MarketingProfs' Members Register for B2B Forum 2010 for just $695! (good until 11/30) »

Ask your question ... sign up today! It's FREE!
Research/Metrics     
 
This question has been closed, and points have been awarded.
Roi Of A Marketing Campaign At A Tradeshow
Posted By: marketing on 6/29/2005 2:25 PM (CST) 250 Points
We advertised a "0% APR" type of offer to a group of 180 retailers, and promoted the offer with a coupon code.

However, we also invested about $1,500 to promote the offer to the same audience via emails and mailings a couple of months after (some of these retailers did not meet us at the tradeshow because we haven't met all 180 retailers).

Some of the tradeshow leads bought from us - but did not use the coupon code. We know this for sure. They were simply wondering if they should sell our products, and the offer didn't matter to them that much.

The tradeshow cost us $6,000. How much of this cost should we take into account when we work out the Return-on-Investment for this "0%APR" offer? Please note that i'm not trying to work out the tradeshow's ROI, but the special offer's ROI.

This offer generated $20,000 of sales with the coupon code. Other members bought $28,000 without the coupon code (Some of them met us at the show, some of them didn't!)

I know this might sound confusing, but there's a real metrics dilemna that i'd like to solve.

Thanks in advance for your input,

Posted by: ASVP/ChrisB Accepted Answer
6/29/2005 5:02 PM (CST)
Nicolas

You're the victim of a lack of rigor and exactitude in the process.

The level to which you can analyse your data is directly dependent upon the integrity and granularity of that data.

To be as precise as you wish to be, you need to know the factors that led to each sale in the two categories (i.e. with coupon code, without coupon code).

Did you mention the coupon code in any way at the trade show, or in any of the invitations or advertising relating to the trade show? If not, then you can be sure the whole of the $20,000 worth of business was generated solely from that advertising and follow up e-mail campaign.

Even so, I wish you had used separate codes for the advertisements and the e-mails, to enable you to dissect the sales and identify which medium produced what results.

If the coupon code was mentioned at the trade show, then the waters are even muddier. Why? Because people who never saw the ad and never responded to an e-mail may have used the code... even though the only way they knew about you was through the trade show.

Turning now to the people who bought without the coupon code - is there any way to track back the source of their enquiry to either the ad or the e-mail, or the trade show?

If yes, you can allocate that sale back to the device which first alerted the customer to you.

If not, well... it's impossible to allocate them accurately back to a source.

Worst case scenario: Add it all up and work out the ROI on the aggregate campaign cost against the total sales generated. And make a resolution to compartmentalise more in future by using the following devices:

1. Separate codes in every advert, e-mail, or any other direct promotional campaign item.

2. When finalising every sale, ask the customer "where did you hear about us/this offer? And what was it that persuaded you to buy this product/service?

3. Faithfully record the responses to each code, and the responses given by each customer. Then you will be able to analyse to the level of details you need so you can refocus your promotional dollars back where the results are best.

Hope this helps.

ChrisB
 
Posted by: marketing Author Response
6/30/2005 4:44 AM (CST)
Thank you Chris. Good information.

I would like to mention that the goal is to work out the ROI of the special offer (which was promoted at the tradeshow, through a direct mail campaign, and through emails). I’m not that interested in finding out which of the 3 promotion methods was the most successful (tradeshow pitch, direct mail campaign or email).

[In particular, it would be difficult to make the difference because the direct mail campaign was sent to all retailers, just a few weeks after the tradeshow. There’s no doubt that the direct mail campaign was more successful because of the tradeshow exposure]

I’m interested in working out an agreggated ROI on the special offer.

Let’s take imaginery numbers:
Cost of developing the special offer = $2,000 (special brochures, meetings, new internal process, etc).
Cost of the direct mail campaign = $1,000
Cost of the email = $500
Total = $3,500

Gross margin directly generated from the special offer, through tradeshow, direct mail and email promotions = $4,000. If needed, we could assume that $2,500 came from the tradeshow, $1000 from the direct mail, and $500 from the email.

The program is positive. $4,000 - $3,500 = +$500 (more sales will be coming in later).

However… my question is: should we allocate some of the tradeshow costs to this special offer’s ROI ? How much should we allocate?

The tradeshow’s cost was $4,000 (Travel, hotels, booth, etc). It also generated $4,000 in gross margin from orders placed without the special offer (not all tradeshow attendees used the special offer because of various reasons).

