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The Decision to Exhibit: Are Trade Shows Still a Wise Investment in the 21st Century? As we’ve gone through unprecedented times in the global economy, our sense of “business as usual” has changed forever. The entire way we do business has undergone a major overhaul with every expense requiring solid justification and many new alternatives coming to the table. Exhibiting at trade shows can be a hefty investment between the space costs, freight, setup, displays, travel, housing, food, sponsorships and staff, etc. However, regardless of what tactics are used, generating good sales leads and building relationships as well as strong brands remains important to all companies. So the real question is: Do trade shows still make sense against this backdrop of tumultuous change? This document will explore this question and offer some perspectives to consider when making the decision to exhibit at industry trade shows. Who is Participating in Trade Shows? When the Trade Show Exhibitors Association (TSEA) released the results of their 2009 Exhibit Management Survey, trade show budgets reportedly declined, but not as dramatically as one might expect during the economic crisis. Theories of trade show survival point to the fact that they are still a primary means for generating qualified sales leads and are reported to save money and time from the first meeting to the closing of a deal. TSEA’s recent survey findings1 include:

• Exhibitors attended an average of 30 trade shows in 2008 and expect to attend 25 in 2009

• Trade shows will account for one third of an organization’s overall

marketing budget in 2009

• Budgets for exhibiting will decrease from an average $459,100 in 2008 to $381,000 in 2009

Specifically within the music products industry:

• 86.8% of Commercial NAMM Members exhibited at the 2009 NAMM Show

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• 70% of NAMM exhibitors cited “brand and relationship building” as the top reasons they exhibited at a NAMM trade show, with writing orders and concerns about competitors exhibiting coming in third and fourth

• 95.1% percent of NAMM attendees said the products they see at the NAMM Show influence their buying decisions for the year ahead

In the midst of economic uncertainty, the exhibitors at the 2009 NAMM Show and 2009 Summer NAMM seemed to be pleased with their investment: “Obviously with everything going on, I was a little skeptical going into the show, but Friday and Saturday were very busy days for us—I was very pleasantly surprised. We talked to a lot of new dealers and people in general were happy that we were here this year.” – Dave Jewell, Yamaha Corporation “We had an amazing show. Going in, we didn’t know what to expect, but we came here, and it absolutely kicked butt. During the show, we took orders and it was incredible and just a really great show for us.” – David Koltai, Pigtronix “The show was actually much better than we thought it would be. Traffic was good, we wrote some orders, did some business. We almost didn’t come out this year but at the last moment we decided to and we’re very happy that we did.” – Pat Park, Ernie Ball

"We had a great show. I didn’t know what it would be like coming in, but we were really pleased with all the traffic and the attention at our booth.” – Michael Upton, Kala Ukuleles,

Why Exhibit at Trade Shows? In the Center for Exhibition Industry Research (CEIR)-produced 2009 report, “The Cost Effectiveness of Exhibition Participation,”2 it was stated that:

• The cost of making a first face-to-face contact with a potential customer cost $215 with an exhibition lead, compared with $1,039 without one. These show visitors present many opportunities to capture qualified leads without the cost of contacting and identifying a prospect.

• The cost of a closing sale takes into account the above-mentioned cost

of making contact and adds the cost of calls, totaling $2,307 to close a sale with an exhibition lead—$795 less than without a lead, which on average totals $3,102 to close a sale.

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• 67% of respondents agree or strongly agree that exhibitions increase corporate and/or brand recognition.

• 63% agree or strongly agree that exhibitions help in gaining or retaining

market share.

• 66% agree or strongly agree that fewer sales calls are need to close a sale with an exhibition lead because of the buyer’s face-to-face meeting with staff at the exhibition.

• 68% agree or strongly agree that fewer sales calls are necessary to close a

sale with an exhibition lead because they have seen the product on the exhibit floor.

• 54% of sales that started with a lead from an exhibition are closed after

three or fewer sales calls, as opposed to 61% without an exhibition lead that require more than three sales calls to close.

2009 Summer NAMM exhibitors who were new brands in the market, brands with smaller market share hoping to grow or existing brands launching new products believe that trade shows are essential in building a buzz: “We’re a new NAMM Member, and this is our first time exhibiting. We had a phenomenal response to the product. A lot of retailers are excited to see new products here to grow their business. We signed up a handful of good dealers here, and we were excited to immerse ourselves in this industry and use this experience as a building block for our presence in the music business.” – Al Ingallinera, Beamz Interactive

“This show has been terrific—we’re so glad we came. We were worried that it may not be as good a show because of all the naysayers, but the people who said that turned out to be wrong. We’ve had people coming by, a lot of excitement, a lot of action. In a down economy, there’s an opportunity—while others are pulling out you jump in and make hay while the sun shines. We’re kind of glad some of the big companies made a mistake in not coming because it was good for us.” – Steve Skillings, Breezsong “We didn’t know what kind of expectations we should come with this year, but we were happy. We wrote orders, saw the buyers we wanted to see and did very well. I think, because some of the larger brands decision to stay home, companies like ours did even better.” – Phil Bettete, Yorkville Sound

