Making the Most of a Trade Show
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Perhaps one of the most frequently asked questions in franchising is, "How do I find franchisees?" What some of my clients have in their head is a carnival-esque vision from their franchise youth--standing at a booth at a trade show, hawking like the barker with the too-small basketball hoop.
Today's franchise sales process is, of course, much more sophisticated than this. The internet generates most franchise sales leads--by some accounts, more than 70 percent--with public relations, print advertising, direct mail and referrals generating much of the remainder. But for many franchisors, trade shows and expos remain as relevant today as they did during their heyday.
Franchise Shows vs. Industry Shows
Before exploring the question of whether trade shows and expos are the right strategy for you, let's draw an important distinction between franchise shows and industry shows.
Franchise shows, the most prominent of which is the International Franchise Expo, cater to prospects actively shopping for franchises, people looking to learn more about franchising, and people trying to sell products to franchisors. From the franchisor's perspective, these events can be fertile hunting grounds. At last year's IFE in Washington, DC, for example, nearly 80 percent of the approximately 14,000 attendees described themselves as potential franchisees, and more than 45 percent of these potential franchisees indicated they had more than $100,000 to invest.
Industry shows, by contrast, do not focus on franchise buyers, but instead on target audiences from a particular market in which franchises may be offered. The National Restaurant Association Show, which is held in Chicago each May, attracts over 70,000 restaurant industry professionals to a single site for four days. And while most of these attendees aren't thinking about franchising, about 3,500 of them reported they came to the show looking for franchise opportunities--showing enough interest that the NRA has designated a separate "Franchise Pavilion" for franchisors to solicit their franchise opportunities.
The reason it is important to draw this distinction is that franchise shows are different from industry shows in a number of important ways other than their targeted audience.
Choosing Your Shows
First of all, most franchise shows tend to cater to a relatively local audience. So, if you aren't targeting franchise sales in the area where the show is located, a franchise show in that particular market may generate few, if any, leads that will be of value to you. (By the way, exhibiting at franchise shows in registration states will probably require you to be registered--so be sure to check with your attorney if there is any doubt in your mind.)
Another factor to keep in mind is that at franchise shows, most of the action takes place over the weekend, when people take time off from their jobs to invest in their future. Since most of these prospects are local, some franchisors will elect to stay an extra day to meet with their most qualified prospects or even to hold seminars to move the franchise sale along more quickly.
Industry shows, by contrast, often draw a national or even an international audience. Since they will often be held during the week, attendees are eager to go home following the show, so seminars, receptions or other activities scheduled for the day after the show will meet with a lukewarm response at best. Instead, such events must be hosted during the show itself.
Likewise, savvy franchisors know not to invite their preexisting prospects to a franchise show, as this will only have the effect of exposing those prospects to their competition. With perhaps 300 or so franchisors exhibiting, if your prospects go to the show, they should find you.
Industry shows, by contrast, can be significantly larger and more difficult to navigate. The NRA show, for example, has over 2,000 exhibitors, and your prospects will need to be in good shape to see everyone even if they spend all four days there. Moreover, because these shows attract such a geographically diverse audience, they afford a great opportunity to meet face-to-face with prospects from around the world. And since industry professionals will invariably know about industry shows in any event, franchisors often promote these shows to their prospects.
Not Right for Everybody
As with most marketing strategies, trade shows and expos are not right for every franchise concept. And even if trade shows are appropriate, you must also answer the concept of which trade show is right for you.
In determining if a particular trade show is a good fit for your franchise concept, you need to start by understanding the particular buyer you are looking to reach. Virtually all trade shows track this kind of information, so it then becomes a matter of evaluating your target vs. these statistics.
For example, franchise shows do not tend to be a great match for franchise concepts that require a larger initial investment. The IFE, for example, reports that 12 percent of their attendees have more than $500,000 to invest and only 6 percent have more than $1 million to invest. If you are looking for an experienced restaurant operator for a franchise who can support a $1 million buildout, you can apply the show's own numbers and your own estimate of restaurateurs in the crowd to guesstimate at the number of qualified prospects that might walk by, and make your decision based on that. Based on our experience, franchise shows seem to be most effective for franchisors with an investment requirement of $250,000 or less.
In addition to looking at the statistics from past shows, you should talk to past exhibitors to determine just how effective particular shows are. The fact is, some shows are better than others. Given the expense of time and money involved, it's important to focus only on the shows that will generate positive returns for you. Most shows will pre-publish exhibitor lists, making a quick survey of exhibitors relatively easy even if references are not provided.
When it comes to franchise shows, geography will be an equally important consideration. While some shows command an international audience, for the most part, franchise buyers will be driving two hours or less to come to your show. So if you are not targeting franchisees within that radius, your marketing dollars may well be better spent elsewhere.
Trade Shows by the Numbers
The most important thing to remember at trade shows--aside from bringing a comfortable pair of shoes--is that these shows are about lead generation, not sales. While you want to do everything you can to build rapport with your prospects and to qualify them on the floor, a good show provides you with a constant stream of traffic. And that traffic may walk by if you are too busy with a prospect to engage them.
One solution: Bring more people to help you work the booth.
While booth space will cost you several thousand dollars and up, numerous "hidden costs" need to be included in your trade show budget--and should be included when tracking costs-per-lead and costs-per-sale. Perhaps the biggest cost is that of travel, food and lodging for those working the booth.
Another "hidden cost" is the cost of the material you provide to those who pass your booth. On one hand, you'll be meeting with prospects who just met your competitor, so you want to put your best foot forward. On the other hand, with hundreds of prospects stopping by over a four-day period, you could go through a small fortune handing out brochures that you printed at $3 or more per piece. It might help to develop a small but professional flier or handout that you provide to all the "bag stuffers" who pass your booth--but keep a supply of your full-sized brochures under the table to pass out to your most serious prospects.
All tolled, you can probably expect to spend at least $10,000 on any given trade show. If your experience is similar to the anecdotal experience of some of our clients, a good show will probably generate a couple of hundred leads, several strong prospects and, assuming you are handling the sales process correctly, one to three franchisees.
Some years ago, as the popularity of the internet began to rise, trade shows and expos declined in popularity and foot traffic. In more recent years, our experience has been that they have bounced back strongly. And while they no longer generate the foot traffic they once did, trade shows and expos provide many franchisors the ability to get up close and personal with a very specific prospect in a very specific geography, which can be a very strong combination indeed.