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Diving into the Profit Equation

Making Headlines

Diving into the Profit Equation

Your teams accomplishments must be linked to business profitability.

As far as mathematical equations go, it’s pretty simple:  Revenue – Expenses = Profit. This may also be identified as trade show ROI (return on investment).

But getting to the final numbers for both Revenue and Expenses is not!  Many factors influence the level of both categories and ultimately affect the contribution to the bottom line.

Let’s define these terms relative to our purpose.


Revenue-related accomplishments in a marketing context are typically attributed to sales closed through new business development.  Marketing’s responsibility is to find and deliver the opportunities.  It is up to Sales to associate a value to those opportunities and to establish a close commitment percentage.  Generating new sales through meaningful interactions and resulting leads with potential buyers is the most obvious.

Not so obvious is protecting and growing the revenue you already have through your existing customers.  Customer retention is a factor that is easy to overlook by companies.  Clients are sometimes viewed as “cloistered” and not provided much attention on the show floor in favor of new prospects.

However, much like your own desire to find new prospects, your competition is vying to convert your at-risk customer base into their prospecting pool.  Additionally, current clients provide a solid base for selling deeper into an account that should not be ignored.

Event plans should include both sets of targets.


Expense-related accomplishments in an event marketing context are virtually unlimited.  Expense reductions (a.k.a. cost savings or cost avoidance) impact profitability dollar-for-dollar. For instance, when you have your company CEO meet with 30 customers and prospects over three days at a major event, you should consider the savings to your company.  How much cost did you avoid by not having the CEO fly out to meet with those same customers individually?  Take that cost savings (say, $10,000) and multiply it by those meetings.  That’s a significant savings to associate to your tradeshow program, not to mention the travel time saved to devote to other business activities!

Here are other scenarios to consider:

  • If you are using the media center at a big show to introduce a new product to industry or financial publications, how much is saved compared to hopping from city to city looking for the right journalists?
  • When you reduce the number of sales calls from five to two for a qualified visitor because you were able to advance the conversation at a show, what is the impact on sales expense?
  • When you develop new digital graphics, video, web pages and social media for a major show, how many times will those assets be re-used in the future and for how many purposes?

The examples are endless.  Expense reductions are the greatest and most varied opportunities available to you as an event marketing manager.  Expense-related accomplishments should be a part of every show plan.

Now that we’ve broadened your perspective on the profit equation, what links you and your team to the company’s profitability through revenue and expenses?  Start creating your list and contact us to let us know!

Happy measuring!