I realize we can't get a truely reliable ROI here, but I think there's enough information to make an estimate.

How much of the tradeshow cost – if any – should I take into account in this special offer’s ROI analysis?
 
Posted by: Gabriel* Accepted Answer
7/6/2005 12:24 AM (CST)
Marketing,

In order to allocate cost, you must first answer whether you would have done the tradeshow if you weren't trying to market your promo.

If your answer is "yes," you would have done it anyway, then allocate 0%, because the cost of mentioning the promo was nothing, since you were already there.

If you responded "no," and your attendance was motivated by wanting to get the promo out, then allocate 100%.

I sense you think you are somewhere in the middle. ChrisB still has a point, even if you don't want to allocate your ROI to your three channels. ALWAYS work with test and control groups whenever possible so you can say to a penny what the return was. The reason I bring this up is perhaps you have attended a trade show before and not offered a promo. You might already know what your typical tradeshow response rate is (without the promo). If you do, then you have at least something to work with, even if it isn't perfect: The cost of your promo is the extra return minus the discount.

Whatever you decide at this point, I suggest using all or nothing. I have found that if you try to invent a percentage based on your subjective opinion, it sparks unnecessary debate and you become mired in defending your percentage rather than having a productive discussion about the success of the promotion.
 
Posted by: koen.h.pauwels Accepted Answer
7/10/2005 9:03 PM (CST)
If you had many other objectives for (and results from) the tradeshow, I agree with Gabriel: because you would have had the tradeshow anyway, its cost is zero.
However, if you mostly used the tradeshow to promote your special offer (and thus took valuable air time away from other marketing objectives at the show), you should allocate something of the trade show cost to the special promotion. The reason is that, while calculating ROI for your marketing activities, you should try and paint a complete picture: neither 'forget' costs nor doublecount them. Therefore, I would put your sales results (retailer customers) in three buckets:
1) how many did you get only from the special offer (through marketing vehicles other than the tradeshow)
2) how many did you get only from the tradeshow (retailers who did not use the special offer)
3) how many did you get from the combination (retailers at the tradeshow using the special offer)

Suppose 60% of the tradeshow sales fall in bucket 2) and 40% in bucket, then I would never allocate more than 40% of the tradeshow cost to the special offer's cost. And if you do, I would deduct the allocated amount from the ROI evaluation of the tradeshow itself
 
Posted by: carrie77 Moderator Response
7/17/2005 7:11 AM (CST)
Hello all. I am closing this question since it's more than 2 weeks old. We do this to reward the contributions of participants in a timely manner + to give increased visibility to the newer questions.

Thanks for participating!
Carrie (Production Editor)
 


Get more answers ... ReTweet this!

Would you like to post a response?
Welcome to Know-How Exchange!
This is a collaborative community. We welcome everyone's participation.
All you need to do is login. Enter your account info in the box above (top right).
Not a member? Not a problem. Register here (it's FREE and EASY).




Know-How Exchange powered by MarketingProfs


Sponsored Links

Buy a Link Now

Just Released ... Download Today!
Just Released ... Download Today!
Look inside
Included with Premium Membership
User Name:
Password:
Remember Me
Forgot your password?

Top 25 KHE Experts
(Research/Metrics)
ASVP/ChrisB (14554)
Jay Hamilton-Roth (11934)
jlevin (11599)
mgoodman (10158)
koen.h.pauwels (9157)
wnelson (7755)
DWomack (6993)
Frank Hurtte (6158)
stevea (6094)
skoobie99 (4979)
Peter (henna gaijin) (4267)
mbarber (4049)
Dawson (3995)
blanalytics (3883)
thinkmor (3634)
telemoxie (3021)
SteveByrneBranding (2755)
michael (2740)
darcy.moen (2727)
Michele (2419)
SRyan ;] (2396)
adammjw (2243)
holm (2169)
AndrewS (2081)
Wiglaf (2016)
Recently Posted Marketing Jobs
Director of Marketing and Communications
Demand Generation Manager
Marketing/Advertising Faculty
Director of Marketing
Market Analyst
Sr. Field Marketing Manager - Business Intell.
Associate Vice President of Marketing and Corporat
Marketing Manager
[more jobs]

Join over 355,000 members ... SIGN UP!

My email address is and I'd like my password to be .

Already a member? Sign In!

My email address is , and my password is .


HACKER SAFE certified sites prevent over 99.9% of hacker crime.