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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. $16,250.00

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, $162.50 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.

© 2009 Michael Flavin
No portion of this article shall be reproduced without expressed written consent.

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