Reviewing ROI for Last Year, Helps to Invest for This Year


New Year celebrations over, Christmas a distant memory, now is the time to sit down and review last year’s marketing budgets and set them again for this year. So we’d like to help you take a step back from your marketing and promotion activity to show you how to measure it against the reality of your annual sales figures.


Now is the time to measure your Return on Investment (ROI).
This really is an essential part of your sales and marketing strategy, because if you don’t properly measure how well you did at all those events you attended, how will you know if they were profitable? In short, did every event you paid to exhibit at make you money, or did any of them lose you money?

It’s all about the leads
When it comes to sales leads, not all leads are equal. Some will be ‘qualified’ – these are the ones, you can feel with a degree of confidence, that are more likely to convert into real sales. You or one of your colleagues will have had some interaction with this potential customer, so you’ve got an idea of what they want and how you can  supply it.

Then we have the ‘unqualified leads’. At an exhibition they’re normally collected through something like a competition, designed simply to collect the business cards or contact details of as many potential contacts as possible without worrying too much about their quality. Arguably, at a trade show, there is an element of pre-selection, given these leads have chosen to attend this specific event. But beyond that, these are the leads you’ll be handing over to your sales team to follow up in cold calls.

Leads that lead to sales
What’s essential though, is that you carefully (and accurately!) record and track every one of these leads, so you can check which ones converted into sales, how many sales you made, and how much income they generated. And don’t forget to associate them with the correct event so you know where the leads came from in the first place. (This is where a good CRM comes into play).

The real costs
You then need to calculate the real cost of the exhibition to you. That’s not just the cost of attending and the cost of your exhibition stand, but also any associated promotional material, travel costs for getting there, staff accommodation and food, client entertainment, staff costs. The list could go on, but you should really incorporate as much as you can to get the full picture.

However, with all these great stats, you can then calculate a pretty accurate Return on Investment – how much genuine income was generated from an exhibition and whether it was really worth it. Here’s the back of an envelope calculation to keep it simple:


The value of a lead
You should also create a specific lead value.  This is going to vary from business to business, but over time, it’s possible to develop a good idea of the percentage of sales you’re likely to generate, then attach a monetary figure to it, based on the cost of any specific event or exhibition.

As an example, say 50% of enquiries lead to a request for a quote from your business. Of these, 50% lead to a sale. In other words, 25% of enquiries are likely to result in a sale.  By then putting a financial value on the total sales you can work out a nominal lead value.  So you need to make sure that the cost of your lead is less than the margin made on the sales generated. Which takes us back up to the ROI calculation above.

Decision Time
So, now you have some great stats and you know exactly how well you did at all the exhibitions you attended last year. Or not.  The next step is to look at all that activity last year and ask yourself, “was it worth it?”.  Sometimes the answer will be clear cut – a big, expensive event may have cost you a vast amount of money but generated disappointing sales. It’s likely you won’t be attending that one again this year. Conversely, you may have been really successful, generating fantastic sales with a great ROI. This one, you’ll attend again, and hopefully it’ll be equally successful if not more so.

Others will be more borderline. Lead value might be slightly too high, but has the potential to improve with some judicious cost cutting. Or you may ‘need’ to attend an event for PR reasons – it’s important for your business to be ‘seen’ to be attending by members of your industry, or customers.

As ever, the answers will vary with each event and with each type of business, but once you’ve sat down and crunched the numbers from last year, you’re going to be in a much better position to decide for yourself.


Image source: Stack of pound coins (Images_of_Money) . CC by SA 2.0

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