Welcome back to #TrackThis! Today, Matt Rissell, CEO of T Sheets Time Tracking, and I sat down to talk about tracking your ROI of attending conferences and trade shows. It's an important question: Is it worth attending these events to get your name out there, or to have your people trained? It's hard to know necessarily, and that's why it's so important to track your ROI. People have so many questions about this topic, and we really tried here to talk through all the pros and cons to think about when you're considering attending these events. Matt is a bit more cynical about these conferences than I am, which is a completely fair view point on these oft-expensive events, but we both agree that if you're going to go, you have to go all-in. These events are typically quite expensive, and it's important to make a big splash if you're going to spend big cash!
The audio of our conversation can be found above, and the transcript of our conversation can be read below:
Matt: Hello and welcome to episode number six of #TrackThis, small business tracking tips from CEOs, specifically, Sabrina Parsons, CEO of Palo Alto Software, and Matt Rissell, CEO of T Sheets. We'll be talking today about tracking the return on investments of attending conferences and trade shows. It's a hot topic—should you or should you not make the investment in trade shows? If you do, how do you actually track your ROI? Up first is Sabrina Parsons.
Sabrina: Thanks, Matt, really excited to do another episode of Track This with Matt and T Sheets. I think this is one of those topics that people have so many questions about. I find anything to do with marketing in general, all of us in the small business world just have a hard time sometimes figuring out should we spend the money, should we not. In the online world, you have so many tools to track your spends, if you're doing pay-per-click marketing, banner advertising. You've just got a lot of different tools that can actually show you how many people clicked, how many people buy, what they purchased, how much money they spend. It's a whole lot easier to prove your return on investment.
When you get to marketing activities like conferences and trade shows, it can be a lot harder to figure out what is actually going to be a good conference to go, how you're going to have a return on your investment, and how do you even make that decision. I love the images here. Any of you who watch the HBO "Silicon Valley" show will recognize this; if you don't watch it, you should definitely check it out. It's a very fun satirical show about startups. This is exactly what these guys face—should they go to conferences, what kind of money should they spend, and what are they going to get out of it.
We all deal with that. If you're the CEO or the president or the owner of a small business, you get bombarded by salespeople trying to sell you all kinds of things, including "come to this trade show, come to this conference." Those of us who go know that conferences and trade shows are expensive. You've got to have materials to present. You have to have things to give away. Your booth has to look well. You have travel there. You have to spend money on a hotel. It's really hard to go to a conference and spend less than thousands of dollars, usually in the $5,000 range. That's probably a cheap conference. How are you going to actually track it?
The first thing is start with SMART goals. Throughout your business, I really recommend you use SMART goals. SMART really stands for specific, measurable, attainable, relevant, and time-bound. If you're going to go to that conference, you might think about putting together a special offer for only conference attendees, that has to be redeemable in a certain time period. Maybe redeem this offer in the next two weeks and then you can actually track and see did the offer get redeemed, how many people redeemed it, what did they purchase, and what is my ultimate return of investment.
Now, you may be going to a conference purely for the branding and for the awareness. If you do that, then you still have to have specific measurable, attainable, relevant, and time-bound goals. Maybe what you want is to get a certain group of thought leaders behind your products. Maybe your goals are "I want 10 quotes from these thought leaders that I can put on my website. If I can go to this conference and get these 10 quotes, all raving about my products or services, then this conference will be worthwhile." Even though these goals aren't sales and revenue, there are still goals that you can set up before you go, and then you can measure against those goals and say, "Did I get that?"
Once you put those quotes up on your website, in your brochures, in your marketing materials, track the difference from before you have those quotes. Are you selling [to] more customers? Is it easier to close deals? Did those quotes help you in the way that you thought? As long as you set things out and put the goals down and track them, you're going to be in good shape.
Matt: [laughs] Well, I don't know what conference you went to Sabrina for $5,000, but sign me up for that one.
Sabrina: [laughs] Well, exactly. I mean, it does [inaudible 04:55], we know. That's like minimum. That's probably a conference down the street.
