Klebanoff Associates. Information Technology Marketing ... And More

Successful Marketing Events

Introduction

Which is more successful: marketing event A, which attracts only one person, or event B, which attracts 400 people? The intuitive response is "B." The correct answer is: It depends.

What if:

The person at event "A" shows considerable interest in placing a million dollar order.
The order is for software with an 80% profit margin (i.e., $800,000 gross profit).
Your sales people spring into action and close the sale.
Total lifetime sales to the 400 people at event "B" are zero.

Now which event is more successful? Clearly, the answer is "A". It's profit of $800,000 - x (x is the cost of the event) compares quite favorably to the $x loss of event "B".

Cause & Effect

When "bums-in-seats" (a figure of speech, not to imply that attendees are bums) is the primary metric, there is a tendency to celebrate upon reaching some benchmark. What follows the celebration is, too often, complacency.

When an organization sets bums-in-seats as the ultimate goal, it typically does not plan what to do next and fails to convert prospects into customers.

Furthermore, success in the bums-in-seats measure often leads to a false sense of security. "If we sell to just 2% of the 400 people, the event will be profitable. No problem! We'll just wait for the calls." ... And wait, and wait, and wait.

The Proper Measure

What is the proper measure of success? The easy answer is profitability, but events are only one link in a chain toward increased profitability. Unless you sell low-priced consumer goods or services, you likely won't close new sales at an event. Instead, it is a way to:

Create an impression of industry leadership and company strength;
Increase market awareness of your products, services and company;
Generate qualified leads;
Accelerate the sales cycle; or,
A combination of some or all of the above.

Accurately measuring fulfillment of the first two objectives requires before and after research using statistically significant sample sizes -- an expensive exercise. If you intend to roll out the event at several sites across the country or around the world, such testing is prudent. Trial runs in one or two cities may make the difference between an expensive failure and a multi-million dollar success. In addition, for that scale of campaign, the cost of the research is small relative to the cost of the full program.

Even with a "one-off" event, you should still measure success. The results will help in your decision and planning processes for future similar events.

If your marketing communication budget is small, dedicating a high percentage of it to research -- to the point where you can no longer afford to act on the results -- does not make sense. Since the reasons for increasing awareness and industry stature are to enhance the sales environment, a surrogate and virtually free measure of success is increased profit over time. However, since some sales will occur whether or not you stage the event, you must count only incremental profit.

When using increased profitability over time as an approximate measure of success, take the sales lag into account. If it normally takes three months to close a sale, the event likely had at most a minimal impact on sales closed the next day. Furthermore, if the primary objective of the event is increased awareness, success might take considerable time to show up in profitability.

In addition, remember to factor in other conditions. The event cannot account for all changes in profitability. For example, if you added a new sales person immediately before the event, some sales can be attributed to that person's unrelated cold calls.

Forecasting Profitability

Measuring profitability after the fact is one thing, projecting future profits to decide whether to hold the event is more difficult -- and more valuable. A useful, simplified formula for projecting profitability is:

Profit = (BIS * PP * AP) - PA - Cost

Where:

BIS = Bums in seats
PP = Probability that an attendee will purchase
AP = Average profit from each sale
PA = The profit from sales that would have closed without the event
Cost = The cost of the event

Unfortunately, there are no hard-and-fast rules for predicting any of the factors in the formula. They depend on the nature of the product or service being promoted, recognition of the speakers and the sponsoring company, the theme of the event, and the promotion, event, and follow-through activities. Experience is the best guide. What makes the formula useful is its illustration of which factors you can influence to improve event profitability.

Achieving Success

The Event Continuum

Now that you have a clear sense of your definition of success, how can you help to ensure it? The most important advice is to not view the event as a single moment in time, but rather as a continuum.

Planning
The continuum begins with the development of a detailed plan. The plan should answer the following questions:

who will manage the various aspects of the event?
what are its objectives (qualitative and quantitative)?
who is/are the target audience(s)?
what is the theme?
which marketing messages do you want the audience(s) to walk away with?
in which cities will you hold the event (you will need specific locations before you can get very far into promotion)?
who will the speaker(s) be?

how will you promote the event?
what tools will you use to generate and capture qualified leads?
what on-site personnel will you require at the event?
how -- in detail -- will you follow-through after the event to ensure that it fulfills its objectives?
who will be responsible for the follow-through?
how will you track the follow through to ensure it is done?

Promotion
The primary objective of promotion is to draw as many of the target audience to the event as possible.
This objective seems contradictory to the warning against focusing on bums-in-seats. However, while maximizing bums-in-seats is not the ultimate goal, it is an important intermediate step. This is true for two reasons. First, events are a numbers game. As the profit formula shows, if you increase the number of attendees (assuming they are all from your target market) while holding all other variables equal, profitability increases proportionately.

