In conversation with a client yesterday, the topic of how to allocate marketing budget within business units (and to specific shows) came up.
How do you divvy up the marketing pie across markets so that you exhibit at the most effective shows?
My client is a savvy guy and is really taking a hard look at how money is dispersed. As an illustration, his company has three major business units and attends about 8 to 10 shows during the year. Budgets for shows vary widely, with one marquee show taking 50% to 60% of the total trade show budget (and the corresponding business unit commanding a budget 10 times larger than either of the other two). There shouldn’t be anything wrong with this, except that, using even the simple “cost per lead” measure, several smaller shows account for more leads (10 times in some cases) and more sales (measurable, booked sales).
You could use the lead count measure, but you might be shortchanging the show. Perhaps the staff is not trained or the show wasn’t promoted enough in advance to give them the right introduction to prospects on the show floor. Whatever, something is amiss in why this show commands the lion’s share of the budget and company’s attention. Particularly when smaller, less expensive (both dollars and staff time) draw more leads and close more sales.
You could allocate budget based on revenue generated by each business unit. In our example, it would be more balanced: the three units are a 50-30-20 split. So, instead of getting 80% to 90% of the trade show budget, the unit would get only 50%. This causes managers and sales people to be more strategic (and accountable) for their trade show decisions.
Don’t forget that not all measures are numeric: your presence at a show speaks volumes to your marketplace, so don’t forget the intangible measures and costs of going or not going.
The talk with my client ended with the oft-repeated “plan”: take 3 years to get to know your program.
- The first year is learning the where and what of the past and present and learning the marketplace.
- The second year is time for fine-tuning–vendors, methods, simple image things.
- The 3rd year is the time for more significant change. By then you know the market, can judge shows and their impact (both internally and externally) and can shape your path to the future.
Lesson Learned: be realistic and forward-thinking in choosing shows and managing your program. Don’t go just to go and be fare to the markets you serve itnernally.