Researching New Shows

Is there a magic formula?

By Michael J. Flynn and Linda Kephart Flynn

When Jon Denman's hot on the trail of a new show idea, he stops at nothing. Take, for example, the 20,000-square-foot Canadian Forestry Exhibition that Denman'scompany, the Denex Group of Dartmouth, Nova Scotia, will debut in April 1994. "One of my first contacts was a man who had incredible experience and knowledge of the forestry industry," Denman recalls, "but he was leaving the next day for six weeks. He lived four hours away, so I got up at 3 in the morning and drove up to see him. The guy was so impressed that someone left in the middle of the night to come ask his opinion that he really wanted to help out. What I got out of that meeting you couldn't have bought."

Such dogged determination defines what new-show research is all about. According to those who have done it, taking that nut of an idea -- a "brilliant" inspiration you had driving into the office, that concept brought in by a key contact or a nagging hunch that just won't go away -- and finding out if it will be your next major money-maker, can be an exciting exercise.

Researching these show ideas, however, is far from easy. Among other things it requires skill, caution, patience, knowledge, time and money to determine a potential show's viability. Nevertheless, you can rarely overestimate the importance of quality research. Tradeshow Week Data Book, for example, tracked 32 new business-show launches for four years, starting in 1990. The findings? A full 50 percent of the shows canceled after the first year. Five more had fizzled by the third year, and only 11 shows, or 34 percent of the original, remain in existence today.

"Research is much more critical today than even a dozen years ago," affirms Peter Nathan, Vice President of New Business Development for Connecticut-based Expocon Management Associates Inc. "The criteria and scope of the show industry has changed. Shows have taken on a stronger role in the overall marketing mix, and start-ups are so costly. Today, you can't afford not to do your research."

Let's assume you already have what you think is a marketable idea. The impetus may have come from other show managers, employees, joint venture partners, industry publications or trade associations, among other sources. Whatever the origin, you must be certain that your idea is sound and can make money, too.

Learning the industry
To start, learn as much as you reasonably can about the industry your show would serve. How old is it? What conditions brought it into being? How is the industry growing and/or changing? Who are its key players? What does it buy, what does it sell, and how do its members make those transactions?

Find out if manufacturers in your target industry sell to distributors, who then sell to retailers, or is the route more direct? What's the selling cycle? Who makes the buying and selling decisions? What does it take to get to those decision-makers?

Your list of questions will grow -- not shrink -- as you learn about the target industry and uncover its various facets. Obviously, trade journals will present a wealth of information. "The very first thing we do is try to find out what trade associations and trade publications exist," says Mark Weber, President of Professional Exposition Management Company in Chicago. "Trade publications are more of a neutral source than just about anything else out there."

Consumer magazines, on-line data banks and your local public library also will prove invaluable in discovering the basics. Consider contacts with banks, chambers of commerce and merchant associations, as well. On the governmental level, look into the federal Census Bureau, Department of Commerce and Small Business Administration; state departments of commerce, the office of the secretary of state and state bookstores; and local regulatory agencies.

"What I knew about forestry you could put on the back of a postage stamp," remembers Denman about researching his new show. "I went to the government, which is useful as long as they're in a supporting role. If they don't know the answer, they'll know where you can go to find out."

Associations also can provide an information windfall. Of course, the group already may have a show competing with your idea. In that case, look for general information that's available to anyone "interested" in the industry. Take the leads and do your follow-up through other sources. Non-members can often use association libraries for a fee.

Steering by committee
Once you've acquired background on your target industry, talk with those who know it best: the people who live, breathe and work it. "You have to be honest enough with yourself to realize you're not an expert," says Sam Smith, Vice President and Operating Officer of Production Group International in Virginia. "You're a show manager, a marketer, a promoter, and you have to talk with the people who have the expertise you need."

Smith suggests tapping those experts for an advisory council. Tell key industry members you're researching a show and need their input on an event that will benefit their business sector. "If you put together a list of 25 people, maybe you'll get 10 favorable responses and six will show up," he says. "But that's just a starting point because they'll always know 10 times as many people in the industry as you do."

Denman also favors using steering committees to learn about his target industry and its potential for a show. A week prior to scheduled committee meetings, Denman announces the agenda by fax and asks those who cannot attend to comment in writing. Then, he keeps meetings strictly to one hour. "The result is that people say these steering committee meetings are the only meetings they have fun attending, and we don't waste anybody's valuable time."