Sabrina: Not the one you have to have to fly to.
Matt: Right. If you're going to travel to a conference, I mean, typically the conference just to get a booth is $5,000 to $10,000. That's for the smallest booth you can get. Let alone flying three or four people down with air fare and meals and then your booth is an extra expense. Don't forget, if you want internet, that's another $2,000 at your booth. I mean, it's just a big investment. Typically, I think the average for small businesses is to spend like $25,000 at a conference. Definitely go in with a good idea with exactly what your budget is so you don't get there and run out of money, run out of budget and go, "Oh, geez, I can't maximize this."
One specific, I love what Sabrina said [inaudible 05:44]. I tend to be on the cynical side of conferences. If I can recommend one thing to you is that I would really shy away from just doing the brand exposure conferences. What we do, it's one of my own personal rules, this is like rule number one for Matt Rissell and T Sheets for going to conferences, is that we have a call to action right there. This isn't the conference—I don't go to conferences and just collect business cards. I think that's a waste, no one wants to get those emails afterwards, but what we do every single time is we have a call to action. We try to make it digital, something that they do right there on the spot.
It doesn't have to cost them money, but it's something that they know that they took the effort to engage with your company right there. Your retention rate of that individual, after the conference, is 85 percent higher if they responded themselves versus you doing it for them. So, that would be my one recommendation. And then, if it is digital, back to the return on investment, you can track anything that you've created in revenue, in sales, relationships, that can all go back to that specific conference. That's one way, probably the most significant way that T Sheets tracks our ROI on conferences.
Sabrina: Thanks so much, Matt. I'm just going to jump in here because I think Palo Alto Software has learned a lot from seeing what T Sheets does at conferences. If you're going to go, if you're going to spend the money, and like Matt says, a $5,000 conference is probably a teeny tiny one; most of the time, you're looking at between $10,000 and $20,000 when all is said and done. One of the things T Sheets does that I think is the way everybody should go is they get a theme around which they present their booth, and everything they do is around this theme and that theme goes back to who they are as a brand and fits right in with the audience. It really gives you an impact with the people that you go to.
If you are going to go and you're going to spend money, not only should you do all this tracking, think about fun ways to stand out and drive your brand and your message home with the audience. You're already going to be there, and they don't necessarily have to be expensive things. It's as simple as the T Sheets booth had a superhero theme and all their employees that were at the booth had superhero themed outfits for everyday. It's as simple as that. You can hear the chatter amongst the accountants at the conference we were all at together about the T Sheets booth.
Start with your SMART goals, and then add in a little bit of fun that fits with your brand and gives your message out there to that audience because I think Matt is right, you want to hook people in, but you want them to respond to you. This whole "put your card in a fish bowl and you'll win something" is fine, and it's an okay way to get leads, but at the end of the day, most people putting their cards in there just want the iPad mini that you're giving away. They don't necessarily want your products and services. So, figure out a way to engage them and get them to ask for whatever it is that you're giving out, so that you know that they're engaged.
Matt: That's exactly right. I would just add one thing, is that we are big on giveaways at our booth, but we always take those opportunities and leverage them intimately into creating that desire, that interest in T Sheets or in our company in order to get them to a call to action. So, well said.
Folks, thanks for listening to this episode number six of #TrackThis. Please do us a favor, tweet your business tracking questions and comments to us. We want to respond to them, and we know that tracking things is not always the sexiest, and it's not always the funnest part of your job as an entrepreneur or a business, but it's one of if not the most important to know you're headed the right direction. Again, tweet your business tracking questions and comments to #TrackThis.
Signing off from Sabrina Parsons, CEO of Live Plan, and Matt Rissell of T Sheets, have a great day.
Sabrina: Thanks, Matt. Thanks, everybody.
Rich irony: 37Signals, a great Web app for project management, ought to know better than anybody that real business planning is a process, not a plan. After all, they do the kind of nuts and bolts management that makes that happen. Instead, however, Matt of 37Signals posted the planning fallacy last week:
If you believe 100% in some big upfront advance plan, you're just lying to yourself.
