The Opportunity Cost of Outbound Marketing: A Case Study, Part I

Welcome to the Jungle.

Let's pretend you're a medium-sized company in the bicycle industry. You've heard a lot about inbound marketing, but you're hesitant to make the switch because you're familiar and comfortable with the outbound methods you learned years ago in business school, and learning a new method seems a bit daunting.

You and your colleagues are just returning from a major bicycle trade show, where you displayed your newest products on the giant exhibit floor in Los Angeles. As you reflect on your weekend at the trade show, you begin mentally calculating your costs of attending the trade show for you and your three colleagues:

' Transportation to the conference, including airline tickets and taxis: $1,500
' Individual hotel rooms near the conference center: $800
' Basic ten-foot by ten-foot booth on the exhibit floor: $3,300
' Shipping and labor costs to transport and set up booth: $800
' Renting a scanner to scan badges of leads: $600
' Company logo branded on trade show bags: $6,000
' Exhibit floor passes for you and your colleagues: $500
' Branded kitsch to hand out to booth visitors: $400
' Fancy dinners with prospective clients: $300
' Other costs: $200

After adding it all up, you estimate spending nearly $15,000 to attend the trade show'not including the opportunity cost of closing your bicycle store for the weekend while you were gone. So to make a profit on your investment in the trade show, you'll have had to secure over $15,000 dollars worth of future business from an exhibit that was saturated with competitors, many who offered better products than you do.

This makes you wonder: how can you measure ROI from the weekend spent at the trade show? Is it even possible? Sure, you talked to people and put your name out there, but how many of your leads were truly quality leads and how many were merely people passing by your booth? Plus, how many of your leads will actually respond to your follow-up emails, which will likely be delayed by the trip home after the conference?

The bottom line: trade shows, like all other methods of outbound marketing, carry a huge risk of lost profit while failing to guarantee qualified leads. So what's a medium-sized company distressed by the costs of outdated outbound marketing methods to do?

To be continued in Part II'