Management Perspectives: Using Co-op To Fund A Customer Show
Jul 1, 2006 2:31 PM, By Don Kreski
How Advanced AV put on it 3rd annual Convergence Technology Conference in May
“Our goal is to get the top level people at this event, those who make the decision on the purchase of AV systems,” says Dennis Krebs, marketing manager of Advanced AV, speaking of his firm’s customer expo. CTEC, Advanced AV’s annual “Convergence Technology Expo and Conference,” is an expensive show, one that would not be possible without extensive vendor funding. How Krebs made the funding happen is an interesting and instructive story.
CTEC 2006, held May 11 at the Valley Forge Convention Center near Philadelphia, offered attendees 16 seminars, breakfast, a luncheon with keynote speaker, a large exhibit area, snacks, and door prizes. The show’s budget was more than $100,000, a figure that Krebs says was well worth it. “Events like this seem to be the most effective form of marketing,” he explains. “We’ve done generic mailings and mass media advertising, but if we really want to connect to the end users and decision makers, we need to collaborate with them, develop relationships with them, and educate them.”
When I was a marketing manager at Chicago area AV dealerships, I ran several shows of roughly this size. One of my goals was to bring in enough vendor funding to pay for all of the shows’ hard costs, a figure that I calculated as roughly half the real total. “The soft costs for something like this are considerable,” Krebs says. “When you have your top people meeting every other week for eight months, plus the hours spent on planning, promotion, calling customers, and then almost the entire company shut down for two days of set up, you can see where it adds up.”
Beyond the overhead cost of staff and sales force, Krebs had to worry about a significant promotional budget. He says he used mainly direct mail, targeted email, and telemarketing to bring customers to the show. “Our initial mailing was to 5,000 of our customers plus 20,000 prospects. That’s what we felt we had to do to secure 650 pre-registered attendees.” The most significant hard costs, however, came from the convention center, for exhibit and seminar space, food and beverage, and labor. Krebs used a variety of cooperative offerings to bring in support from 68 vendors.
Finding the funds
Krebs says the vendor sales effort went very well. “We had incredible manufacturer support,” he says. “It wasn’t too hard for us to get everyone onboard.”
Krebs used sponsorships as his major co-operative device. He sold six “premier” sponsorships, each of which included a 10’x20’ booth and recognition throughout the event, including the vendor’s logo on event tickets, signage at the show, and advertising on the show website, mailer, digital signage, and rich media. He also sold six event-specific “main” sponsorships, including sponsorships of breakfast and breaks, lunch, the Internet lounge, literature bags, t-shirts, and ipod give-aways. Each of these sponsors received a 10’x10’ booth. Vendors could also choose a “supporting” sponsorship, which gave them a 10’x10’ booth and a listing in the mailer and show website.
Vendors could also donate door prizes, which gave them an additional opportunity for recognition by customers.
Krebs says that he approaches his vendors in much the same way that any salesman would approach a good prospect. For Advanced AV and it vendors, the show is a win-win.
Vendors, who draw on traditional co-op programs or various discretionary funds, will typically pay by check or credit memo, but sometimes they propose some alternate form of payment. “For example, we had the Crown truck, the Mid Atlantic truck, and the SoundCraft truck at the event this year, and we counted the fact that they brought these trucks as their reimbursement.”
There’s always a need for loaner equipment at this kind of show, including projectors, sound systems, and screens for each of the seminar rooms and the keynote. Krebs says providing loaner equipment was also a way of paying for participation. “Draper’s really good. We get a lot of screen loaners from them,” he says.
“The costs of a show like this are just astronomical,” Krebs says, “especially when you move to a convention center.” On the other hand, it’s generally worth it for all concerned. “Some AV companies find success without a dedicated marketing function,” Krebs explains. “But I really think the right marketing strategy can help take an AV company to the next level. The AV business is all about relationships, and a show like this can help position your company as a leader in the industry.”
Questions on marketing or co-op? You can reach Don Kreski at www.kreski.com/contact.html.