I object. Who ever said planning was "believing 100% in some big upfront plan?" Good business planning is always a process involving metrics, following up, setting steps, reviewing results, and course correction.
He goes on:
But it's not just huge organizations and the government that mess up planning. Everyone does. It's the planning fallacy. We think we can plan, but we can't. Studies show it doesn't matter whether you ask people for their realistic best guess or a hoped-for best case scenario. Either way, they give you the best case scenario.
OK that's a dream, not a plan. Matt seems to confuse the two, but good business planners don't. Any decent business planning process considers the worst case, risks, and contingencies; and then tracks results and follows up to make course corrections.
Which leads to this, another quote:
It's true on a big scale and it's true on a small scale too. We just aren't good at being realistic. We envision everything going exactly as planned. We never factor in unexpected illnesses, hard drive failures, or other Murphy's Law-type stuff.
No, but you do allow extra time for the unexpected, and then you follow up, carefully (maybe even using 37 Signals' software) to check for plan vs. actual results, changes in schedule, new assumptions, and the constant course correction. Murphy was a planner. He understood planning process, plan review, course corrections.
That messy planning stage that delays things and prevents you from getting real is, in large part, a waste of time. So skip it. If you really want to know how much time/resources a project will take, start doing it.
Really bad advice there, based on a bad premise. Sure, if you define planning as messy and preventing you from getting real, then it would be a waste of time. But is that planning?
I wonder if Matt takes his own advice. When he travels, does he book flights and hotels? Or does he skip that, and just start walking.
(Note: reposted from Planning Startups Stories)
Every startup has its own natural level of startup costs. It's built into the circumstances, like strategy, location, and resources. Call it the natural startup level; or maybe the sweet spot.
1. The Plan
For example, Mabel's Thai restaurant in San Francisco is going to need about $950,000, while Ralph's new catering business needs only about $50,000. The level is determined by factors like strategy, scope, founders' objectives, location, and so forth. Let's call it its natural level. That natural startup level is built into the nature of the business, something like DNA.
Startup cost estimates have three parts: a list of expenses, a list of assets needed, and an initial cash number calculated to cover the company through the early months when most startups are still too young to generate sufficient revenue to cover their monthly costs.
It's not just a matter of industry type or best practices; strategy, resources, and location make huge differences. The fact that it's a Vietnamese restaurant or a graphic arts business or a retail shoe store doesn't determine the natural startup level, by itself. A lot depends on where, by whom, with what strategy, and what resources.
While we don't know it for sure ever -- because even after we count the actual costs, we can always second-guess our actual spending -- I do believe we can understand something like natural levels, somehow related to the nature of the specific startup.
Marketing strategy, just as an example, might make a huge difference. The company planning to buy Web traffic will naturally spend much more in its early months than the company planning to depend on viral word of mouth. It's in the plan.
So too with location, product development strategy, management team and compensation, lots of different factors. They're all in the plan. They result in our natural startup level.
2. Funding or Not Funding
There's an obvious relationship between the amount of money needed and whether or not there's funding, and where and how you seek that funding. It's not random, it's related to the plan itself. Here again is the idea of a natural level, of a fit between the nature of the business startup, and its funding strategy.
It seems that you start with your own resources, and if that's enough, you stop there too. You look at what you can borrow. And you deal with realities of friends and family (limited for most people), angel investment (for more money, but also limited by realities of investor needs, payoffs, etc.), and venture capital (available for only a few very high-end plans, with good teams, defensible markets, scalability, etc.).
3. Launch or Revise
Somewhere in this process is a sense of scale and reality. If the natural startup cost is $2 million but you don't have a proven team and a strong plan, then you don't just raise less money, and you don't just make do with less. No -- and this is important -- at that point, you have to revise your plan. You don't just go blindly on spending money (and probably dumping it down the drain) if the money raised, or the money raisable, doesn't match the amount the plan requires.
