Trade Shows vs. Individual Customer Visits

CES 2015It is obvious that meeting prospective clients at their offices around the world is the best way to present your product for their consideration. Face to face is a proven benefit in making a sale or negotiating a contract. But it is also very expensive. For a startup company trying to get into the market without a widely recognized logo, it is really a hardship for funding the effort. Here is where a product show held in a major city where thousands or even 10s of thousands can bring your potential clients to you.

A Potential Customer Gathering Example

The recently completed Consumer Electronics Show in Las Vegas, Jan 6-9, 2015 is an example. At the close of the show, it was quickly reported by the organizers as being the “largest and most amazing CES in show history”. Innovators from across the show floor unveiled their technology services, and products that will add to the quality of life around the world. Using more than 2.2 million net square feet of exhibit space, startups and existing companies alike showcased categories like automotive electronics, personalized health care solutions, unmanned vehicles, connected devices, 3D printers, gaming and much, much more.

Gary Shapiro, president and CEO of CES, touted the event as the ‘center of convergence among content, services and products. The show’s goal of creating diverse CES experiences for our attendees appears to have succeeded.’

The international CES provides a proving ground for innovators, big and small. This year there were 375 startup companies, up from 220 last year. Making individual visits to even a dozen or so of these companies would require a large travel expense fund as well as the manpower costs.

Costs of Visiting Customers Throughout USA

A single sales trip of a salesperson from San Diego to Chicago will cost about $2500 to $3,200 including air fare, lodging, meals, local transportation and depending on the salesperson’s labor rate . If more than one company is to be visited in Chicago, then the cost per company is reduced. However, most customers or clients are spread all over the country and even the world. If two dozen companies are involved, the sales cost can be $60,000 to $77,000! International visits could be 30% greater mainly due to higher airfare.

Trade Show Costs

Participating in a trade show is very cost effective, but it is still not really cheap. The components of cost are pretty straight forward for a 4 day show. It is assumed that the marketing materials, such as business cards, tri-folds, and videos are available for use at the booth already.

  • Booth Space Cost (a 10 x 10 space is a normal size booth) $4,000
  • Booth Set-up Costs (TV, Chairs, Tables, etc.) $3,800
  • Booth Advertizing (Posters, Lettering, Lights) $ 500
  • You’ll also need staff to man your booth. This can involve 2 to 4 persons depending on the size of the show. To allow a person to have a break during the day, at least two are needed. To allow visits to be made to other booths, a 3rd person is very helpful and for a very large show, 4 can maximize coverage. Using San Diego to Chicago again:

  • Labor $ 8,000 to $13,000
  • Meals $ 400
  • Lodging $ 1,000
  • Local Transportation $ 200
  • Air Fare $ 4,000
  • Total: $21,400 to 26,400

    While the cost of individual visits to 24 potential customers versus visiting 24 at a trade show is considerably more, neither is cheap. Some might argue that the labor costs should not be included as the company is paying their employees anyway.

    A Specific Booth Example at the CES in Las Vegas Jan 6-9-2015

    Falcon Enterprise’s computer keyboard with a ‘Mouse in a Space Bar’ was shown at a booth in the South 3rd floor area of the Las Vegas Convention center. The CES is an annual event that has attracted between 150,000 and 160,000 attendees. This year at least 170,000 industry professionals, including 45,000 from outside the US, attended. Over 3600 vendor companies, from around the world, presented their products for view by others companies. No products are sold to the general public at this show, as many are pre-production units projected to be introduced into the market during 2015.

    There was a large concentration of foreign attendees since many of the new electronic products are now being made in China, There were some computer key boards from Germany, Taiwan, and Korea, but most were from China. Even the large US keyboard suppliers such as Logitech, Dell, and Microsoft have most of their keyboards made overseas.

    Falcon Enterprises goal is to sell falcon keyboards with the mouse in the space bar. In addition, there is interest in licensing the falcon with the goal of getting it placed into every keyboard made. This show gave Falcon Enterprises a chance to interact with personnel from 27 other keyboard companies, discuss cooperation and examine the products involved first-hand. The booth was manned by 4 employees at a total cost of approximately $18,500 including labor. This equates to $685 per company visited, a very reasonable marketing cost per potential customer. The falcon received very positive feedback at this show.