|obody likes hearing the word "no." Whether it's a teenager hearing, "No, you can't have the car tonight," or a husband listening to a wife explain that, "No, you are not displaying your beer-can sculpture on the fireplace mantle," the word "no" is no fun.
Not surprisingly, then, many people - including
exhibit managers - tend to abandon hope at the mere mention of the word. When management says, "No, you can't add a hospitality event to your program," or "No, we don't have the money to hire Jay Leno to do standup in the booth," some exhibit managers might put up a decent argument, but most eventually acquiesce and give up on their quest.
Brandon Gross, however, isn't like "most" exhibit managers. As event coordinator for FoodMatch Inc., a New York-based provider of Mediterranean foods (think imported olives and antipasti), Gross was told, "FoodMatch would certainly benefit from a new booth, but given the economy, we can't allocate more money to the exhibiting budget." In spite of management's disheartening directive, Gross decided that if he couldn't get additional money to buy a new booth, he'd find the money within the budget he already had. Somehow, he'd cut 14 percent of his trade show budget and reallocate those funds to build a new booth. For Gross, "no" didn't mean "no." It meant, "Find another way."
The following pages offer you an inside look into Gross' cost-cutting strategies, which allowed him to buy that new booth and improve effectiveness without a single additional dime from management. EXHIBITOR also offers
some of the best suggestions
that exhibit managers have shared with us over the years. Granted, you might not need to reallocate your budget to build a new booth. But who knows? Maybe you, too, can cut costs, work a little magic with the funding you've already got, and turn management's "No, you can't" into "Yes, I can!"
The Secrets of Cost Cutting
Before learning how Gross cut costs, it's important to understand a little more about why he wanted a new booth in the first place.
When Gross came on board with FoodMatch in 2004, the then eight-year-old company had just formed a small - and somewhat green - marketing team. As such, event planning wasn't the sole responsibility of one person;
rather, the department used an all-hands-on-deck approach. Nevertheless, FoodMatch knew it needed shows to help it generate awareness and stake out a place among competitors.
In fact, it planned most major product launches to coincide with the Winter or
Summer Fancy Food Shows. But given the size of the marketing staff and the myriad tasks assigned to them, it was all they could do to send a pallet of products and some tablecloths to the shows, ultimately turning their 600-square-foot space into a sampling station.
While Gross and his team made small but effective changes to the program between 2004 and 2008, the booth wasn't giving off the same "authentic, fresh, and Mediterranean" vibe as the FoodMatch brand. So in late 2008, Gross received management's approval to build a new exhibit for 2009. Unfortunately, the economy imploded shortly there after, and management pulled the plug on the new booth. "But for me, that meant that if I could find the money from within my existing budget, I could still build my booth," Gross says.
And that's exactly what he did. After figuring out about how much he wanted to spend on a new booth and determining that the price tag was roughly 14 percent of his yearly exhibit-marketing budget, he employed the following six cost-cutting strategies, scrounged up the money from within his existing budget, and reinvested those dollars into the booth that FoodMatch launched at the 2009 Winter Fancy Food Show.
1 Buy, Don't Rent
"New exhibit managers have a tendency to use the exhibitor manual as a shopping guide," Gross says. "If they need some ancillary items like tables, chairs, etc., they scour the list of rental items offered by show-appointed vendors,
check off those items, and send in the forms. Many people don't stop to compare the costs of renting those items versus actually buying and reusing them. Or, they assume that shipping owned items to a show will cost more in the long run than renting them on site. When I started looking
for ways to cut costs, I quickly realized that owning a few key items would save us a ton of money compared to renting those same items show after show."
At most shows, FoodMatch had been renting a 2-cubic-foot refrigerator (that was barely big enough to house 24 cans of soda) to hold its perishable items. "Normally, I simply paid a $400 rental fee per show for the cheapest refrigerator offered," Gross says. "But in 2009, I realized that I could buy a 4-cubic-foot refrigerator for only $200. I could literally buy a refrigerator for every show and throw it away afterward (not that we actually did that). But discarding purchased refrigerators would actually save us $200 per show."
So for his 2009 show calendar, Gross purchased a $200 refrigerator. And to all but eliminate added shipping and drayage costs, FoodMatch used the refrigerator as a sort of heavy-duty shipping crate. "We stored all kinds of items inside the fridge during transport, so in a sense it actually took the place of a crate we'd normally ship anyway," Gross says. "Even if we only exhibited at six shows per year, the strategy put $2,000 in our pocket."
