Friday, May 16, 2008

Trade shows are not always about sales leads

We're doing our first trade show at Albeo in a couple of weeks. It's a large lighting industry show, Lightfair, that targets lighting specifiers, mostly architects and lighting designers. When I have discussed this show with various people, I frequently find myself explaining that the purpose of our exhibiting at this show is not to generate near-term revenue or sales leads.

There are innumerable reasons to do a trade show, and certainly one possible reason is to generate sales leads. But it is not the only reason, nor necessarily the most important.

For example, I had a memorable trade show experience earlier in my career. We were marketing fiber optic transceivers to the data networking, voice networking, and data storage segments. Similar to Albeo, we were a venture-funded startup, competing mostly with other venture-funded startups like ourselves.

We did two trade shows a year. One year, over all of marketing's strenuous objections, our CEO insisted that we gather as many leads as possible during the show, and follow up on and qualify every lead.

We dutifully gathered several hundred leads, and began calling every one after the show. Not surprisingly, through the first 50 or so, we found exactly zero new, valuable opportunities. Why? Because the characteristics of the industry and our segment were not consistent with using trade shows as a sales prospecting tool.

In each of the three segments we served, there were, at most, eight companies in the world that could generate significant demand for our products. At each of these companies, there were maybe two or three design teams that were responsible for projects that might include a product like ours. In other words, our sales force already knew every possible customer and was aware of every existing project that represented any meaningful revenue. If we weren't working to close those known deals, then we were working on the wrong things.

Then why participate in trade shows, you might ask? One important reason is because that worldwide handful of potential decision-makers wanted to be reassured that they're buying from a market leader and a company that was going to be around for the long term, and a trade show was an effective tool for positioning ourselves as that leader. It enabled us to show advanced, market-leading product or technology concepts, for instance. And the mere implied expense of exhibiting communicated some level of financial stability.

In Albeo's case, any sales leads we generate at Lightfair would represent possible 2009 or 2010 revenue, which is not our greatest concern. Rather, we're launching several new products into a new market segment, and a large trade show like this one represents an efficient way to get the message about this launch out broadly and quickly to multiple audiences. So our most important metric is not the number of sales leads, but rather our success in connecting with the editorial community, the venture community, and some other important audiences. Our success metrics will be around these efforts.

Oh, and did the total failure rate in those first 50 qualification efforts convince my past CEO that it was a futile effort? No, he was convinced we were missing that one golden nugget, so he made us complete the task, which took several days. Let's just say he and I didn't see eye-to-eye on much, and we soon parted ways.
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