Customer Success

How to Think About The Huge Expenses of Events and Tradeshows

echojason@gmail.com'

Jason Lemkin

Events and trade shows.  They’re expensive.  You don’t get enough booth traffic.  The folks that do come by are too junior.  It sucks up days at a time.   The air is convention-center nasty.  Too much ice cream, too much alcohol, too many almost-all-dudes parties.

How can it be worth it?  Even just $25,000 for the worst possible booth, plus tickets, hotels, schwag … and taking 3-4 people out of the office for days at a time.

No thanks, you might think.

But … you have to do the right ones.  You have to.

Let me give a very visceral example.  A good CEO friend of mine recently raised his very first $250,000.  He’s got 15 customers, good customers, but it’s really early.  And he was trying to decide whether to exhibit at Dreamforce — for $25,000.

That’s 10% of all the invested capital!!  How could that make any sense?

And I said do it.  And he is.

Let’s talk about why it’s a good investment:

  • Trade shows / events produce a lot of so-called “leads”, but a lot of cr*p leads and long lead time leads.  Lots of tire-kickers that waste your time that you can’t escape from.  True enough.

BUT …

  • Any event that is large and spot-on for your product should get you at least one customer.  Probably more, but at least one.  Now, if your product is $10 a month, it’s tough to make that $25k back.  But what if your product is $25k a year?  Or more?  You only need one.  I did an experiment at the ’15 SaaStr Annual with a company I invested in, RainforestQA.  A decent match with the founder-CEO-SaaS dynamic, but not as spot-on as all the other vendors.  They closed 2 customers, at $30k each per customer — already.  A more directly on-point (and somewhat larger) case study is Salesloft.  They got about 100 leads and met dozens of existing customers.  If your ACV is high enough, you don’t have to get out a calculator here.
  • Importantly — events can be a key in-person “second” or “third” touch.  Many leads need 2-3 touches, 2-3 contact points, before they close.  Meeting with someone already in your pipeline at Dreamforce … can be magic.  It’s not that the show generated the lead, but it was the additional touch necessary to close.  This is some of the magic in the math of the investment.

tradeshow

  • Big events are a terrific way to meet and reconnect with your existing customers.  If you have Salesforce customers, and you exhibit at Dreamforce … you will meet your customers.  You need to visit all of them … but often, you can’t.  At the right trade shows, the bigger ones … they’ll come to you.  This builds true, attitudinal loyalty.  Which equals happier customers, more upsells, better retention.  Think of big events as much a customer success investment as a sales / marketing investment.
  • Events are important for the partner ecosystem.  Partners all get together at events.  You don’t need to do them for this reason, but again, it binds you together with your partners.  Joint marketing, joint parties, etc.  Partnerships also need to be built, maintained, and rebuilt with handshakes and face-to-face time.
  • Trade shows are like peacock feathers — they are displays of success.  The more successful the start-up, the bigger the booth, the better the display.  Shouldn’t be true, but sort of is.
  • You gotta be present.  If you aren’t there, and the competition is … you sort of lose in continuing to build your mini-brand, and later, your brand.

echotonyThe real problem with events and trade shows is you don’t really get a “better” deal the bigger you get, you don’t get scale benefits.  The biggest vendors at Dreamforce this year will spend $4,000,000 or more (!) all in, including the biggest sponsorships, the biggest booths, the biggest parties, etc.  So as a % of revenue, it never gets cheaper.  In fact, the folks that put on the biggest and best shows and events know exactly how to get their pound of flesh.

So let’s go back to my friend — spending $25k of his $250k (!) on Dreamforce.  Well, all of his existing customers will be there.  All of his prospects.  And his deal size is $25k+.  You really don’t think he’ll get one more great lead?  And another 10-20 decent ones for lead nurturing?  And get some long-term upsell and customer retention from it?

Of course he will.

…..

And on that note — we only have only THREE (3) standard / gold and ONE (1) platinum booth sponsorships left for ’16 SaaStr Annual (see below).  That’s it!  I know it’s early, but they’re almost all gone.  Think about it IF you sell to founders / CEOs / execs in SaaS.  If you do, we’ll have 5,000+ folks there.  You really don’t think you can get one more customer?  And take a bunch of your existing ones out to dinner?  If it’s in your sweet spot – do it!  But if it’s not, absolutely — don’t.

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Published on August 17, 2015
  • A timely article as I am deliberating on whether to take my bootstrapped company to Disrtupt. Thanks for the (helpful) post!

    • May I ask which one is your bootstrapped company? 🙂

  • Brian Sallee

    Great post, Jason! A few things we’ve experienced since going to tradeshows. The people you meet at the shows will likely tell their colleagues and industry peers about your solution if it’s any good—so there is a viral aspect to tradeshows (this really pays off in years 2 and 3). When you are a new company and your prospects are concerned with the stability of your company it really helps to meet them in person. And tradeshows are a great way to meet with many prospects in one location (hint: send pre-show email to prospects in that area). To maximize the value of your trip (if traveling for the show) make sure you schedule some meetings with existing customers or prospects who aren’t attending the show.

  • Another benefit is that the speakers will interact with you, your booth, and your brand, and they might plug your product during their talk as a result. Especially if the booths are in and/or around the speaking area.

    For example, I remember many speakers at Sales Hacker SF looking out and seeing the sponsors and then talking about them off the cuff during their talk.

    i.e. Free brand boost

  • Great article! I’ve actually been trying to reach someone on your team to discuss sponsorship opportunities for SaaStr 16, but I have yet to get a reply. Could you direct to me someone in addition to sponsors@saastr.com? Thanks!

  • May I add another critical value waaaaay ahead of getting a customer? TALKING TO THEM.
    If you’re in SaaS with smallish ASP or #FastSaaS with tiny asp, you run your business from email + phone. Face-to-face meetings are pure gold, you are LUCKY to get them.

    Events are your chance to talk, in person to people who matter (just pick the right ones). If you convert them to a customer after, that’s simply upside. Some things are only said at booths.

    I’ve done my share of events, yet you have to *pry* me out of the booth on the last day. Not because I give the best demo… but I think I have the best ears. It’s that critical.

    PS) thanks @Jason for not even mentioning “lead scans”.

    • Jason Lemkin

      +99

  • If you are going to invest on attending a tradeshow, then think about your approach. And then deliver on it. Most people spend more time on their stand design, t-shirts and swag than their event process and supporting apps. And the event process is C2R (commit to revenue). From the time you commit to attending the event all the way through to following up and closing deals.

  • Akmal Paiziev

    Let me share the fresh Workly ( http://www.workly.io ) case: we spent about $6000 for exhibiting at RISE conference. We thought that we will not find customers among tech community, but was looking for partners in South East Asia. We covered our expenses just singing 2 partners in Malaysia and Hong Kong.

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