Theoretically, this formula for determining where your trade show dollar goes should give you a tool for determining your trade show budget:
|Travel & entertainment (T & E)||14%|
|Exhibit design, including graphics||11%|
|Shipping of exhibit materials||9%|
|On-site promotional materials||5%|
|Off-show floor promotional expenses||3%|
|Lead management and measurement||2%|
|Exhibit staff training||1%|
According to the Experiential Designers & Producers Association (EDPA), if you are considering a new exhibit, you should expect to pay from $138-$154.50 per square foot for a custom exhibit while in-line exhibits cost approximately $1,000 per linear foot. A rental exhibit can save 25-40%. Want to read more? You’ll find additional help here and here.
But—and it’s a big but—how much of what you spend is customer-facing? The best case is that the lion’s share of your budget is used to engage attendees, but that assumes you are in control of what you are spending. How many of your costs are hidden and dedicated to getting your exhibit on to the show floor? Plus, the biggest conundrum: how much of this can you really control before the show?
Seriously, have you ever been hit with an unexpectedly high drayage or material handling bill?
Lack of transparency undermines trade show participation
Something that has troubled exhibitors for a long time is the lack of transparency when it comes to the costs for non-customer facing expenditures. Up to a point, exhibitors shop for particular products or services, perform their due diligence, and get competitive bids before committing to a supplier.
However, where this process breaks down is in the middle. Trade show exhibitors need particular services to make sure their exhibits are ready for the opening day of the show. Some of these services are non-exclusive; exhibitors determine the companies who will provide them. These include installation and dismantling as well as enhancements such as furniture and floral.
Then there are exclusive services such as material handling, sign rigging, and anything requiring a forklift that only the show’s general contractor is allowed to provide. It’s bad enough that these services are exclusive, but what takes budget control away from exhibitors is the fact that the rates for exclusive services are not published prior to the exhibitor’s signing the space contract. The rates for exclusive services result from negotiations between the general contractors and the associations or organizers responsible for the trade show.
How can you budget when you don’t know what services cost?
In what universe do we purchase without knowing the price? And we’re not talking about arbitrary services, but basic services such as getting the exhibit properties from the loading dock to the space on the floor. And no, the rates are not dependent on the venue; they are a result of negotiations.
What is truly ironic is that several heavy equipment shows build material handling rates into the cost of space. Yes, that’s right: heavy equipment. And where can you find the highest drayage costs? Medical shows.
Sure, everyone involved in the trade show wants the end result to be profitable, but try to explain to your finance people why it cost more to unload an exhibit from a dock in Chicago to the purchased space on the show floor than it did to transport that exhibit from Singapore to Chicago, a situation cited in the September issue of Exhibit City News.
Rare is the exhibit manager who has not heard, “What’s THAT?” when the finance people review expenditures, particularly if, for example, the drayage bill has burst through reasonable budget overages. How can you explain the costs away?
Until the situation changes, alert your finance colleagues to these practices. Perhaps your show schedule will be cut, or your space will be downsized; these are some of the unfortunate consequences of the budget-busting unpublished rates for exclusive services. Get involved in exhibitor advisory committees, and let organizers know what this is doing to your ability to adhere to your show schedule. When exhibitors don’t show up, there is no trade show. Simple. As companies demand to see not just results but real return on investment numbers, standard operating procedure between organizers and general contractors will have to change.