Question: What do you consider an acceptable marketing cost/lead?
When working with my clients on their trade show marketing program, I project potential ROI using a calculation similar to the following example, which takes into account the total trade show marketing investment:
1.) Number of qualified leads generated: e.g. 100
2.) % of those leads most likely to lead to sales: e.g. 25% or 25 total
3.) % likely to close & generate revenue: e.g. 50% or 12.5
4.) Average value per sale: e.g. $10,000
5.) Expected sales volume: e.g. $125,000
6.) Total investment at this trade show marketing event: e.g. $16,250
7.) ROI = 7.69:1 or for every $1, $7.69 generated
8.) Value of a new client over 5 / 10 / 15 / 20 years?
In this example, $1,625 was spent per lead to generate a $10,000 sale. It is important to identify all expenses incurred, including space rental, shipping, drayage, travel, services, exhibit costs, graphics, pre-show promotion and post-show follow-up campaigns. You can then identify whether or not you’re spending an acceptable amount based on your average sale & projected sales volume. This amount will vary by industry and individual company.