- Contest Factory
- August 6, 2018
Trade Show LTV: Uncover the Mystery
For many businesses, trade shows are still an incredibly valuable way to make a positive impression on a target audience — it’s very rare to get that many people in one location at the same time, with buying authority no less, all of whom are very interested in products or services just like yours.
Having said that, it’s also true that not all trade shows are created equal. If you really want to make sure that your return on investment for a particular event is as effective as possible, there are a few essential metrics that you MUST be tracking.
It’s All About Customer Lifetime Value
By far, the most important metric that you should be tracking to help determine if your trade show efforts are actually profitable is LTV, or “lifetime value.” This will tell you how much money a new lead will earn for your business over time which, when compared to the amount of money you spent to acquire them, will help tell you what your true return on investment really is.
It’s important to note that in terms of LTV, this is something that will take several trade shows to truly determine. A few weeks after a trade show has concluded, try to calculate your average LTV versus your expenses for a particular show to get a better idea of where you truly stand. Depending on your product or service, LTV may span over years and historical customers are the only way to determine your average LTV. You then use this as your baseline to compare new customer acquisition fees versus lifetime value and ongoing expenses.
To calculate historical LTV, you will get your AOV and repeat purchases. Calculate your repeat purchase rate and use this calculation: AOV / (1-Repeat Rate). Subtract your customer acquisition cost from that and you have your LTV.
But Don’t Forget About Average Cost Per Lead
Along the same lines, you’ll always want to track your average cost per lead at the show level — meaning the amount of money that you’re spending to bring new people into the fold in the first place. Then, when compared to your expenses, you’ll be able to get a fairly accurate, short-term estimate of what your return on investment is within the context of that show.
For the sake of example, let’s say that your total expenses at a trade show came out to $5,000. You were also able to walk away with 500 new, viable leads. Based on that, you can see that the average amount of money that you’re spending to acquire each new lead is about $10 — provided that the LTV we talked about earlier is higher than that, you’re in an excellent position moving forward.
It All Comes Back to Your Website
Finally, one of the most important metrics that you should be tracking to find out your trade show ROI has less to do with the show itself and more to do with what happens after the doors have closed for the weekend.
In theory, you should experience a significant bump in traffic to your site both prior to the show and for a week or two afterwards. As people learn more about who you are and what you have to offer, they should naturally want to continue that relationship after the show has ended. This is an opportunity to ensure you are addressing this audience directly with a video or specific landing page for the show.
By tracking your website traffic within the context of the show itself, you can see exactly how many unique visitors that your efforts generated. Both direct traffic and traffic generated from organic searches should increase following the show and if they don’t, it’s a sign that you may have a problem with your booth, your presentation or all of the above.
When you take care in measurement, you will have much greater control on impacting your Trade Show ROI.