The band-wagon effect is another advantage gained from a large audience. Even if you are a small, little-known firm, if you fill up a large hall, everyone will look around and think "this is an important company." The band-wagon effect can, therefore, have a positive influence on the probability of purchase.

Only a small percentage of the people who see event promotions will attend. Therefore, ensure that the promotion vehicles feature your product and company name prominently and, at least subtly, begin to advance your message.

If you do not charge a fee for the event, expect that a high percentage of the people who register will not show up. The number of no-shows is generally at least 10% of registrations. Typically, the number is considerably higher, often ranging from 15 to 40% and sometimes as high as 50%. To keep the no-show ratio low, include a registration confirmation program in your promotion plans. However, do not expect to eliminate no-shows, they are inevitable for free events since there is no tangible commitment on the part of the registrant.

Event

The two variables in the profitability formula that you can effect on event day are: probability of purchase and the average profit per sale. That formula buried all selling costs and revenues in the "profit per sale" variable. However, because of the potential for significant gains, the following discussion looks separately at the ability of marketing events to compress the sales cycle.

Probability of Purchase

Clearly, a primary purpose of most marketing events is to deliver your marketing messages and, in doing so, make it more likely that the attendees will buy from you. Taking the time to properly hone your messages will, therefore, pay significant dividends.

You must, however, place those messages in the proper context. While you likely won't charge a fee, attendees still expect some return on their investment of time. The event should, therefore, include educational content that provides value to your audience. While your prospects realize that you are staging the event for promotional purposes, they want to get something in return for volunteering to be recipients of your advertising.

Another way to improve the probability of purchase is to provide easy channels for prospects to reach you and you to reach them. Collateral pieces provided at the event should, therefore, engage the audience and begin a two-way exchange.

Average Profit Per Sale

All marketing communications battle the double threat of information overload and general skepticism. In this atmosphere it is difficult to effectively communicate even a single message. You should, therefore, focus your marketing event on one key message. However, within that primary message, a marketing event can effectively deliver a number of supporting* messages.

These supporting messages can serve to add to the average profit per sale. If you have multiple offerings within a product/service family, demonstrate how they combine to leverage the value of the product/service that is the focus of the event. If you only offer one product/service, make sure that the attendees leave, if not with a clear understanding, at least with a glimpse of how it might add value throughout their organizations.

Demonstrating yourself to be a company that is dedicated to keeping its customers informed can increase customer loyalty. Thus, in addition to increasing profit per sale, marketing events can also increase total lifetime sales to each customer.

Compressed Sales Cycle

All other things being equal the shorter the sales cycle, the higher your profitability. This is true for a number of reasons:

A dollar today is worth more than a dollar tomorrow.

Work expands to fill the time allotted to it. The longer the sales cycle, the more marketing collateral and sales calls it will include.

The longer the sales cycle, the greater the probability that a competitor that was previously unknown to your prospect will find him or her and win the sale.

Marketing events can help shorten the sales cycle in several ways:

In selling to a new name account, much of the early effort is expended in getting acquainted and building the prospect's confidence in your company. A well staged event that positions your company as an industry leader can build significant trust while offering an opportunity to get acquainted with a number of prospects at once.

You can, at one time, deliver to a wide audience much of the information that would otherwise be delivered in the first few sales visits.

If a number of different interests are represented in a purchase decision, by properly structuring the event, you can meet all of the constituents' information needs at once, using a single common framework. Your marketing event might, for example, include a plenary session for all attendees that delivers the corporate rallying cry. That session can be followed by streamed sessions to meet individual decision makers' information needs. For example, one session might be for executives, one for technical staff and another for end-users.

Follow-Through

Follow-through is the most important, yet often most neglected, element of the event continuum. Follow-through is how you turn prospects into customers.

There is no magic to event follow-through. It is a standard sales process, which may include direct sales and other activities such as telemarketing. The difference is that these activities start with qualified leads who are already primed with an interest in your products, services and company. The trick is to take aggressive action to ensure that the follow-through leverages the event and is seen through to its conclusion in every case. Sales and marketing people cannot merely resume their regularly scheduled activities to the exclusion of the event follow-through.

Summary

Meeting your marketing event objectives takes considerable planning and the strictest attention to detail. There is no one thing you can do right to guarantee success -- you must do everything right. That requires commitment from your entire company. There must be an executive commitment to dedicate the resources -- people and dollars -- to stage an effective event. Marketing must be willing to commit sufficient time to get the job done. Product marketing and engineering staff must dedicate the time necessary to get the messages and educational content right. Someone, or more likely a variety of staff must assume responsibility for managing the myriad of logistic details surrounding the event. And, sales staff must be willing to commit considerable time to attracting existing prospects to the event and following through with all prospects after the event.


*	Do not take this as an excuse to pack several unrelated messages into a single event. You will confuse your audience, with the result being that they will take none of your messages away with them. All supporting messages should contribute to the primary message.