What happens if your research turns up no trade associations, no industry publications and few resources? Don't despair, you just may be ahead of your time. "Emerging fields of technology, like bio-tech a few years ago, had insufficient numbers to support a show or publication," according to John Mooney, Vice President of Marketing for Boston-based Reed Exhibition Companies-North America. "In that case, a conference program can be the leader into a trade show for the industry."

Mooney speaks from personal experience. "Our CD-ROM conference started us in that field six or seven years ago," he says. "As the universe of buyers and sellers has expanded, the conference has grown into a 50,000-square-foot show. We'll do the same thing with our Digital Signal Processing event this year."

Unearthing your competition
As you build a solid feel for your subject, you'll also gain knowledge of any existing industry shows. Now is the time to look at your potential competition. Decide if your idea represents a horizontal show, or are you hoping to mine a vertical niche of your own? Are you up against regional, national or international shows? Who attends them? Who exhibits at them? When and where are they held -- and why? Can you determine their booth and attendance pricing? And most important: Does a need exist that they don't fill?

You can unearth existing shows from a variety of sources. Among the publications listing expositions are: the Tradeshow Week Data Book, Directory of Expositions, Standard Rate & Data's Trade Show Catalog and Trade Shows Worldwide. Associations such as the Trade Show Bureau, the International Exhibitors Association and the International Association for Exposition Management may also lend direction.

"You can get a good idea of how 'spin-off-able' a niche show could be by going to a larger show and walking the floor," says PGI's Smith. "Talk to the people, both attendees and exhibitors. They don't need to know you're researching a competitive show. The basic questions you need answered could be asked for a million different reasons."

You probably won't find virgin territory for your show idea. In today's competitive environment, someone, somewhere works in your market. But what if you fail to find any existing shows? Save those cartwheels of joy and dig deeper.

"If there's no show, you have to find out why," says Expocon's Nathan. "Today that's rare. There must be a reason. Either there was a show and it failed, or the industry is such that no one else has found a way for it to support an event. Either way, it's critical that you discover what's already taken place and what's changed since then that could affect your idea."

When searching out the competition, also be certain to look at secondary industries. Often, you'll find opposition already established in two or three existing -- but seemingly unrelated -- shows. Elements of a materials-handling event, for instance, already might be incorporated in a bar-coding show, a plant engineering show and a packaging show.

Once you've identified the competition, you may decide they already produce a show exactly matching your idea, with one big difference you're not involved. After further research, you may conclude that their show idea is sound, but they frightfully mismanage the event itself. Why not save yourself months of start-up pain by buying them out? "A buy-out can be a good strategy if you're right about what's needed. But it can be a bad one if you're wrong," says Paul Mackler, CEO of Conference Management Corporation in Connecticut. "Everyone thinks they can do it better. But often, understanding what's necessary for a successful show -- especially if you're outside an industry looking in -- can be very difficult.

"We've acquired shows that we felt were under-marketed, and we've been very successful with them," Mackler continues. "But we've also acquired shows and had the opposite results ."

Surveying potential attendees
After you establish a basic understanding of the industry and a sense of your competition, listen to your customers -- the potential attendees and exhibitors. "I go after the end-users -- the attendees -- first," says Denman. "They're the ones who know what works and what doesn't; they know who's good and who's not. And by the time you get to talk with the exhibitors, you already know the concerns of the industry, so you can talk from an informed position."

The world's largest show management firm, Reed Exhibition Companies, first quantifies the universe of buyers and sellers -- attendees and exhibitors -- in the target industry. For a business show idea, for example, researchers would review the circulation and advertising in leading business publications. "Once you know the buyers are there, then the $64,000-question is, 'Will they come?"' notes Mooney. "To answer that we do a series of study groups on the buyers' side, because if they're at the show, then the sellers will come."

Depending on your location, you may want to bring potential attendees in for focus group sessions, survey them through written questionnaires or even quiz them via a telemarketing campaign. "We've done 10-question telephone surveys to over 100 food industry professionals, but the cost can easily get up to $10,000 or $15,000," says PEMCO's Weber. "If you go to direct mail, you can send out thousands of surveys for a fraction of the cost."

