visitors, show personnel, and exhibitors. Once you have decided where you're going to exhibit, you will need to inform your prospective customers. Allocate part of your budget for pre-show advertising, direct mailers, and personal phone calls to make sure that those prospects write you into their show agendas. In surveys, three-quarters of show attendees say that they make out their schedules in advance. Direct mail motivates 53% of previous show attendees and 29% of newcomers to visit your booth, according to industry data. On the show floor, it's important that your staff is well trained to demonstrate your product -- and sell it. Trade show attendees who leave dissatisfied complain that salespeople did not meet their needs, were't available to help them, or seemed untrustworthy, industry surveys show. Brenda Tildon, a regional exhibit trade-show manager for Bell Atlantic, once attended a trade exhibition with a purchase order for $25,000 in her briefcase. At a vendor's booth, she stood around waiting to get noticed, then got a fast brush-off. "When I asked a question about the product," Tildon says, "a business card was all but thrown at me with the comment, 'Give this to your boss.'" Instead, Tildon made a U-turn right into a competitor's booth and gave them the order. Getting attention on a crowded show floor isn't easy for a newcomer. However, you can create a respectable-looking booth inexpensively without being tacky: Buy good quality, three-sided skirts for your tables and portable banner stands for signage, and make flyers on your computer to set on plastic literature racks. Don't clutter the space with lots of giveaways, but do hand out your business card and a small gift with your logo and phone number on it to qualified leads. One way to boost your profile is to become an expert resource to others in your industry. Nancy Watson, founder of A/E Management Services in St. Petersburg, Fla., a 12-employee firm that sells proposal-generating software, participates in industry seminars that run concurrently with many shows. "I bring my products to the seminars and make sales afterward. Or people who've attended will come by the booth later," says Watson, who attends six to ten trade shows annually. For most exhibitors, the really hard work begins once the show is over. That's when you'll have to assiduously follow up on all of your sales leads -- preferably as soon as possible, so your company is still fresh in their minds. You should also analyze what you learned from the show experience and adjust what you're doing accordingly. Experts suggest you commit at least a third of your trade-show budget to the follow-up. And if you think you can skip the whole affair because all your deals are done elsewhere, think again. Trade shows become a gossipy society unto themselves, where your competitors might float rumors in your absence that your company is ready to bite the dust. In some sectors -- high tech, manufacturing, transportation, communications, and wholesale goods -- trade shows are the preferred venue for doing business. "When you're buying something expensive, there are times you've just got to kick the tires," says Michael Hough, a Penton Media Inc. show manager. You've got to be there for those customers -- further proof, apparently, that 90% of success in life is just a matter of showing up. Find out where the next trade shows are scheduled. Click Online Extras at smallbiz.businessweek.com. First in a two-part series  Have a question about running your business? Ask our small-business experts. Send us an e-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 6th Floor, 2 Penn Plaza, New York, NY 10121. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally  | | [an error occurred while processing this directive] |
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