Is the ICA squeezing its members?

[mac]

Just made plans to come to the big show, or more aptly named formerly big show. When I asked my supplier of automatics about a pass to walk the floor, they were kind enough to get one, but noted that they have to pay $198 for this. This company is spending around $150,000 to put on a 2 and a half day booth. I'm all for profits but this seems a little over the top. It's bad enough to spend twenty bucks on a cheap sandwich and beer at the show.

 

[soapy]

I have in the past been privy to some of the inner workings of organizing large conferences like the ICA car wash show. From the outside it is hard to understand the incredible costs associated with one of these conventions. In Vegas the unions are pretty strong and everything carries a great cost. Typically a simple box lunch with a sandwich, chips and a cookie costs the organizer over $50 each. For every foot of convention space you use you have to guarantee so many rooms, so much in food purchases. It takes a lot of revenue to overcome these costs. If someone comes to the convention and stays off site then gets in with a free pass it just means that others have to bear the cost. I personally pay for my passes eventhough I could easily get free ones. If you are working at a booth that is another matter, but to just cruise the show it is not right to get everything free. It is too much like an entitlement program that the government runs to expect to get in free. There are two sides to the revenue stream to offset costs. One is what the exhibitor pays and one is what the attendees pay. If free attendee passes are given away the only alternative is to up the price to the exhibitors. It is a blancing act to try to keep both as happy as possible.

 

[pitzerwm]

The ICA publishes the finances for the show. So far they are making a bit of money.

 

[mac]

Soapy I can see your points, however there are some things that just don't make sense. I went to a large trade show in Orlando, the same place the ICA used, for a show sponsored by the NBAA, or National Business Aviation Association. They were selling some pretty high end aircraft. The show entrance was free. Still had to pay twenty bucks for the lousy sandwich and beer, but the show was free. The exhibitors were giving away some nice trinkets. How can one group do this and the other can't?

 

[soapy]

Mac, I think the key is the number of attendees. I go to the SEMA almost every year. The cost to get in there is minimal. But they have 75,000 to 100,000 attendees every year so sponsors are willing to pay more for that exposure. Most carwash shows have seen attendance drop by 50% in the last 5 years. With less attendance you get fewer exhibitors. So you are loosing revenue on both sides of the equation. Vegas costs for a convention have dropped a little but no where near 50%. I estimate about 20% overall. That could be one reason the ICA is looking to other cities again.

 

[mac]

Thanks for those thoughts. I agree that in order to put on a show you have to do it in such a way that your wife will not say something like, "You're not going to put on that show again are you?" However when I see two different groups put on a show in the same place with basically the same cost(actually the NBAA probably has higher exhibitor cost due to the value of the machines they sell), how can the results be that different? I mean it would have been fairly oblivous to most of the salespeople there at the aircraft show that I wasn't the decision maker for the purchase of a 30 million dollar jet, they still let me in for free. And I got to look and sit in some mighty nice aircraft. One of the two has a better business plan than the other.

 

[rph9168]

I think one of the big reasons attendance is down as Soapy points out is the number of free passes available to exhibitors. I worked for the largest chemical company in the business in the 80's and 90's. We used to get a large box full of show passes from the ICA. We would put two show passes in every invoice and gave them freely to our distributors to hand out to their customers. In most of those years there was 10,000+ in attendance.

While the economy may be pinching many, in addition having to travel to the Show and pay for a hotel and meals, the high cost of show passes certainly doesn't encourage attendance.

It is a shame that in addition to the high cost to exhibit at the Show, exhibitors have to pay for additional passes beyond what is alloted to them even for some of the people who are working their booth at the show. It is ironic that companies exhibit at the Show to showcase their products get customers and those same potential customers have to pay to come to their booth.

 

[robert roman]

The main reason EXPO attendance has been down is because annual average equipment spending has dropped by roughly 50 percent between 2000 and 2010.

View EXPO as a multiple profit center like a convenience store with gasoline and a carwash.

You have to pay first to buy gas or get a carwash but anyone can enter the convenience store for free. You can use the bathroom for free. You can also walk around inside the store for free and look at all the stuff for sale.

However, if you hang around the check-out counter chatting to the cashier and other customers instead of buying something, eventually the store manager will take a dim view; “go away son you are bothering me.”

Each free pass a vendor gives someone who is not a potential buyer increases the vendor’s opportunity cost of exhibiting because it reduces the probability of the vendor booking a sale at the show.

Time wasters and tire kickers are not going to contribute to bookings necessary for the vendor to cover cost of exhibit and make a return.

 

[Earl Weiss]

Each free pass a vendor gives someone who is not a potential buyer increases the vendor’s opportunity cost of exhibiting because it reduces the probability of the vendor booking a sale at the show.

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I think that if they hold that view they are being shortsighted. Yep if I give my customer a free pass knowing he is not in the market to buy my stuff it does nothing for me. But, he may be in the market to buy any number of things I don't supply. i.e. if I supply cleaning solutions he may be in the market for equipment.
Similarly, the other suppliers would do the same increasing exposuire all around. Increased exposure is good, at least i was last time I checked.

Even with the auto shows, I felt it nutty that they charge you admission for the opportunity to sell you stuff. Sort of like Costco and Sam's club.

Wait a minute. I've had an epiphany. We need to charge our customers admission, and then charge them again for what they buy!