To illustrate, Weber explains: "If there are 70,000 members in an association, and you send a survey to 10 percent of them -- expecting a two-percent response -- you can get returns from 140 people in the industry for easily half of what it would cost you to call. We don't offer an incentive, just a short, simple form and a request that they help."

At this stage, what's most important is information. You're not after a $15 admission fee, you're after research material. "We may never ask the potential attendees if they'll come to a trade show," reveals CMC's Mackler. "We want to know what their needs are; what they buy; when they buy; how they buy; how the buying decision is made. It's those answers that will help us determine whether to move ahead with an idea."

Using professional researchers
What you ask may be one thing -- who does the asking is another. Many show managers prefer to talk directly with potential attendees, while others turn the work over to market research professionals. "Ideally, we'd use an independent moderator for our study groups," Mooney says. "If you're already hot on an idea, the results are easily influenced by the enthusiasm of the organizer."

The decision to use outside help can also be a financial one. If your in-house staff can handle it, they may do the research more economically. Conversely, small-staff operations often feel they can make better use of their time by leaving surveys to a specialist.

Where to find professional help? Check with industry contacts to identify competent market research firms they've used. The chamber of commerce may help on a local basis. On a broader scale, the New York chapter of the American Marketing Association publishes an annual "Green Book," which gives a comprehensive list of research firms nationwide. The Market Research Association's annual Research Services Directory, known as the "Blue Book," includes more than 900 paid listings that describe members' services and specialties. According to the MRA, 500 major university libraries across the country carry the directory.

Evaluating exhibitor potential
In the chicken-or-the-egg world of new show research, some professionals favor approaching potential exhibitors before attendees. "I believe in getting the exhibitor first because you can show them what you're doing in terms of marketing," says Weber. "They're the easier of the two, and they can respond to the game plan you're setting up."

PEMCO starts its exhibitor research by pinpointing the 10 leading companies in its target industry. With positive response, PEMCO then goes on to survey 100 to 150 related companies, depending on the size of the exhibitor base. "We're looking for two things," Weber discloses. "First is their interest in the idea as a marketing vehicle and, second, the perceived weaknesses in any existing shows. What's the return on their investment as an exhibitor? Would they consider exhibiting in a different show? If we get a positive response from over 50 percent of those 100 or 150 companies, that makes us comfortable."

Reed, after confirming potential attendee interest, approaches exhibitors with its findings, such as the level of need among attendees and lagging attendance of other shows. "We talk with the key bellwethers to gauge their response," says Mooney. "The top 30 companies would be enough, but they must be the movers and shakers of the industry. And you must talk with them face-to-face. Basically, you're pitching them with a show, and you need to find out their thoughts and concerns."

In talking with potential exhibitors, maintain a certain skepticism about their responses -- even when they say they'd gladly join your new show. "That gap between their genuine interest and getting them to send in a deposit check can be huge," warns Weber. "If we're looking at a regional show, and a third of the exhibitors at a national one say they're interested, we've done well if we get commitments from half of that 33 percent. Then we know we've got a live one on our hands."

Learning about education
A strong educational component is a virtual necessity in all contemporary start-ups. Plan to spend time, or at least resources, in researching the seminars, speakers, formats and subjects that will go into your proposed program.

"If you feel like you can have a trade show that's just a product show with no sessions, be leery," cautions Gerald Lewis, PGI Vice President and Co-Operating Officer. "The educational component is value-added and very important today. It's necessary for the attendee to justify leaving the office. If you can see lots of new products and learn something at a professional seminar, then it's valuable."

Initially, you can research your educational sessions at every level described above. Ask your potential attendees and exhibitors what problems they face. What do they need to learn more about? What do they want to study that's not available in any other form? What do they need to do their jobs better? What major topics face their industry now and in the near future?

"As you begin to get a feel for what's needed, ask yourself, 'Could I promote these sessions by themselves?"' Lewis says. "Could you sell it in hotel meeting rooms without any booths or displays? Too often the answer is 'no.' If the answer is 'yes,' then you've got something."

Educational plans lend themselves particularly well to steering committees. Again, you most likely know how to put on shows, not what to teach people about their industry. Use industry members, who have an insider's knowledge and vision of what's needed, to evaluate your seminar details.

"I prefer to bring in an outside consultant -- an association member or a publication editor for this type of research," admits Nathan. "These people have a greater knowledge of the industry, and I can depend on them to let me know what's necessary. I would never presume to make those judgments based on what I know."