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Who is Attending Trade Shows? Despite changes in the economy and in Web-based sales, Creative Training Solutions states that “trade shows and similar sales and marketing events have withstood the test of every technological revolution because people buy from people,” here noting some of CEIR’s past findings3:

• 46% of executive decision makers made purchase decisions while attending a show

• 77% of executive decision makers found at least one new supplier at the

last show they attended

• 76% of executive decision makers asked for a price quotation at the last show they attended

• 95% of executive decision makers meet with their current suppliers at a

trade show

• 50% of the audience wants to see what’s new in products and services For these reasons, trade shows are an important part of any company’s marketing mix. The allow businesses to create and maintain positive market relationships. Those events that provide opportunities for education, networking and access to the latest products are effective in drawing attendees who will take advantage of this time, as a value for them, and who are informed and ready to buy or at least make purchase plans: "I am making a point to buy and do a lot more orders at Summer NAMM than I have in the past, just because some of the bigger vendors that I deal with didn't show up this year. So I'm trying to reward as many of the vendors here as I can. I feel this show is very important. A lot of us on the East Coast don't get a chance to come to Anaheim, but we can almost always come to the summer show and bring our staff as well.” – Brian Hanson, B's Music

“It’s great because I have a new store, and kids love all the latest gadgets and stuff. So finding cool new products that you can’t see anywhere else will really differentiate us from the competition.” – Glenn Grenanya, Drum Shop “It’s been very good for us—we’ve made some contacts in the piano division and now we’re in the school instruments section. We’ve been making contacts and meeting old friends. We’ve been searching out new products and having a good time.” – Sheila Alain, Lauzon Music Centre

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How Do Shows Attract Qualified and Proactive Buyers?

Shows that offer progressive, innovative informational sessions, along with plenty of opportunities to network with other like-minded individuals, are going to attract the most relevant audience. Quality more than quantity is important when you are exhibiting and looking for buyers who are enthusiastic, positive and ready to make a purchase. The stronger your industry retailers are, the better your business is going to be.

(From 2009 Annual NAMM Member Survey4)

• Ideas

“I thought the session was extremely beneficial from both a business and personal standpoint. We’re going to use 90 percent of the ideas and concepts he suggested and apply them to our business immediately.” – Tony Johnson, Blues Angel Music

• Education

“I go through the schedule every year before I come out here and pick the specific sessions that I can fit into my schedule—anything from sales training to store design to Internet. Everybody here at the show should be, in my opinion,

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sitting in here a lot because there are so many good things that you can get out of it. Sometimes it’s almost an overload of information, so you have to go through and pick out the ideas you can implement.” – Bruce Bannister, Samuel Music Co.

• Networking

“I liked listening to the other retailers and hearing what they were doing. It kind of reminds that I need to be a little more enthusiastic in what I’m trying to do.” – Rick Gardner, Red River Music Company • Planning “We’re a very new business, so it’s our first NAMM Show. We’re just enjoying seeing all the many things that we can sell in our store, trying to figure out how to get started the best way. The educational sessions have been extremely helpful, and I feel like being here will make a huge difference in 2009.” – Janet Ruiz, North Bay Guitar

Purposes of Exhibiting • Brand Visibility Brand awareness begins with people initially learning about the existence of a company, seeing the brand name and images, and making their first contact with the brand. Whether information is distributed or passed by word of mouth, if your booth is positioned at a trade show where your target market in is attendance, then you have taken one large step in getting noticed. While an ad in a publication or a direct marketing piece could be buried in a pile, your trade show booth faces every passerby at one point. “We’re very pleased with the steady traffic that has been visiting our display at the NAMM Show within minutes of the show opening. Dealers are eager to see new products and new technologies. Everybody is anxious about 2009 and yet there’s an underlying confidence in the value of music and the need for music products in our country right now more so than ever before. Roland Corporation is very pleased with the attitude of retailers and we’re responding to their needs with products and programs to help everybody navigate through this time of uncertainty and economic challenge. Roland is confident, optimistic and moving forward, full-speed ahead.” – Dennis Houlihan, Roland Corporation U.S.

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• Face-to-Face Meeting If you are at an event with your target audience, the decision makers will be among the attendees, so they can see and touch the product, ask questions, give feedback on site and share their experience with others afterward. The value of impact of the face-to-face meeting with several qualified attendees in one place is oftentimes going to bring a bigger boost to product orders and your bottom line than a one-dimensional advertising piece. This booth traffic can be quantified with scanning machines to record visitor numbers and information. All booth visitors will not be the same—walk-by traffic can bring prospective buyers. For this reason, make sure your booth staff is trained for people who are new to your brand, as well as those who are familiar with it. “I think if you’re here exhibiting your products, you’re being proactive and showing your customers and the world that you want to do business. We’re not complaining about it—we’re doing it…and so far today we’ve had a lot of traffic.” – Stephan Fyock, Numark Industries

