How to Measure ROI Potential for Trade Shows

Return on investment potential.

ROI, or return on investment, is a popular measure of performance for one reason: simplicity. Regardless of the industry or the type of investment, ROI can be used to determine the value of an investment. The formula is profit (or loss) divided by the cost of the investment. For advertising and trade shows, this means determining the total cost of the trade show and estimating total profits.

Instructions

1. Determine the costs associated with going to the trade show. Include the costs of transportation (taxi and airfare), food, promotional items, setup space, labor, hotel room and anything else associated with participating in the trade show.

2. Figure out a way to identify or connect the sale of your product to the trade show. This is easy for sales made at the trade show, but to truly track ROI, you will also want to know what the residual sales are. On way to do this is to give everyone you meet at the trade show a discount if they use a certain discount code that is attached to the trade show.

3. Estimate your profit. Determine how much of your product or service you will be able to sell at the trade show. Think about sales after the fact, or residual sales. Let's say you sold 10,000 widgets last year at the trade show and another 2,000 were sold after that, which you attribute to the trade show. This year the promoter estimates that traffic will be higher than last year. Your estimate is 15,000 widgets in total. Each widget costs $2 and has a profit of $10. So this is $150,000 ($15,000 x $10) profit.

4. Divide the estimated profit by the cost of the investment. The calculation is: $150,000 / $30,000 = 5.

5. Multiply the answer is Step 4 by 100 for a percentage return. The calculation is: 5 x 100 = 500 percent.

References

• Investopedia: Return on Investment