Lewis, however, suggests discretion in relying solely on education committee recommendations. "Let's just say that people who join committees are not like everyone else," he states. "I'd say 90 percent of the people out there are not as gung ho about the industry, and they may have concerns that your committee members take for granted. Be aware of the differences."

The pricing details
Assuming your research up to this point has proven positive, you now need to give a hard look at pricing -- both for booths and attendance. Look first at your competition. What do similar or directly competing shows charge? What do they provide for those booth dollars? Do attendees receive something special for the admission price, or does it simply get them in the door?

Perhaps you can best answer these questions by attending as many different shows as possible. Study the layout; look at the show's day-to-day operation. Do exhibitors seem happy with their surroundings and service? Are they grousing about their location, traffic flow or booth components? If you can't get to the shows, pour over industry publications to see who advertises, what sort of money they spend for ad space and how professionally designed and executed their material seems to be.

"There are two issues in pricing," says Mackler. "What will the market bear, and what will you have to charge to properly produce a show and realize a profit? You have to see if those two numbers are agreeable and how far they are apart. Sometimes we'll have a wonderful concept that just won't make any money. Those are the ones you have to pass on."

Background for backers
Producing your pricing details, as well as the rest of your research results, will be necessary if you need financing for your new event. Potential backers, be they private investors, venture capitalists, banks or the SBA, will want to see your business goals and objectives, sales strategies, sales forecasts, one- to five-year budgets, balance sheets, P&L statements and cash flow projections on a monthly basis for three years and a quarterly basis for two more. Although these sometimes may be difficult to project, you'll exhibit long-term commitment by producing them.

"Going to a bank for a line of credit is hard because in the trade show business you have very few tangible assets to use as collateral," Mackler declares. "Venture capitalists will want a share of the control and the equity, and it's a trade off for you to give those up. I've seen venture capital used more for acquisitions than launches, because you can usually launch a new show with less capital."

Keeping it confidential
By now, you've been on the research trail for some time. You've talked with a growing list of people, and you may wonder who else -- namely which competitor -- has gotten wind of your plan. Relax. While idea piracy exists, it's probably less common than you think. "There are people out there who operate by trying to steal ideas," admits Expocon's Nathan, "but I've discussed ideas, even with potential competitors, and not had troubles. Even so, that doesn't mean you go around blabbing about your idea to everyone."

If protection concerns you, consider a dated and notarized disclosure letter, outlining the idea, your research and sources. Using a journal or log also establishes your operation as an active business and can be useful in documenting your new show idea as it progresses. Signed confidentiality agreements may safeguard your plans as well.

Overall, you'll find new ideas difficult to copyright, patent, trademark or protect with standard trade secret and unfair competition practices. That doesn't mean your show or some component of it could not be protected. For advice on legal rights and considerations, contact an attorney specializing in patents and/or copyrights.

According to Mackler, the greater risk in having others discover your research lies with an existing competitor who may become more pro-active because of your efforts. "You may wake up a sleepy competitor, who begins to get worried," Mackler says. "But if you've identified the need, and you already have people in the industry confirming it, you're in the driver's seat. The existing-show organizers are in a position of playing catch-up, even if they've had an established show for some time."

Knowing when to stop
Eventually you must complete your research and make a decision about your show idea. But how do you know when you've reached that point? Often, the answer comes down to timing, notes Denman. "With regional shows, you have to get your act together a year out," he says. "At some point you'll realize the best timing for the show and know whether you'll be able to meet that schedule. You may have already blown it for next year and have to put off plans for another season."

Money, certainly, determines how detailed your research can get. If you run a show management firm, you must separate the industries you most want to participate in from those that merely seem fruitful. "You justify spending more time and money on the ones that are important to you," says Mooney. "For example, Reed would spend more to research high-tech than we would the lumber industry, because we want to be in one and not the other."

Most show professionals admit that even after all their research, the decision finally to produce or not to produce an event comes down to gut feel. Do the pieces seem to fall into place? Do the potential exhibitors and attendees support the idea? Most of all, considering all you now know, do you think it will work?

"The paradox is that you have a lot of bases to cover, but you have to do it in a timely manner," concludes Smith at PGI. "You also have to remember: If it wasn't a little bit of a crapshoot, everyone would be doing it. The only time you'll really know if it was a good idea is when you open those doors and the people come streaming in. Or they don't."