November 2002

BY NADJI TEHRANI

There are a number of factors that have led to this. The slowing economy and declining stock prices have led to tighter budgets, resulting in cutbacks in business travel and rethinking of how companies should spend their precious resources and what they should receive for them. Fears resulting from 9/11 have also had their hand in cutbacks in business travel. I believe we are witnessing a paradigm shift from huge, super horizontal shows to small, regional, tightly focused vertical shows. Let me explain why.

Avoid The Illusion Of Crowded Horizontal Shows 
One reason large shows are outdated dinosaurs headed toward extinction is because they have become too expensive for their exhibitors. Companies are no longer making decisions to exhibit at or attend events just because they always have. Events today have to show their value each and every event. There are those who are, mistakenly, of the opinion that the larger the crowd, the more sales leads you get from a trade show.

While a company may get more sales leads from a large show, say 1,000, compared to perhaps 500 sales leads from a smaller, more focused show, often fewer than five percent of the attendees from a large show are qualified leads. Very few who have the authority to purchase may be interested in your product or service.

On the other hand, one can almost guarantee that the leads at the more highly focused vertical show will be more highly qualified because marketers have become much more savvy at attracting more highly qualified attendees to smaller vertical shows. Also, attendees prefer the more intimate settings of small shows where they can easily find the vendors they are looking for as compared to trooping around a huge hall or from hall to hall at large shows searching for a particular vendor. In addition, a smaller show provides better networking opportunities.

Let us say that, for example, it costs the exhibitor $8,500 in total to exhibit at a smaller show to get 500 leads. The total cost per highly qualified lead is $17. Contrast this to the $150,000 a company may spend exhibiting at a large show to get 1,000 leads, which means they spent $150 per partially qualified lead. The exhibitor will then have to spend more time and money to eliminate the 95 percent of unqualified leads. In short, if we assume that only 5 percent of the leads are qualified at a large show, you actually only get 50 leads! In that case, the real cost per qualified lead is $300, plus additional qualification charges of $2,000.

In order to do a proper return on investment analysis, we must add the above lead qualification costs to the exorbitant cost of exhibiting at larger horizontal shows. If you add up the above, the total cost of qualified leads generated by large horizontal shows you will be comparing about $350 per lead at large shows versus on $17 at smaller, more focused vertical shows. When you compare, there is no comparison! (See Table 1.)

Table 1

*Estimated

Superior CRM Is Only Possible At Smaller, Focused Shows
A small, more focused vertical show brings in anywhere from 1,000 to 2,000 attendees (provided the show sponsor and exhibitors do a proper job of team marketing). The exhibit hall itself is relatively small, so that every attendee has time to stop by every exhibitors booth and have an adequate amount of time to discuss the customers needs and solutions the exhibitor has to fill those needs. 

Consequently this type of proper dialog between the exhibitor and the attendee is far more conducive to closing the sale as opposed to the one to two minutes the exhibitor and attendee have at a large show with a small fraction of the total attendees and where nothing useful will come out of it. At small, focused shows, vendors have a great opportunity and the time to develop a real relationship with existing customers as well as gain new ones.

Part of the illusion of the value of large shows was the prominence of large booths. The last year has proven that it's not the size of your booth that defines your company anymore it's the product in the booth. Shows have become what they were designed to be, a forum for selling products. Although branding is important, it has become less of the dominating decision-making factor in doing a show.

The Bottom Line
The bottom line is that every attendee at a smaller show is far more qualified and although a smaller show may bring in a smaller number of attendees, the exhibitor will gain far more sales from such attendees, not only because the attendees are pre-qualified, but also, in this economy, corporations are more likely to send decision makers to shows.

There is a myth in the industry that the more leads you get, the more successful the show. That line of thinking no longer has any validity in the new paradigm of trade show marketing. Recent cancellations of many mega shows add further credibility to the comments made in this editorial. When you compare, there is no comparison between the outmoded dinosaur that is the large, horizontal trade show and the nimble, more cost-effective medium that is the new, relationship-building vertical trade show.