Additionally, Gross decided that rather than rent cheap folding tables and display racks at shows, which did nothing to imply a sense of authenticity, he'd buy them as part of the new booth. "We purchased seven natural-wood console tables for $300 apiece," Gross says. "The legs unscrew and nestle into the underside of the tabletop for flat shipping, and they're super durable so we can use them for years. We also bought some stainless-steel racks to display products in clear glass jars."
The tables' wood tones oozed "natural," while the metal stands screamed "high end." And even with the additional shipping and drayage costs to get the items to and from shows, Gross estimates that by purchasing these items instead of renting them, the company saved more than $2,000 per year.
As Gross scoured his budget, he hit upon a major expense - staff hotel costs - and decided to do a bit of sleuthing. After talking with several hotel managers, he realized that by negotiating with hotel management, he could decrease staffers' hotel costs by about 20 percent per year.
"When it comes to hotels, I never pay what is originally quoted," Gross says. "Either I negotiate a lower fee, or I negotiate for added amenities that would have hit us in the pocketbook anyway."
Typically, Gross checks the room rates at official show hotels. If he's satisfied
with one of these rates along with the location of the hotel, he contacts the hotel to see if he can get any services - e.g., parking, Internet access, business services, shuttle service, etc. - for free. If he can't negotiate with the hotels - or he doesn't like the show hotels' pricing - he goes outside of the room blocks but uses room-block pricing (or low rates he's seen online) to negotiate rates.
"For example, if I can't get the price or services I want at an official show hotel," Gross says, "I'll find a hotel that is close to the convention center and offers the amenities my staff expects. I'll then call the hotel management and quote them the show-block (or Internet) pricing, tell them how many rooms I need and for how long, and ask them to beat the price. For those hotels that can't change their prices, I'll ask for services for free. Most hotels will easily come down 10 or 20 percent off of their typical rates, especially since they're not an official show hotel and are already missing out on a big chunk of that business."
Gross suggests that you're polite but also upfront in your negotiations. "I might say something like, 'We really like your property, but in order to justify this to management, I need to bring down the price by 10 percent. Or I need to get some of the typical business-services fees waived. If you can do that, we'll stay here. If not, we'll go elsewhere.'"
3 Ship Small,
"While digging for hidden savings, I also examined just how much I was paying for shipping through the show's preferred carrier,
and analyzed that cost
against what we'd be charged by my company's regular shippers, i.e., the transportation companies we use to move our products," Gross says. "The typical rates were $1.25 per pound for the show carrier, and about 80 cents per pound from our own carriers. Given the cost difference, I very rarely use the show carrier anymore, and I've cut our overall shipping costs by at least 10 percent."
Since FoodMatch ships its products all over the United States, it has an ongoing relationship with a handful of transportation carriers, which value the company's business. "So I contacted one of these carriers, provided very specific instructions about our shows, and requested that I get the name and cell-phone number of the driver for all of my shipments," Gross says. "I also asked that I have the same driver for as many shows as possible. Now, whenever I plan transportation for our shows, I'm very specific with the driver about what's involved, and I'm extremely clear about wait times, explaining that we're happy to pay the hourly fees for doing so, but that under no circumstances is the driver to leave the wait line at a show without delivering our shipment. Because the carrier wants our continued
business, it's happy to meet my semi-unusual demands."
Gross admits that in many cases, there are definite benefits to working with transportation companies that are well-versed in the exhibit industry - after all, drivers need to understand the wait times involved, and that even a five-hour delay can completely throw off your I&D schedule. "But if you have developed a good relationship with a transportation company, you can usually communicate these trade show nuances and still rest assured that your shipments will arrive on
time - and in good condition," Gross says.
4 Pare Down
Gross also determined that he could cut shipping costs even more (and snip away some drayage costs to boot) if he simply lightened his load. While his exhibit properties weren't particularly heavy or cumbersome, his program was weighted down with hundreds of product samples.
"We were taking cases and cases of food to distribute as samples," he says. "Whether the products were new or old, popular or rarely purchased, we sent a case of everything. But during the later part of 2008, I started writing down what we actually used at each show. I discovered that of the 120 different items we offered, we maybe distributed an entire case of product for 50 of these items, which meant we were wasting a significant amount of product for 70 of our items."