Revise the plan. Lower your sites. Narrow your market. Slow your projected growth rate.
Bring in a stronger team. New partners? More experienced people? Maybe a different ownership structure will help.
What's really important is you have to jump out of a flawed assumption set and revise the plan. I've seen this too often: you do the plan, set the amounts, fail the funding, and then just keep going, but without the needed funding.
And that's just not likely to work. And, more important, it is likely to cause you to fail, and lose money while you're doing it.
Repetition for emphasis: you revise the plan to give it a different natural need level. You don't just make do with less. You also do less.
I was the planning consultant to Apple Computer's Latin America group from 1982 until 1991 or 1992, the end of the relationship being a bit hard to define as I was called on steadily more by Apple Japan and less by Apple Latin America.
The challenge came in the spring of 1985. The annual business plan was done every Spring, turned into management in June and then discussed and revised and resubmitted and eventually accepted in July. In April of 1985 I had been the consultant for that process for four years running when Hector Saldana, manager of the group, said:
"Tim, yes I want you to do our annual plan for us again this year. But only on two conditions: first, I want you to stop working for other computer companies. Second, I want you to take up a desk in our office, come every day, and sit here and see us implement the plan."
Happily, he also had some good news related to giving up other competing companies as clients: "And, if you agree to do this, I want to contract you for all of your hours for the next year, and at your regular billing rate."
The condition of giving up competing clients was difficult for a single person business. What if Apple had problems, or changed its policy regarding consultants? What if Hector got promoted or fired? Where would I be then, if I had given up other business relationships.
That's not the real point of the story, although it does relate to planning as you go. That certainly wasn't part of my business plan for my business, but it was a classic example of changed assumptions. We talked about it at home at length, and decided to go ahead with it. However, we also modified the plan we had going related to efforts to generate new leads and new business: we would focus that effort within Apple itself, different groups that didn't talk much to each other, to reduce risk of having two many eggs in the single Apple Latin America basket. The plan was modified for cause, to accommodate changed assumptions.
The problem of implementation, however, forced me to consider the difference between the plan and the results of the plan.
There was some history. The previous year or two had been the time of "desktop publishing" for Apple Computer. Desktop publishing, which we now take for granted, started with the first Macintosh laser printer in 1985. It was a huge advantage for Apple in competition against other personal computer systems.
Our plan for fiscal 1985 had been to emphasize desktop publishing in most of our marketing efforts. And it didn't happen. While we talked about desktop publishing in every meeting, the managers would go back to their desks, take phone calls, put out fires, and forget about it. They didn't intend to, but they'd had so much emphasis on desktop publishing that it seemed boring, old hat. Multimedia was the thing.
So, faced with the implementation challenge, I created what became the strategy pyramid to manage strategic alignment. We ended up with a relatively simple database of business activities. Collaterals (meaning brochures and such), bundle deals (software included with the hardware at special bundled prices),advertising, trade shows, meetings and events, all were tied into a system that identified what strategy point they impacted, and what tactic.
So during that year, as business went on, we were able to view actual activities, spending and effort, divided by priority. We set more budget money for desktop publishing activities than any other. During the review meetings, we compared actual spending and activities (the beginning of what I talk about as metrics) to planned spending and activities. And over time, with pie charts and bar charts to help, we were able to build strategic alignment. What was done was what the strategy dictated.
The plan-as-you-go implication was that this didn't happen just because it was in the plan. It took management. There was a plan review schedule with the meetings on the calendar way in advance, and for every meeting I was able to produce data on progress towards planned goals. The managers discussed results. Plan vs. actual metrics became important.
When things didn't go according to plan, the meetings would bring that to the surface. Managers would explain how the assumptions turned out wrong, or some unforeseen event -- we had good results as well as bad results -- and we would on occasion revise the plan.
