Last week, Jake and I attended the 2011 Internet Retailer Conference and Exhibition (IRCE 2011) in San Diego.This four-day event is the world’s largest e-commerce convention, with over 7,200 attendees and 500 exhibiting vendors.

This was our first “real” trade show with RJMetrics and it was a new experience for both of us. Our main objectives were to generate sales leads and raise awareness of RJMetrics in the internet retail community. To help achieve these goals, we purchased a 10’x10’ booth in the exhibit hall to peddle our wares.

This post is a summary of our experience as newbies to the trade show circuit. It is the result of data collection and note-taking on both our and other exhibitors’ behavior and performance. The data taught us three main lessons:

  • It pays to be aggressive
  • We have the most success with conference attendees who don’t look like us.
  • One of us has a very bright future as a carnival barker.

Who wouldn’t buy software from these handsome, slightly blurry gentlemen?

Exhibitor Social Dynamics

Within the first hour of the show, we observed quite a bit. Most notable was that trade show exhibitors appear to all fall somewhere on the “aggression spectrum,” with the most prominent approaches including:

  • Disengaged: exhibitors sitting behind their booths, not making eye contact with anyone, and waiting for attendees to approach them.
  • Passive: exhibitors standing, saying hello, or otherwise giving physical signs that they are available to speak if passers-by are interested.
  • Passive-Question: exhibitors attempting to engage passers-by with easy-to-reject questions such as “Can I give you some information on our company?”
  • Aggressive: exhibitors approaching passers-by with out-of-the-blue questions related to their pitch, such as “do you ship product?” or “who is your domain name registrar?”

Additionally, many exhibitors made use of “enhancers” to help attract attendee interest. (We had none of these to offer.) The most popular ones included:

  • Swag: Pens! Stress balls! T-Shirts! Nothing softens a sales pitch like free junk with your company’s logo on it. While some attendees were lugging bags of this stuff around, we didn’t perceive any disadvantage by not offering it. (This is based on casual observations of our performance relative to nearby booths that were aggressively distributing swag.)
  • Sweepstakes: There was a huge promotion at the conference in which attendees who collected “stickers” from about 40 specific booths would be entered to win a new car. (We could have been one of the 40 booths by shelling out $7,600 to the conference organizers.) We were definitely losing leads to this promotion, as many passers-by used “I have to get my stickers” as a reason for not staying to learn more about us.
  • Hot Girls: The vast majority of attendees were male, and some exhibitors hired models to engage passers-by and lure them in for a conversation. This appeared to be effective. However, I can see how certain attendees might find this patronizing or otherwise offensive.

Data Collection

For that first hour, Jake and I waited for people to come to us. We quickly decided that it would be worth A/B testing other approaches to see how we would do. For the next three days, we recorded the following data points about every interaction we had:

  • Date and Time
  • Badge Type (attendee or exhibitor)
  • Gender
  • Approximate Age (by decade)
  • Ethnicity
  • Number of People in Group (when applicable)
  • Discussion Starter (Jake or Bob)
  • Success or Failure (success was defined as being able to give a 30-second pitch on what we do and learn where the attendee worked and what their role was at the company)
  • Approach Used (see below)
  • We collected data on four different conversation-starting approaches:
  • “What is your average customer lifetime value?” This heavy question was designed to stop people in their tracks and be a lead-in to a conversation about the benefits we provide.
  • “How much of your revenue is from repeat customers?” This was a less intimidating question with the same intention as above.
  • “Does Your Company Generate Data?” This was a question that we knew people should always say “yes” to.
  • “Can I give you some information on RJMetrics?” This was passive-question approach.
  • The Walk-Up (when people came up to us unsolicited).

At the end of the three days, we collected 330 data points, 230 of which were successful conversations and exactly 100 of which were rejections.

Inbound vs. Outbound

One thing was clear: it pays to have an outbound strategy. Only 28% of our conversations were walk-ups. This means that employing an outbound strategy allowed us to extract between 3 and 4 times as much value from the show as we would have otherwise.

We initially speculated that the quality of walk-up traffic would be higher than that of random passers-by. However, we observed (unscientifically) that this was not the case. While some very high-value prospects did approach us as walk-ups, we ultimately derived more qualified leads from our outbound conversations.

Effectiveness by Outbound Approach

Naturally, 100% of walk-ups converted into conversations. Below, we show the conversion rates on the other outbound approaches.

