Are trade shows becoming a thing of the past?
Trade show organizers are netting billions of dollars in annual profits. But for food start-ups like us who are looking to attend these events, is the financial cost, labor, and stress still worth it?
“Trade show leads are like milk — they have a short shelf life, so don’t waste valuable time.” — Marlys Arnold
Since Roman times, budding food entrepreneurs have been told that trade shows and exhibitions are an extraordinary way of drumming up new business.
“Go to a trade show’ they said; ‘Invest in a stand and free samples’ they said; ‘If you build it, they will come’.”
Sadly, the reality of a food entrepreneur isn’t quite as straightforward as ‘Field of Dreams’. The first time we invested in a run of trade shows, we spent, on average, 25,000 euros per event. To a multinational corporation that may be pocket change, but to a food start-up like us, it was an enormous investment.
Out of the hundred or so leads we picked up at each show, most seemed to be the employees of major food companies. They were wandering around during breaks in their promotional efforts, spamming the booths of unsuspecting start-ups like us. Quite a few were genuine buyers who had been invited there by their current suppliers for a free lunch. On average, we made a few thousand in revenue from each of the shows. With outgoings of over twenty thousand, they genuinely equated to some heavy losses.
If the goal of a trade show is walking away with a long list of leads, that is possible. It depends entirely on how laid back you are with your qualifying methods. Grilling potential customers might not seem like a friendly practice, but done skillfully, it will save you a lot of time and money down the track. Someone handing their business cards out like candy can walk away with an impressive lead list only to be sadly let down by low conversion rates.
Given that the entire purpose of the show is to link buyers with sellers, you would think that conversion rates would be at least a few percent. According to lohre.com, though, the conversion rate on trade show leads is 0.55%. With such slim pickings, you might consider putting those resources into a well-planned marketing campaign instead.
I have quite a few colleagues in the industry who tell me that trade shows and exhibitions are more about brand awareness than about actual sales. I can’t help thinking, though, that there are cheaper and more effective ways of reaching SME food B2B buyers without spending tens of thousands of dollars, not to mention the time and labor involved.
The food industry is evolving quickly. Is it possible that the very concept of grumpy older men making big contracts at trade shows is becoming outdated? The organizers of these events do seem to gear up their promotions toward start-ups, but sadly the reality is something completely different. By the time you have forked out for airfares for your team, hotels, travel, food, promotional resources, and an extortionate entrance fee, you are genuinely in the red before you even begin.
If brand awareness is the key, then surely these days, Instagram is the platform of choice. You can easily reach buyers within moments and for pennies. It might not be a bricks and mortar promotion where you get to shake hands with people, but how relevant is that these days anyway?
I would personally like to see trade shows move online. Perhaps there is some platform for this already? But these days surely there isn’t much you can do in an oversized church hall that you can’t do on the world wide web. Unless you are in the business of routinely complementing people’s ties as part of your dinosaur sales pitch, I don’t feel it is worth it.
There is a valid argument that a handshake is worth a million emails. I would agree with this. But the handshake must be taking place with a genuine buyer. If it isn’t, why take the risk that they haven’t washed their hands?
Trade shows may once have been the heart and soul of the food industry. But things have changed, and matters have become more complicated. Could it be that these events are a way for employees of old-fashioned organizations to have an expensive company-funded holiday? Or could it be that trade shows are valid in many industries, but not in the food industry anymore?
Perhaps the poor results from the hundred or so events we attended were just a coincidence. Maybe they are usually more effective, but I doubt it. You could argue that trade shows have never been set up to benefit participants, but to line the pockets of the organizers of the event. They collect extraordinary fees from both buyers and sellers. It makes me wonder if somewhere out there in this strange world, there is a trade show for trade show organizers.
As a food entrepreneur gazing into the black hole that is trade shows — I would advise that you think very carefully. Before you begin, please consider the options that are available to you via the internet instead.
In the words of Bill Gates –
‘The internet is becoming the town square for the village of tomorrow.’
With such a vast town square available from the comfort of your own office, why put yourself through the business version of Survivor for such meager returns?
My writing is based on true events and stories. It is as real as it gets. I changed parts of the stories and excluded real names, as I don’t want people to get hurt. But most of the stuff I write is authentic and includes my thoughts and feelings.