I noticed this very plan-as-you-go post by Guy Kawasaki on his blog. What I like about it, particularly, is where Guy says "set goals" and then lists these four desirable qualities of goals:
Measurable. If a goal isn't measurable, its unlikely you'll achieve it. For a startup, quantifiable goals are things like shipping deadlines, downloads, and sales volume. The old line "What gets measured gets done" is true. This also has ramifications for the number of goals, because you can't (and shouldn't) measure everything. Three to five goals measured on a weekly basis are plenty.
Achievable. Take your conservative forecasts for these goals and multiply them by 10 percent; then use that as your goal. For example, if you think you'll easily sell a million units in the first year, set your goal at 100,000 units. There is nothing more demoralizing than setting a conservative goal and falling short; instead take 10 percent of your forecast, make this your goal, and blow it away. You might think that such a practice will lead to underachieving organizations, because they aren't being challenged. Yeah, well, check back with me after you don't sell a million widgets.
Relevant. A good goal is relevant. If you're a software company, it's the number of downloads of your demo version. It's not your ranking in Alexa, so telling the company to focus on getting into the top 50,000 sites in the world in terms of traffic is not nearly as relevant as 10,000 downloads per month.
Rathole resistant. A goal can be measurable, achievable, and relevant and still send you down a rathole. Let's say you've created a content website. Your measurable, achievable, and relevant goal is to sign up 100,000 registered users in the first ninety days. So far, so good. But what if you focus on this body count without regard to the stickiness of the site? So now you've gotten 100,000 people to register, but they visit once and never return. That's a rathole. Ensure that your goal encompasses all the factors that will make your organization viable.
What I like about this, as you might guess, is that it's a very close match to what I'm saying here, in this site, and in the Plan-As You-Go Business Plan book itself. Goals are about business, getting things done, and they do you no good unless you follow up on results and manage accordingly.
(Note: reposted here with permission from Entrepreneur.com, where it first appeared, as one of my columns in the Business Plan coaching area. Since it's so closely related to the plan-as-you-go approach, I'm reposting it here. Tim.)
Plans are wrong, but nonetheless vital. There's a paradox for you. It's a simple statement, one that I hope is somewhat surprising coming from a business planning expert; but it's still very important. And it gets right to the heart of what business planning is all about.
More than ever, those who plan look to projections that often miss the mark. Nobody I know, and in fact nobody I've even heard about, accurately predicted the sharp plunge in the economy last fall. So of course those who actually use a business planning process are implementing a lot of course corrections, reviews and revisions.
It's a great example of how this paradoxical statement -- plans are wrong, but nonetheless vital -- makes sense. As we look at the year to come, most of us are dialing down our forecasts. Does that mean we wasted our time making them? Not at all. How do we even make sense of where we are if we don't have a map that shows us how we got there?
If you had a plan earlier this year and results differed greatly from what was expected, I hope you're taking the time to compare those results, in detail, to the earlier plan. Look for where the differences were greatest. Look for where expenses were tied to sales. Look for the bright spots where sales held up. Look for how the numbers were supposed to come together, and not just how they didn't.
And if you didn't have a plan, then think of this as a good time to get a planning process started so you have a better view of your business in the future. Start making simple sales and expense projections. Don't worry that they're wrong; just make sure you go back each month and plot where and how and in which direction they were wrong so you can correct them.
You should only be wrong a month at a time, and as you use that plan-vs.-results analysis to look more closely at how things are going, you adjust again and improve results for the next time around. With each month, your grasp on reality gets better.
And then, as things go back up -- and they will -- you'll be able to use what you learned to see the signs, anticipate and act accordingly.
This kind of planning process is what's meant by the phrase, "The plan may be wrong, but planning is essential." Then there's another old military saying: "No battle plan ever survived the first encounter with the enemy." What does happen, though, with battle plans as well as business plans, is you don't know how to recover or how to adjust the plan if you didn't have a plan in the first place.
The book is Slide:ology, and this five-minute video is a great summary.
And you might also enjoy this summary from CBS news, another short video.
These things go up and down, but I'm proud to share that -- at least as I write this -- The Plan-As-You-Go Business Plan is the number one ranking for business plan books at Amazon.com.