The solution involved some legwork for Gross, but a serious savings for FoodMatch. Prior to each show, Gross brings a case of each product he plans to display into his office, where he breaks each of them open and removes exactly what he thinks the company will distribute at the show. "Sometimes I send the whole case," he says. "But most of the time I bring about half or one-quarter of a case to the show. I then consolidate products into the boxes so all of them are full. The portions of the cases that don't go to the show are then allocated to product sampling in our office (instead of pulling additional product for this in-office sampling)."
By carefully determining
what is needed at each show and taking a bit of time prior to each one to carefully plan and pack his shipment, Gross cut the amount of product shipped to shows by 50 percent - further decreasing shipping
and drayage costs by roughly 20 percent. And even if the company runs out of one or two items at a show, Gross doesn't see it as a problem. "When you're sampling 120 products, if you run out of five or six, the world isn't going to end," he says. "You can always send people product after the show, which is a nice way to stay top of mind with them."
5 Trim Down
"Meal expenses can easily get out of control," Gross says. "A hotel breakfast alone can run well over $20 per person for just eggs, toast, and coffee. So food and beverages were near the top of my cost-cutting list."
FoodMatch management generously encourages its employees to experience a variety of food and fine-dining experiences while on the road. "They figure we're a food company, so we need to keep up on the newest trends in food and restaurants," Gross says. "And for that reason - along with the fact that the company likes to 'treat' its employees after a hard day's work - exhibit staffers don't actually have a per-diem limit. The company reimburses any reasonable food-related expenses."
So to lean down food expenses and still allow people one "splurge" meal per day, Gross now makes sure that low-cost breakfast items and inexpensive snacks are readily available in the booth. Upon arrival in each show city, Gross makes a quick trip to a local Wal-Mart or Target where he stocks up on bottled water, granola bars, energy drinks, fresh fruit, etc. "I can get 24 bottles of water for $3 or $4 at Target; whereas at the convention center, you can't get more than three bottles for that price. And when healthy food is available for staffers in the booth, you've also got a convenience factor. They'd much rather grab an apple and a cold bottle of water (which costs me pennies) from our fridge than trek across the hall and buy these items for $5."
By simply making inexpensive snacks convenient for staffers, Gross cut his staff's meal expenses by a whopping 65 percent.
6 Order Show
"Costs for electricity, booth cleaning, and general show services really add up," Gross says. "So I knew that if I could nip and tuck even a few of these line items, I'd take a big bite out of my budget."
Gross first made sure that all of his show orders were placed before the earliest deadline, most often at a discounted rate. "For example, at some shows, if I purchased rented lighting prior to a specific date, installation labor was included in the cost," he says. This tactic alone saved him an estimated 20 percent on lighting fees.
Next, Gross took a look at the fine print. "If you read your show contracts carefully, you'll see that booth cleaning is often included in space rental for the night before the show opens - or at least it is at many of my shows," he says. "So that extra free day can cut my booth-cleaning fees by one-third for a three-day show - and that adds up over a year."
Electricity services also took their turn under Gross' microscope. "For a long time, I never really thought about my electrical orders," he says. "I just ordered plenty of wattage for various areas throughout the booth, and paid whatever was asked. But then I actually went through the manuals
of all of our electrical equipment and noted how much wattage each object required. Now, I order only the precise wattage we need and in the locations we need it. And of course I bring my own electrical power strips (instead of renting these from show services) so I can use the full amount of wattage I've purchased from each drop. Even if it means having a special area in the booth where staffers can charge their cell phones, I try to make sure that every watt I pay for is put to use."
Finally, Gross started paying careful attention to the speed at which his labor crews were installing his exhibit. While he used to hire a labor crew, offer basic instructions, and then leave them to their work, he now monitors the installation process and offers some "polite guidelines" about booth-installation time.
"I began realizing that what took me and another guy two hours to assemble in our office would take an entire labor crew four or five hours to complete at the show," he says. "So now, when the laborers arrive in the booth, I not only stay there to supervise, but I also give them a timeline. I might tell them, 'OK, we need to put these tables and the reception desks together, which usually takes me about 45 minutes.' Of course, I make sure that I've already assembled each item myself, so I know how long it should realistically take. But by giving them timelines, it shows them that: a) I have assembled the items myself, and b) They can't take three times as long without raising some eyebrows."
Employing these service-related tactics shaved roughly 15 percent off of Gross' show-services bills.
Poof! A New Booth!
When all was said and done, Gross cut 14 percent from his annual trade show budget. And with just two months to spare before the 2009 Winter Fancy Food Show, he reallocated all of those funds to the new booth and started buying components - including everything from a new back-wall banner and
refrigerator, to console tables and stainless-steel retail towers.
