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If there is one thing IT companies do well, it is putting on a great trade show. We all love to attend them, and they can feel like gold mines for our businesses. There’s a catch. Too many conferences aren’t actually yielding measurable returns on investment (ROI), and that can make them a sink for both time and money.
Too many people misevaluate the actual ROI for trade shows and conferences. They see a minimal fee to attend, so if they make even a single contact or lead, it feels like it might be worthwhile. That’s not an honest assessment. Usually, registration fees are the least of the costs associated with this method of generating business.
If you fly, you might be fair to yourself and include plane tickets in your cost assessment. Do you also include hotels? How about food and drink? Just getting around the city hosting the conference costs money, and it can easily run over a hundred dollars. When you put it all together, the average out-of-state show will often carry a price tag upwards of $3,000.
That’s still a justifiable cost if it brings in enough revenue, but that’s another point of contention. For most MSP providers, you need around a 3:1 ROI to make an investment profitable. That means each show you attend has to yield close to $10,000 in additional revenue. Now, some shows might easily do that for you. They really can be great networking opportunities and can generate dozens of leads. Most shows don’t live up to that expectation.
The biggest problem with calculating ROI on these shows is in estimating value for intangibles. You probably learn interesting tricks and discover new tools at every show. Where this goes wrong is when you overvalue these small gains to justify the next trip. How many lessons have you learned from a trade show that actually netted your business an extra $10,000 in revenue? It’s probably not a big number.
Across all industries, marketing ROIs average at a 5:1 ratio. That’s a huge bell curve, and the returns can certainly range from pure losses to massive gains. In managed IT service marketing, the 5:1 ratio is still a fair average, and it’s a good thing. Depending on what you host yourself, overhead can be pretty pricey, and most managed service providers want a 3:1 ROI to make these investments profitable.
All of this is to put solid numbers on what you should expect from your own marketing efforts. If they’re below 3:1, it’s time to change things. If, however, you have a successful marketing campaign, then it’s reasonable to look for ways to put a little more money into the effort. If you’re only average, the $3,000 you spend on a show could net $15,000 in extra revenue by simply spending the money better. If your MSP marketing services are above average, then even some of the best shows in the country won’t be able to compete.
Many of you reading this might be bristling at this point. The idea of abandoning shows and conferences that you feel have real value is offensive — or at least unpleasant. The good news is that there is a way to fold your conferencing into your IT marketing services to improve returns. The idea is simple: go to conferences that are not for IT companies. This sounds backwards until you really think about it. You want to attend conferences for your vertical market. If you offer support geared towards doctors, go to a medical conference.
When you do this, you’ll find you are often the only IT provider in the crowd. All of the networking you do is now lead generation, and the ability to transform this investment into tangible returns will skyrocket. Additionally, the intangibles will often have more value. Instead of learning a subtle way to look at IT differently, you’ll be immersed in the market you directly support. You’ll learn more about your customers’ perspectives and you can direct that into more efficient management and better marketing. It’s a double win.
Even with your new strategy, you’re still going to have the urge to go to some of your favorite conferences or events throughout the year. That’s an acceptable point of view. Part of the appeal of these trips is that they can be fun and feel like a work-centered vacation. The point here isn’t to shame you out of all of your trips; it’s to encourage you to evaluate them from a perspective of ROI and make them work better for your bottom line.
Stuart Crawford serves as Creative Director and CEO with Sebring, FL and Fort Erie, ON-based Ulistic, a specialty MSP Marketing firm focused on information technology marketing and business development. He brings a wealth of knowledge and experience pertaining to how technology business owners and IT firms can use marketing as a vehicle to obtain success.