Calculating ROI

Measuring return-on-investment (ROI) at a trade show boils down to cost per lead (CPL). The calculation is simple:

Total Cost of the Show ÷ Total Leads = Cost Per Lead

This is the best way to get a feel for how well you did at the show.

If the show costs were $150,000 and you come back with one lead then your CPL was $150,000. If you come back with two leads the CPL was $75,000. If you have 150 leads they were $1,000 each. You can begin to see why capturing leads is important.

CPL will allow you to compare the costs to other tactics like direct mail or advertising.

Many people recommend taking it a step further and comparing the costs of the show to sales generated from the show. While this is great, in theory, it is most difficult to actually measure and, therefore, it rarely is.

The calculation is easy:

(Total Sales – Total Cost of the Show) ÷ Total Cost of the Show= Return on Investment

The problem is that it is virtually impossible to attribute specific sales to the show and, even if you could, the results from year-to-year could be so erratic as to render the measurement useless.

I’m not saying that traditional ROI isn’t important, it is. I’m just saying as a standard measurement it is far less reliable than CPL.