Clearly, the more aggressive methods (i.e. asking a pointed question that is difficult to brush off) were the most effective. Asking questions about repeat purchase rates such as “What Percent of Your Customers Come Back to Purchase a Second Time?” was the most effective method, with a whopping 79% conversion rate.

The least effective method of the outbound approaches was the passive-question technique (i.e. “Can I give you some information on RJMetrics?”)

Age

The most common passer-by was in their 30s, and the populations steadily dropped off with each additional decade of age. The percentage of attendees in their 20s (like us) was surprisingly small.

Our success rates were lowest with attendees in their 40s, but increased substantially at each extreme end of the age spectrum. We weren’t surpised by our success with 20-somethings, but would not have predicted that we’d have such strong performance with much older attendees.

Race and Gender

We were interested in the breakdown of attendees at the conference and our relative success levels with different groups of people. While there is a potential for selection bias here, we feel that we spoke with a random sample of the conference population. As such, the breakdown of our interactions is likely representative of the conference population as a whole.

72% of our interactions were with white males. Interestingly, it was about as likely that we interacted with someone who was non-white (15%) as with someone who was non-male (13%).

The conversion rates of different race and gender combinations are also quite interesting. We were least likely to convert white males (58%) and most likely to convert non-white females (87%). Overall, our conversion rates on females and non-white attendees were higher than their counterparts.

Jake vs. Bob

So, who was the better pitchman? Despite heroic trash talking, Jake put me to shame. 66% of his attempts converted into conversations (compared to my paltry 55%).

We also looked at conversion attempts for females only. This data revealed that, while Jake still converted attempts into conversations at a higher rate than I did, the gap was significantly smaller. Unfortunately, these rates did not carry over to the after parties.

The ROI of An Aggressive Pitch

All-in, our booth space, display materials, meals, travel, and accommodations added up to about $8,000 of total expense. (This does not include the opportunity cost of our time.)

The exhibit hall was open for a total of 20.5 hours across 3 days, which works out to about $6.50 per minute to participate in the exhibition. As the co-founders of a bootstrapped company, that figure weighed heavily in our minds every time we considered getting some lunch or taking a bathroom break.

If you look at our total interactions, the numbers get even larger. Based on our count of 220 conversations, we paid around $36 per pitch. This is where our aggressive sales strategy really makes a significant impact. If we had only interacted with the 65 walk-ups from the conference, that effective rate would have been $123 per pitch.

In other words, we extracted nearly 3 times as much value from our conference experience by simply getting out in front of the booth and selling more aggressively.

Given these data points, it becomes clear why some companies are willing to invest money in novelties and gimmicks to increase traffic to their booths. Spending a few thousand dollars could double or triple the effectiveness of your experience while increasing your costs by a significantly smaller percentage.

Was it Worth It?

Given the price point of our product, we will break even on this conference if we convert a single lead into a long-term customer. Based on the leads generated and our typical sales cycle, it seems very likely that we will do much better than that.

There were also less tangible benefits to participating in the show. We increased brand awareness, strengthening our relationships with existing customers, scoping out the competition, and keeping up-to-date with emerging trends and technologies.

Perhaps most importantly, however, this experience has given us a new perspective on how to think about the costs of customer acquisition and spending money to acquire new business. If this show turns out to be a profitable endeavor, we will have have a great baseline for the cost of putting people into the top of our sales funnel. With this data, we can feel much more confident about making investments in advertising and other forms of lead generation.

  • Commentor

    I love this post.
    I’ve done very few shows where I could prove a decent ROI and although there are exceptions I generally pass them over in favour of other tactics that brought me better results.
    Execution on these things counts for so much (as you proved with your data). I’ve seen folks doing their email, surfing the web and literally sleeping in booths that their companies have paid thousands for. When it comes to shows, you need to be all in or don’t bother going at all.
    April

  • Marty

    Terrific post. A lot of companies would be well-served to run the same analysis on their tradeshow spend. Next post request: data analysis on the after-party conversions.

  • ken_hillyer

    Great post and data, guys. Very important for [cash-starved] startups to consider value vs. price in every investment.

  • drewvolpe

    Great post; nice to see some numbers. Would love to see a follow up on how you decided to go to this particular show. ime, a big part of the battle is figuring out which ones your potential customers will be at. No matter how well you execute, if the show is all vendors or the wrong audience, it’s a big waste of resources.

