The Hidden Cost of Exhibiting at Trade Shows

Marketers often underestimate the cost of trade shows. It may surprise them to learn the real cost of even a small booth they signed up for “only” $5,000 may have cost their company a total of $50,000.

Some of the costs associated with trade show exhibiting, courtesy of Expo Outfitters

Some of the costs associated with trade show exhibiting, courtesy of Expo Outfitters

When properly budgeting for a trade show, a diligent marketer will include the amount paid to show organizer for the floor space, cost of travel for each employee, cost of creating and shipping the exhibits, and so on. A number of estimating tools can help with this, a popular one by Exhibitor Online can be found here.

But many very real costs are not always obvious. On top of the bills that you pay for and at trade shows, there are a variety of hidden costs.

Salaries

Though salaries are paid whether or not your company attends a trade show, a true cost accounting should include the salaries of employees for all the time associated with a trade show. This may include the following:

Overtime Pay

Employees, even salaried ones, may be eligible for overtime pay. Trade show days are long, stretching from early in the morning, through all of the exhibit hours during the day, then including evening functions. A 15 hour day is not uncommon, especially if the employee feels compelled to keep up with their normal job activities while they are at the show. You might think of trade shows as a perk for your fellow employees. The state board of labor may not. And employees may tire of the demands of a trade show after the novelty of travel wears off.

Lost Time

Show time can be very non productive. Even employees manning a booth may have lots of time between talking to attendees or time between exhibit hours. Travel is also quite non productive. Even those maximally equipped with mobile devices, over 50% of the time on the road means being disconnected and otherwise wasted. For example, the ratio of business passengers doing email or spreadsheets compared to those watching movies, playing games or sleeping is astoundingly low. Then there’s standing in lines (at the airport, at the car rental).

Sick, Personal and Recovery Time

It’s no secret that some employees tend to go wild on company trips. It could be a “work hard, play hard” mentality (ie, drinking at the hotel bar until it closes) from which they may need to spend the next day in the office recovering (who can face hundreds of piled up emails the next day at the office even with a venti Starbucks). Or days where they skip the last day of the show to see the local sights, time that will not be subtracted from vacation pay.

Hidden Travel Costs

There’s a tendency to reward employees with extra perk on top of paying for their travel that will creep into the cost of a trade show. One example: it’s not uncommon for companies to take everyone out at expensive restaurant on the last day of the show. It may not have been in the budget, but what the hell? Your guys deserve it. Besides it’s a small expense compared to what you spent on the rest of the show (even though you’d never have taken them to steak restaurants when they were in the office.) In addition, there’s roaming cost of each employees mobile phone, parking at the airport, shuttles, room service… and you might even feel compelled to pay for the drinks in the dreaded minibar — out of the marketing budget!

Preparation Costs

Some companies, especially the ones that host their own trade shows, spend a lot of time planning for the show. One big CAD vendor starts planning 6 months before the show which involves hundreds of their employees. There is meticulous planning, scripts and rehearsals. Even smaller companies spend a lot of time and money planning for the show (advertising, travel scheduling, strategy, establishing goals, booth design, design of handouts, etc.) and this effort usually fails to get into the budget of a trade show.

Opportunity Cost

Perhaps the biggest intangible cost of a trade show is what the show costs in comparison to its alternatives. The simplest case is compare what it costs to attend a trade show to not attending one. If your company make so much revenue per day when everyone is in the office, you need to compare that to the what it costs to be out of the office. For example, let’s say you accept the cost of the trade show to be $50K and your 5 employees of your 25 employees will be out of the office for a week. If your company makes $10M a year, those 5 employees will have contributed $40,000 to the companies revenue. Instead they will be costing $50K, a difference of $90K.

You might also consider the cost of marketing alternatives. Trade show expense comes out of marketing budgets at the expense of other marketing initiatives. If the $50K was used for online advertising, what would have been the yield?  Let’s say, for arguments sake, a $50K Google ad campaign (that’s a lot of ads!) is known to provide revenue of $100K. What is the yield from a trade show.

It turns out, that is a little harder to calculate.

For More Information

2014-09-26_13-46-04 Budgeting for Dummies – and Time-strapped Smart People – Exhibitor Online
Exhibit Budgeting 101: How To Estimate a Budget for Your Next Trade Show – Expo Outfitters
exhibit cost spreadsheet Budget Worksheet – download Excel spreadsheet to get a good start on determining total cost of exhibiting, ExhibitQuest.com

 

 

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