 

[rph9168]

"Each free pass a vendor gives someone who is not a potential buyer increases the vendor’s opportunity cost of exhibiting because it reduces the probability of the vendor booking a sale at the show."

Having exhibited for many years at the Show I really question this statement. Maybe the economy has something to do with lack of sales at today's Shows but back when attendance was 10,000+ we sold a lot more than exhibitors do now at the Show with attendance less than half that. In addition to sales we got a large book of leads. There will always be "tire kickers" at the Show but I believe many of those may someday become buyers when the need arises.

I also feel that the Internet has also had its effect. Shopping on line for equipment and supplies seems to increase every year. Take a look at how many times a web site is referred to for parts and supplies on this Forum. The ICA tried to organize a virtual Show several years ago but the format made it a bit difficult to attend and respond to those interested.

There are many causes for the drop in attendance at the Show but I am sure most exhibitors would rather have 10,000+ attendance regardless of the attendees intentions than what we have today.

 

[robert roman]

If I invest $150,000 in total cost of exhibit, there are 2.5 days for my temporary store to make ROI, knowing the chance of selling to leads after-the-fact drops very quickly.

If I want to give something away for free, I would give a presentation at one of the seminars or host a free party at night to socialize.

During the day, my objective would be to book enough equipment sales to at least double my $150,000 investment.

If my margin for the show is 30 percent, I would need to book $1.0 million in sales orders.

How does giving free passes to people who aren’t buyers going to help achieve the objective?

How much chemicals or spare parts do you need to sell to net $300,000 before total cost of exhibit?

 

[JMMUSTANG]

Uncle Sam sent me 2 free passes to the Orlando show through his offer on this site.
I had never seen any of his vendors.
Wasn't planning on spending anything.
Ended up buying his large refrigerated vendor.
Guess what I even bought a complete tunnel of AVW equipment.
They were not even on my radar at the time.
My two best purchases I made that year all on 2 FREE passes.

 

[JMMUSTANG]

If I invest $150,000 in total cost of exhibit, there are 2.5 days for my temporary store to make ROI, knowing the chance of selling to leads after-the-fact drops very quickly.

If I want to give something away for free, I would give a presentation at one of the seminars or host a free party at night to socialize.

During the day, my objective would be to book enough equipment sales to at least double my $150,000 investment.

If my margin for the show is 30 percent, I would need to book $1.0 million in sales orders.

How does giving free passes to people who aren’t buyers going to help achieve the objective?

How much chemicals or spare parts do you need to sell to net $300,000 before total cost of exhibit?

Then the cost at these cities are too expensive.
Maybe the ICA should look into cities that are centrally located, generally easy to fly or drive to for most and really looking for conventions thereby willing to negotiate better terms for the exhibitors.
The exhibitors cost would be much less.
Then they could give free passes and the attendance would go up.
Who cares about the tire kickers because a few might end up buying something.
You can't sell if you don't have customers- free or not free.

 

[pitzerwm]

Of course the sq ft needed is less now, but probably still too big for most convention centers.

 

[PaulLovesJamie]

What exactly is a tire kicker?
How many of them are there?
Where do they get the time & money to fly to vegas to attend expos, with no intention of spending a dollar?
(How do I get a job like that? )
And exactly how is it that they cost paying attendees additional cash?

I did participate in tire kicking once while helping my girlfriend shop for her first car with her dad. I know I did because when we tried to get help, the salesman said "youre just here to kick tires." Jamie's normally gregarious dad stuck his thick germanic finger in the guys chest and said "maybe if you had decent cars at a fair price and knew how to sell them we would buy one. And by the way, clean your cars they are filthy." Needless to say we left. (translation: we bought elsewhere.) Fond memory.

I reckon I might be counted among the expo tire kickers too, because I've never bought an expensive IBA or any 6 figure tunnel equipment? I could add up the $ I've spent (and will spend) as a result of having attended the show, we have records of everything. Its not 6 figures... but its probably closer to 6 than 4. Not bad for self-service hoi polloi who stayed off-site in a cheaper hotel.

I'm having flashback visions of a spy-vs-spy comic where the red menace forces the weeble-shaped americans to pay for the privilege of shopping... any of you other old guys remember spy-vs-spy?

 

[rph9168]

If I invest $150,000 in total cost of exhibit, there are 2.5 days for my temporary store to make ROI, knowing the chance of selling to leads after-the-fact drops very quickly.

If I want to give something away for free, I would give a presentation at one of the seminars or host a free party at night to socialize.

During the day, my objective would be to book enough equipment sales to at least double my $150,000 investment.

If my margin for the show is 30 percent, I would need to book $1.0 million in sales orders.

How does giving free passes to people who aren’t buyers going to help achieve the objective?

How much chemicals or spare parts do you need to sell to net $300,000 before total cost of exhibit?

Alot of if's. I guess we were just lucky back then to become the largest chemical supplier during the period of large attendance and free passes.

I would rather see a crowd at the Show. Sales can be a numbers game so the more people the more opportunities.

 

[Kevin Reilly]

I've been going to the shows for years, however I have missed the past 2 years because of health. I would disagree with Robert in this respect. I very rarely bought at the shows because they were too busy. I went to see what is there and to keep up to date with what the industry and fellow operators are doing. So yes, I would be a tire kicker, but when I got back to the office then that would be the time of purchase if the plan was to purchase anything. And the shows have ALWAYS been educational for me.

I plan on being @ ICA to kick some tires in a couple of weeks! (and maybe pull some slots!)