Is exhibiting at a startup conference worth it?

Background:

A few weeks ago, I wrote about how Profitual was going to our first conference as an exhibitor with a booth. An 8-thousand-dollar booth, bringing 4-team members, and staying 3 nights, represented both a massive opportunity and a considerable expense for our startup. Being it was our first time presenting at a tradeshow booth, we weren’t quite sure what to expect in terms of engagement and how to tie this to the goal of new sales. I’m sure this is something most early-stage start-ups encounter and as such I wanted to share our findings:

How many people did we speak to?

At the highest level - we wanted to talk to everyone at the conference: Founders, start-up employees, accelerators, incubators, funders, investors, and generally anyone who works with or around start-ups (who are our target customers).

We spoke to a TON of interesting people but in the end, we captured the contact information of 68 unique prospects. When we looked at the breakdown of these prospects, we broke them down into three buckets to figure out how to engage with them post-conference:

Customers: Start-ups we were looking to sell directly to,who also fit our ICP

Investors: VCs that could either refer us to customers or potentially invest in Profitual

Partners: Accelerators or service providers who saw a mutual benefit in working together

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The breakdown of contacts looked like this:

Customers: 45 (66%)

Investors: 10 (15%)

Partners: 23 (19%)

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We weren’t expecting these connections to convert on the trade show floor (they rarely do) so we’ll be spending the next few weeks(months) following up to see what we can get closed.

What surprised me?

People just stopped by the booth to talk about what we are up to and if it made sense to continue the conversation after the conference. We spent a lot of time before the conference trying to pre-book demos, but we got even more traction just by meeting curious folks attending the conference! I didn’t expect that level of interest!

Also didn’t go through the level of free swag we thought we might. We left for Ottawa with three suitcases full of T-shirts, hats, sunglasses, and pens. We came home with two….

How to Calculate ROI:

There are many ways to calculate ROI of a conference. While I know that general brand recognition and meeting new connections is great forthe overall longevity of Profitual, I like to focus on the actual sales achieved. With that in mind, the simplest way to calculate ROI would be:

ROI=Event Revenue/Event Expenses

In this formula anything over 1.0 would be considered a positive return on investment for the conference. A nuance here is that since we sell software on an MRR pricing model it doesn’t make sense for us to look purely at revenue generated in the month the conference happened. This wouldn’t consider the successive months that we would be billing each new customer. For this reason, we would look at Customer Lifetime Value (CLTV) to compensate for this nuance. So, if we price a customer at $99/month and we expect them to stay with us for 3 years, their CLTV would be $3,564. The formula to calculate event ROI would then look like this:

ROI=CLTV/Event Expenses

Was it worth it?

The entire cost of the conference (event expense) with everything included was around $15K. This means that we know the denominator oft he ROI equation. Next steps will be to figure out how many new sales we can generate using our Customer Lifetime Value (CLTV) formula, and then we’ll be able to figure out if we have a positive event ROI.  Overall, we feel really positive about the event and feel like if we can close a few sales & partnerships, it will be a resounding success!