Putting “Trade” Back Into Tradeshows

Epsteins MonksEntrepreneurs win by changing the Rules of the Game, rather than by trying to best Big Dumb Companies (BDCs) at their own game.

Seth Epstein, Founder and CEO of SocialStay and former Founder of FUEL, understands the power of changing the rules. Early in his career, he devised a clever strategy for making a splash at the Broadcast Design Association tradeshow, one of the most significant gatherings in the motion graphics industry.

While hundreds of BDCs each spent hundreds of thousands of dollars attempting to fool the market as to their relevance by investing in garish tradeshow booth monstrosities, Seth played by his own rules.

While he understood that some of his competitors’ booths were impressive, he also realized that most would not generate enough sales to recoup their booth’s cost. With an investment of less than $10,000, FUEL became the talk of the show and generated enough hype to land several new clients.

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Hyper Space

Tradeshow attendance is largely sold based upon Fear Of Loss. Entrepreneurs are encouraged to believe that they must pay top-dollar for the ideal booth location, compelling give-aways, and an imposing booth that will capture the imagination of its potential customers.

Despite what the most earnest marketing executive will tell you, tradeshows seldom make or break a company. Ignore your sales and marketing people when they tell you that your company will be “embarrassed” if you do not purchase an expansive $150,000 booth. Instead, by harnessing the heightened emotions which tradeshows provoke, you can devise guerilla marketing tactics which are far more effective than “booth babes,” gimmicky contests, and tradeshow booths the size of small towns.

Splash In The Revenue

If you are not closing sales at a tradeshow, the investment to place a booth on the show floor is likely unwarranted. Using a tradeshow to establish brand identity and make a splash is usually money poorly spent. Only Big Dumb Companies (BDCs) have enough money to waste in such a profoundly inane manner. As noted in Conventional Wisdom Isn’t, in many instances, bigger is not better.

Your customers will buy from you because your solution economically satisfies their needs. They will not remember what your tradeshow booth looked like by the time they get on the plane to sleep off their hangover on the flight home. Booth size does not matter to the average customer and it should not matter to your team either.

Assuming you are closing business on the show floor, you can enhance your close rate by making it as easy as possible for your prospects to become customers. One way to do so is to create a streamlined, “show-only” contract that is short, limits your prospects’ risk and can be signed right on the show floor without the prospect’s legal team’s involvement. Depending on the nature of your product, this might be best represented as a Paid Pilot or some other demonstration oriented sale. Pricing should be positioned as a show special and you should give your prospect an easy out if your solution does not satisfy their needs.

Booth Mates And Conference Rooms

One Frugal method to maximize the impact of a tradeshow is to cajole one of your partners into allocating you a small portion of their booth space. This will save you money while providing you presence on the show floor. This public affirmation of your relationship with the BDC also enhances your credibility.

You can also economically establish a presence at a show by booking a conference room or suite in a nearby hotel. Use such rooms for private meetings, to perform product demonstrations, and to entertain prospects in an intimate setting. This approach leverages the time-tested Scarcity principal of influence. By emphasizing the exclusive nature of a private invitation to your solution suite, busy prospects are more likely share a few minutes with you, especially if you have compelling technology that might help them further their respective missions.

As noted in Competing From The Fringe, tradeshows are ideal settings in which to gain competitive insights. The confidentiality afforded by a private forum will preclude your competitors from gaining firsthand competitive knowledge, which they might be able to use against you.

Nurses In T-shirts

Uninspired marketing executives often spend inordinate funds on items to be given to people who enter their tradeshow booth. Their justification is that such free items will incentivize people to learn more about their company’s products. Unfortunately, such tradeshow chachkies seldom generate legitimate purchasing intent. Most people like free beer and they will often provide you with their contact information in exchange for otherwise free beer.

At one tradeshow I attended early in my career, our company had one of the busiest booths on the show floor. We had a very novel product that was new to the market. We also were giving away really cool t-shirts. The Chairman of the company, who also attended the show, spent the next several weeks telling anyone who would listen that, “our booth was nearly knocked over by nurses.” In a vacuum, this was a true statement.

Unfortunately, the nurses were interested in snagging a free T-shirt and really could have cared less about our product. The minority who had a legitimate interest in our product had no influence on the buying process. As we eventually (and quite painfully) learned, our solution was purchased by surgeons and hospital administrators, not nurses. As such, we should have escorted the nurses out of our booth to make room for real customers, rather than giving away t-shirts purchased with investors’ money.

The fact that the company’s Chairman was at the tradeshow is indicative of some of the challenges we faced as a management team – see Founderitis for suggestions regarding how to deal with a rogue, misguided Chairman.

Tradeshows Are Not Vacations

Tradeshow organizers place marginal shows in resort destinations for obvious reasons. They know that BDC employees are more likely to attend a show if it is hosted in a desirable locale, even if it is a complete boondoggle.

Unfortunately, your adVenture does not have a travel budget equivalent to the typical BDC. As such, remind your team that they can take plenty of vacations once your adVenture is purchased by a BDC. Until then, tradeshows should be attended by employees who drive sales. Less is more – a small team focused on generating revenue in a private suite is ideal.

A Monk’s Whisper Is Louder Than A Marketing VP’s Yell

Seth’s approach to tradeshow guerilla marketing was inexpensive and simple. His motion graphics agency, FUEL, was based in Los Angeles. Thus, it was economical for him to hire eight out-of-work actors to pose as monks. He then purchased eight monk costumes and had eight custom medallions made.

Day One – the faux monks simply smiled and opened doors for people as they entered the convention floor. When anyone attempted to speak with them, they simply smiled, placed their hands together at their chest and bowed. Their traditional Tibetan outfits and lack of communication intrigued the show attendees.

Day Two – the monks continued to smile, bow and open doors for the show participants. However, on this day, they also wore large metal medallions around their neck that simply said “FUEL.” Again, when queried about FUEL, why they were at the show, etc., they politely disclosed nothing.

Day Three – the monks became mobile, appearing everywhere - outside of speaker sessions, riding escalators and solemnly walking in a line outside of the convention hall, all the while repeatedly chanting FUEL, FUEL, FUEL...

During the evening of the final day of the convention, the keynote speaker began his talk by asking the question that was on all the show attendees’ minds, “Who the heck are these FUEL monks? What’s up with that?” In a single moment, over 1,200 attendees, along with FUEL’s target customers all became acutely aware of FUEL.

Seth and his team were then able to harvest the hype they created for the next several months, closing significant new business in the process. Several years later, FUEL was acquired by Razorfish for an outsized fee that was atypical of a like-sized agency.

Don't Believe The Hype...Create It

Your tradeshow decisions should be devoid of ego and emotion. As with any significant expenditure, deploy a rigorous and disciplined return-on-investment analysis to each show. Reject booth envy, focus on closing sales on the show floor and limit tradeshow attendance to people not seeking a company-paid vacation.

Tradeshows are highly emotional, ego-driven events - do not get sucked into the mania. Rather, become the pied piper of hype and make the tradeshow attendees dance to your tune, instead of trying to outspend and out scream better funded, more established competitors.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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