Definitive Teleservices Research
I would like to bring your attention to  a soon-to-be-released research report on the teleservices industry from TMC Research. Drawing upon more than 20 years of pioneering experience in the call center and teleservices industry, TMC Research has prepared this report, which will contain information that is vital to everyone involved in this industry, from teleservices agencies to hardware and software vendors to end users of teleservices. Before you make any major decisions concerning teleservices, I urge you to obtain and study this report.

Addressing An Industry Concern
Recently, we at TMC have become aware of certain attitudes that are affecting teleservices outsourcers. From our vantage point as the leading publisher in the industry from more than 20 years, we feel we have our finger on the pulse of the industry and it is our paramount duty to point out difficulties we may see in the industry. With this in mind, I have invited my distinguished colleague Brent Welch, CEO of FutureCall, to address this issue in the sidebar, It Never Hurts To Look Back.

As always, I welcome your comments.

Sincerely,
Nadji Tehrani
TMC Chairman, CEO and
Executive Group Publisher
ntehrani@tmcnet.com

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By Brent Welch, FutureCall LLC

The relationship between client and call center service agency is a special one. It has long served this industry well and in fact has been essential to the growth and success we all enjoy today. Truthfully, none of us would be in this industry today without strong clients and quality service agencies working together to execute the work and make each program successful. 

I remember when I got into the business some 20 plus years ago, clients would frequently visit with us and ask about our capacity, if we would be there with enough seats (capacity) for them to execute next years business plan. We would regularly visit with them to discuss their needs and mutually try to plan accordingly, matching their projections and needs with our capital expenditure and ability to have a quality staff ready for their campaigns. We all knew that whatever contracts we had in place, were always subject to market changes, program tests and hoped-for rollouts. There was, however, an unspoken understanding, although not contractual in nature, that everyone understood the needs and commitments of the other and did their best to work together for mutual success.

 In todays world of publicly held service agency companies with almost unlimited capacities with centers and offices not only all over the country, but, in fact, all over the world, we have lost some of what I believe to be vital chemistry between client and agency and agency and client. 

There have always been two issues at hand: 1) do you have the plant and equipment to run the campaign? and, 2) do you have the right kind of people with the right experience to be successful? Candidly, the second is harder to achieve than the first. 

We all too often think of TSRs and CSRs as direct and variable costs, ones that can be turned on and off at will. In fact, all too frequently this is just how we treat them. When a client cuts back on a program, if we cant place them readily elsewhere; we cut them or their hours. There is not much else to do. 

Unfortunately, we have all managed in this fashion and, to a degree, always will. After all, this is one of the beauties of our industry to be able to flex and adjust to client demands and market realities. However, all too often lately we are not flexing, but in fact stomping, shoving and at times breaking. Labor markets are very special things. They must be managed carefully and tend to have long memories. We can endlessly pull them up and down, in and out and not expect to hurt them. But when we come full circle and its time to ramp back up as hard and fast as we may have ramped down, we may get what we asked for: an unresponsive and sluggish labor market that does not give us the kind of people we or our clients want. In the end, both client and service agency can suffer. 

This tough economic time has caused us all to take drastic measures at times. Regrettably, as of late I have had to be far more reactive to the labor force because the marketplace has been far more reactive. In discussion with my colleagues I dont think I am alone. In the long run, I think this hurts us all. 

But I believe things will, at least for our industry, be getting better sooner than later. It is vital that we all work together to make sure that capacity and the right labor is available for us all to help drive the recovery. 

Brent Welch is president and CEO of FutureCall LLC, a teleservices agency based in Colorado Springs, Colorado. Prior to joining FutureCall he founded TeleServices Partners, a premier call center consulting group in 1996. Brent has over 20 years experience in teleservices, including at two of the worlds largest teleservices agencies.

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