  • Mark Miller

    Really appreciate your write up and hope you will follow with your plans for your next conference. It will be interesting to see how you will change your approach, what your set of questions will be to stop the most traffic, and if you really do break down and distribute swag.
    Great post mortem. — Mark

  • Derek E. Weeks

    Great post. Really enjoyed your perspective. Although I have constantly questioned the value of tradeshows and measured ROI for our investments, it was nice to see your sotry laid out with all of the associated performance metrics. Many organizations should think about measuring their tradeshow attendance like this — whether they are a $50B firm or a $10M start-up.

  • davebonobos

    What a terrific post. As a veteran of 10+ e-commerce shows, this is the most entertaining, and thought-provoking, debrief of an event that I’ve come across. Go RJ metrics!

  • Eric Wu

    Great post guys, thanks for sharing the details of your analysis. I have a feeling this will be referenced by a lot of startups considering trade show value proposition (it’s definitely going to spur some conversation with my co-founder)

  • Suraj

    Great post. One quick question…how did you guys find the time to record all this data. Didn’t it take away from your potential interaction time?

  • mike colella

    Awesome post guys! Thank you for doing this. I will definitely remember this the next time I exhibit.

  • Alex Capehart

    Like davebonobos, I’m a show vet too and this was a great breakdown gents! Even though I’m in biz dev, I still think you can measure what some say is not measurable (and you proved it with this post)….oh and carnival barker is a huge compliment. P.T. Barnum was a brilliant marketer! Best of luck, RJ Metrics is very cool :)

  • Kevin Shayne

    You experience mimics mine. Passive booth staff have poor results. This is why I lean to having regional sales staff involved in their area shows. They have some skin in the game. Having others such as support staff to sales or other areas that have no incentive or low motivation led to poor results. Since lead numbers fall in my domain having the proper staffing is essential.
    Excellent diligence in keeping track. That was a lot of work but you proved to yourself and others the proper method to work a booth.

    Thanks.

  • johntorres

    Could the attraction of the olfer crown be infulenced by their once young business savy aspiration to succeed. Also you did mention how young you and your company is and how there were few 20 something attendees. Could this be more company with individuals who have achieved more and matured more at a younger age.

  • Johnny Kreese

    I’d venture a guess it was Jake’s less dandy attire that was the equalizer here. You guys aren’t lawyers, so Pat Riley suits would likely be over the top, however, given the demographic of white males in their 40s, perhaps a slightly more polished look could garner better results. Not that you don’t look nice, but you don’t look polished either. Especially in San Diego.
    How was the booth location determined? Random? Not knowing the layout, could being buried in the middle of the floor, as opposed to near entrances or exits, been a factor? If this was just luck of the draw, then not much you can do to influence it. However…here are some ideas:

    - Guest with the most compelling discussion gets a free consultative analysis (word of mouth is still big business, esp with social media)
    - 73rd Guest to approach the booth, gets an (insert technology preference here)
    - Maybe instead of stress balls, you find a way to re-brand them (Im thinking Balls of Fury but thats trademarked) to throw at co-workers still using excel and pivot tables
    - Free itunes gift card for nicest guest
    - Given the demographic of 30-40 year old white guys, maybe a gift cert to golfnow.com, or stubhub.

    Even hosting your own afterparty, or meet-n-greet could have been a fun way to see if people are more tempted by free stuff, than good conversation, or more importantly, solutions to real business problems.

    Sometimes rewarding people who arent expecting a reward, is an effective way to make a lasting impression. Whether it pays off is another question – but a good product can often sell itself.

    I’d get a 19 inch monitor, and have a “live-pre-recorded” demo constantly running.

    Overall – I enjoyed your analysis, as well as your candor with approach and observation. Should be fun to see how next year goes, as well as whether Jake retains the approachability belt..

  • brugueras

    I was about to give up on conferences for my bootstrapped startup after my last one. Thanks for such an interesting post. Not only will I be more aggressive, but being in the right conference is also very important and it seems that a bunch of your perfect customers were walking around IRCE. Hope you convert more than one into a long time customer.

  • Greg Berry

    As a CEO/Founder who has done hundreds of tradeshows, this is an outstanding post. Now instead of writing what tradeshows are like and what to keep track of, I’ll point people to this.

    Two important things to add…

    1) Don’t get caught up in the tradeshow hype and the BS talk. You get all pumped up, everyone is all excited and then you get back home and it’s as if no-one has ever heard of you.

    2) The key to a successful tradeshow is in the follow-up. You MUST follow up! And track follow up. Email as a follow-up does not count. You need to call them. It sucks, but it’s well worthwhile.