While the new booth was certainly on brand, and a huge improvement from the previous exhibit, this new look also garnered increased effectiveness. "Compared to our 2008
results, our leads increased by 14 percent in 2009," Gross says. "And given the influx of leads and show-related sales, our booth program is now paying for itself. Before, it was an expense we incurred as a way to generate awareness for our business. But today, it's a break-even venture at worst and a sales generator most of the time."
With little more than some research, ingenuity, and a "never say die" mentality, Gross not only turned a "no" into a "yes;" he also transformed a company expense into a profitable marketing opportunity. Now that's some trade show magic that'll have just about every management team saying "Yes!" E
SIX WAYS TO CUT COSTS
If you're new to the cost-cutting game, have no fear.
Here, we outline how to apply these steps to your program.
1 Buy, Don't Rent
If you don't rent refrigerators, tables, and shelving, you can still cut costs on rental items such as carpet, I&D supplies, audiovisual equipment, etc. Granted, given the weight and fragility of some items, renting at the show is a better option. But by simply running the numbers on every single object you rent, you'll likely find that owning is more financially feasible than renting.
Also consider purchasing items in the show city and donating them to charity after the event is over. This way, you don't pay the often-exorbitant rental fees, and you eliminate shipping entirely.
Finally, to condense your shipments into the smallest size possible, fill up all cabinets, desks, shelving, etc. with smaller objects. Any item with empty space inside it can be used as a sort of crate, and hard-sided items can protect your fragile items en route.
2 Negotiate With Hotels
Negotiate, negotiate, negotiate. Never be afraid to ask for what you want from a hotel, and be ready to take your business elsewhere if you don't get it. These days, many hotels are willing to go that extra mile to get your revenue.
Also consider building loyalty with a specific chain. If your staffers are all members of the same rewards program
and you stay at the same hotel chain at most of your shows, eventually you're going to get a night free for everyone. Plus, building loyalty with a hotel chain gives you more bargaining power when it's time to negotiate.
3 Ship Small, Ship Smart
Indeed, sometimes you absolutely need a specialized show carrier to safely and quickly get your exhibitry to and from the show. But given the potential savings, it's certainly worth it to look into other options - starting with a firm that your company already uses for other shipping needs.
Who knows? If you ship a ton of stuff to shows, you might be able to negotiate not only lower costs on your trade show shipping, but also lower, volume-based shipping rates for your entire company. Bottom line, don't limit your options, and keep in mind that relationships will go a long way toward getting the best price.
4 Pare Down Your Products
If, like Gross, you're shipping tons of products to shows to distribute in your booth, you can directly apply his strategy. But if you're displaying products (particularly any heavy or cumbersome items that are difficult or expensive to ship), take an objective look at how those products are used in the booth and whether they're critical to meeting your goals. For example, if you have a line of products, do you really need to display every color and size? Or, rather than sending your 2,000-pound cement mixer, might an interactive electronic display suffice?
Also examine whether people are truly interacting with the product (opening doors, touching fabric, etc.). If there isn't any interaction, chances are that an electronic version of the product (such as a 3-D rendering shown via kiosk or even a simple video presentation) may actually do a better job of accentuating features and benefits.
5 Trim Down Staff Meals
In addition to stocking your booth with low-cost goodies,
also consider adding group meals to your trade show agenda. For example, the night before the show opens is a great time to get the staff together for dinner and to go over last-minute booth-duty issues. Rather than allowing staffers to order off a restaurant's printed menu, work with restaurant management to create a customized, affordable
menu. This way, you can eliminate high-end selections from staffers' options and take control of at least one night's worth of per-diem expenses.
Also consider throwing pizza parties whenever possible for lunch or dinner. You can often order an entire large, multiple-topping pizza that feeds four for less than the cost of a single entree at a high-end restaurant.
6 Order Show Services Wisely
Overall, it pays to read the fine print - and to educate yourself about everything from how much wattage your electrical equipment uses to how long it takes to install each element of your booth.
Additionally, make sure you know what kind of equipment is required, and what is overkill. For example, do you really need that huge light wash from eight suspended light fixtures to highlight your products? Or would a couple of well-directed spots do the job even better? Is it truly essential that your presentation use a top-of-the-line sound system, or would a simple microphone and amp suffice? A little knowledge and a bit of research can save you thousands of dollars.
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