• Prospective Buyers As noted in CEIR’s report, closing a deal is more effective when qualified leads at a show meet with staff and get to see products firsthand. Time and travel expenses add up and at the show, if you can interact with prospects and close some of those deals, this is the true value of the trade show. Trade shows are part of your marketing mix but accomplished through the direct sales force. “We’re getting a lot of floor traffic and musicians are out playing the gear, and that’s what we want. You can see it’s a non-stop flow of people, which is what it’s about. Right now everybody’s kind of looking, but we’ve written a few orders, and it’s only day one." –Mike Van Tine, Musical Distributors Group • Customer Meetings Active customers who are at the show save money on travel and other expenses related to meeting in person in the effort to build the current relationship. “We thought it was important to be here to respond to our customer’s needs and provide what they’re looking for. For us it was an awesome show. We got a lot of great orders this weekend so that was a really nice surprise.” – Ron Manus, Alfred Music Publishing

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• Other Opportunities Many attendees at shows are there based on partnerships, and are looking for other companies to build, whether it’s for an advocacy event or other promotion. In addition, exhibitors are able to see what other products are on the market and develop an awareness of the industry they are in. Most trade shows offer opportunities to work with media, promote products in a guide and help buyers get to your booth with publicity in advance of the show. While the value of these activities is lower than that associated with creating new customers. “We've been very pleased with the attendance from our dealers—it's exceeded our expectations. It's been the most active booth we've had in the seven years I've been [here]. The black nickel trumpet was just introduced this year—we appreciated the honor of it being acknowledged in ‘Best in Show.' The awareness was great, and we got a very good response from our dealers.” – Randy Huey, Antigua Winds As many people say they come to the show to meet with their established suppliers, so an exhibitor’s work begins before the show—by using these show resources and marketing tools, as well as creating awareness in the industry through magazines or direct mail, accessing and contacting to the show’s buyer list and establishing show specials or promotions that attract existing buyers and potential customers. Empowering and Educating Exhibitors for Success Trade shows allow companies the opportunity to influence attendees’ perspectives of the brand. The true value of a show for exhibitors is based upon how they handle the marketing before, during and after the show. For a company to be satisfied with their return on investment, they need to make the most of the many opportunities to reach out to customers and hold effective meetings. The return on investment grows with the effort on behalf of each company. Exhibitors for their part need to be educated about the opportunities, the identification of qualified buyers and the best ways to initiate conversation with potential buyers walking the floor. From there, exhibitors need to develop a plan, define specific goals and train staff for the event.

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Benefits of Exhibiting at Trade Shows Specifically for NAMM trade show exhibitors, the association offers many exclusive opportunities to make exhibiting a cost-effective and successful venture:

• NAMM proudly leads the industry in controlling trade show costs and providing the best sales opportunity for your dollar—the $28-per-square-foot booth cost remains unchanged from last year’s pricing

• Drayage fees for the NAMM Show are unmatched anywhere: Exhibitors

requiring no special handling receive a 1,000-pound drayage allowance per 100 square feet of booth space—for most, that equals FREE drayage!

• Access the most up-to-date business information that you can't find

anywhere else

• NAMM's FREE interactive floor plan helps promote your show plans and product—before, during and after the show

• The interactive floor plan helps buyers find you on the show floor

• Pre-show promotion in the NAMM Show Supplement, PLAYback and on

www.namm.org draws new buyers to your booth

• The NAMM staff provides the best level of service of any trade show—we'll help you every step of the way

• Helps build brand equity and mindshare with 85,000 attendees from

across the globe

• Receive exclusive NAMM Member deals and discounts on hotels and in the Anaheim community throughout the show

• Free PR—bring your information to the press room for the domestic and

international press to review, build relationships with 1,000 media attendees who are eager to write about your products

• NAMM will Twitter your events and special booth activities during the show

on the much-followed NAMM feed, giving you additional immeasurable exposure

• Take advantage of more than 50 Idea Center sessions offered throughout

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the show for no additional fee—this kind of education would cost you thousands of dollars outside of NAMM

• Meet with several buyers all at once—no need to fly around the country or

spend money and time over lunch With the costs of leads and all other benefits considered, it is important to remember that personal interaction is absolutely essential in building and growing a business—and trade shows exclusively provide this opportunity. It is said that people prefer to buy from people, and trade shows are a time-efficient way for a manufacturer to build market share, put a face with a name and make purchase plans for the future. Conclusion NAMM’s research demonstrates that trade shows make more sense than ever in this changing economy. Whether it’s to prospect for new sales leads without cold calling, reinforce existing business relationships or demonstrate new products in a controlled presentation environment, more companies continue to make the decision to exhibit at trade shows. As the business model adapts, the costs of doing business still point to this form of marketing and buying/selling as high value for companies of all sizes within the international music products industry. References 1 Trade Show Exhibitors Association (TSEA), 2009 Exhibit Management Survey: http://zoomerang.wordpress.com/2009/03/30/spending-on-trade-shows-is-down-the-value-remains-indisputable/ 2 Center for Exhibition Industry Research, The Cost Effectiveness of Exhibition Participation 3 Creative Training Solutions, The Purpose and Value of Trade Shows: http://www.creativetraining.com/train/docs/Purpose.pdf 4 2009 Annual NAMM Member Survey, conducted by Research USA Feb.-March 2009