Investing in Trade Shows
Franchise shows were the champions of recruitment during the 1980s and early 1990s. Franchisors effectively sold owners throughout the U.S. by "working the circuit" 40 weeks a year. Buyers flocked to these events, excited to meet franchise executives face-to-face and get the direct scoop about their opportunities. These convenient showcases provided entrepreneurs with a great personal experience to learn, evaluate, and buy a franchise business in their own backyard. For franchisors, these events were an ideal recruitment tool for building target markets.
Then, a combination of events shattered the marketplace and threw trade show selling into a tailspin for several years: over-saturation of franchise shows and the discovery of the Internet for investigating franchise opportunities. Buyers could now kick back, fire up their computer, and get instant online access to franchise information in the comfort of their own home. The Internet became the "remote control" for franchise shows! Why battle traffic, parking spots, travel costs, and admission prices, if you didn't have to? Consequently, attendance plummeted and U.S. franchise shows faded away, with the exception of the annual IFA show in Washington, D.C.
Then bang, shows rallied back into the limelight. As the year 2000 approached, entrepreneurs rediscovered these franchise events. Consumers began turning off their technology as franchise shows returned to town. They once again embraced the power of this live venue, which offers personal experiences and interaction with the people behind the franchises. It turned out that the bricks-and-mortar show environment could never be replaced by online commercials and automated emails.
Which trade shows are right for you?
Not only are franchise opportunity shows productive, but industry-related shows can also work to increase sales. A cleaning franchise successfully recruited additional operators by exhibiting at their industry's expos. An advertising service also struck pay dirt at a major marketing exhibition, recruiting industry candidates considering their own business.
Since the early 1980s, I've exhibited in numerous franchise trade shows and seminars with both service and retail concepts. Results ranged from great to bad, depending on the quality of the shows and attendees, the markets where the event was held, and the concepts I was selling. Overall it was worth participating, as we awarded more than 100 franchises as a result of exhibiting at these events. When selling an automotive franchise, we sold multiple new owners at almost every event.
Are you ready to exhibit yet?
Caution! Make sure you are well prepared to exhibit at a show. If not, you can make critical mistakes that will cost you sales opportunities. First, attend a show before you participate. Walk the aisles, note the better booth designs and props that are attracting attention, observe how sales people are approaching visitors, how they ask questions and present their concept, and how they get interested candidates to complete inquiry forms. Pick up any handout materials to get a sense of what may be appropriate for your business. Check out the food franchises that offer samples of their sandwiches, ice cream, cookies, smoothies, and other products. Will it be worthwhile for you to display or pass out some of your products? Should you bring your service van as some do?
Every year, over-anxious franchisors pull the trigger too soon, signing up for a trade show without proper preparation. Occasionally start-up franchises participate before their franchise program is ready to market. Results are usually disastrous. This is your "coming out party" for your concept, so make sure you are at your best when you hit the stage. Bad reviews spread fast.
How to buy trade shows
Get as much information as you can before investing the time, staff, and money in a trade show event. If you haven't yet experienced exhibiting at a show, here are telling questions to ask before you decide to sign up:
1. "How many years have you been producing shows?" If the show group is new to the business, stay away until they have a track record, or put down only a very minimal deposit up front. You may not get your money refunded if they fail to get enough exhibitors and never hold the event. As I was writing this, several franchisors had just "been taken" by a new show producer who had failed to open his first two events.
2. "How many years have you been producing franchise shows?" If they are new to franchising, also be cautious... producing a franchise expo is much different than producing an auto show.
3. "What is the average attendance of your shows?" Franchise shows should generate between 2,000 and 6,000 attendees to be considered; and seminars from 30 to 100 attendees. Anything less is usually money wasted.
4. "How many dollars are you spending on promoting this show, and what specific media will you be using?" If you don't get a clear answer, don't sign up! Franchise opportunity shows typically spend $50,000 to $150,000 for local market expos, and in the millions for national and international events. Small seminars sponsored by participating franchisors should spend at least $10,000.
5. "What other ways are you marketing this show?" Better show groups often will get key organizations within the market involved who will support and promote the event to their audiences and customers, generating more attendance and credibility for the show. This may include the local SBA office, Small Business Development Center, the city's business or economic development department, local newspapers, business journals, magazines, banks, etc.
6. "What are the demographics of your show attendees?" Be sure to ask the sales person this question before they find out your qualifications, otherwise they'll tell you what you want to hear! Professional show groups know the entrepreneurial interests and financial profiles of their attendees, carefully tracking this information through sign-up questionnaires. Vague responses to this question should trigger a red alert about the potential quality of the show.
7. "What franchisors have exhibited at your show? Which ones have made sales? Who in similar business categories and investment levels have done deals? Please provide me with contact information for some of these companies." If getting franchise references is a problem from an experienced show group, then abandon your discussion and, again, shove your wallet back in your pocket.
This is an excerpt from my Amazon.com best-selling book, "Grow to Greatness: How to build a world-class franchise system faster." To order copies, click here.
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