Many high-tech firms could be using other, more cost-effective strategies

Seminars have become such a popular marketing tool for high-tech companies that they're almost a corporate rite of passage. One gets the suspicion that many product seminars are held not because their sponsors think they're such a terrific vehicle for generating leads, but because they signal to the rest of the world that the company has "arrived."

So many companies have jumped on the seminar bandwagon the last few years, however, that the resulting glut of events has caused seminar response rates to drop significantly. That lower response, along with increases in AV, travel and hotel expenses, is forcing many companies to re-examine their seminar strategy and look instead to other, more cost-effective forms of lead generation. This article will attempt to provide some data to aid in that comparison.

There are many reasons why seminars can seem like the ideal marketing medium. The most obvious is that seminars provide a sales force and/or channel partners the opportunity to meet with prospects face-to-face. In fact, many companies regard seminar programs as having a dual purpose: to attract new prospects, and also to provide a venue for existing prospects to see the product demonstrated live. There's also the commonly held opinion that seminars attract the "right" type of leads, those people interested enough in the technology to spend half a day in a hotel banquet room hearing about it.

Seminars have their downside, too. We've already mentioned high cost and falling response rates. When we produce seminar invitations and other lead generation campaigns (those that offer a free white paper, information kit, demo disk, video, etc.) for the same client, we usually find that the latter programs generate twice the response as their seminar counterparts.

Seminars have geographic limits. Even if your company presents dozens of seminars in a year, chances are that some metro areas will go untouched. In addition, some potential prospects just never attend seminars, period. That includes a great many people with management titles who feel they simply can't invest the half-day most seminars require.

At our agency, we maintain the theory that seminar respondents are simply a subset of the people who respond to a well-crafted, "free information"-type lead generation campaign. In other words, the MIS manager willing to spend four hours in a hotel banquet room isn't going to hesitate to receive information on the same technology without leaving the office.

The chart below compares the typical cost of a six-city seminar tour (mailing 5,000 names per city) with that of a 30,000 piece lead generation campaign. All assumptions are rough and based on our experience - your costs and response rates will vary. Direct mail costs for both options are based on the identical format, a #10-size package including a two-page cover letter, four-color insert and business reply card.

	Seminars	Lead Generation
Mailing Quantity	30,000	30,000
Response Rate	1-1/2%	3%
# Leads	450	900
Direct Mail Cost*	$ 40,000	$ 40,000
Event Cost*	$ 60,000	--
Fulfillment Cost*	--	$ 19,000
Total Cost	$100,000	$ 59,000
Cost Per Lead	$222	$65
*  Direct mail cost includes creative, production, lists, postage, and agency fees. Event cost includes travel, AV, venue, food, collateral materials and agency fees. Fulfillment cost includes the cost to create an original 12-page white paper, along with the cost of existing material and associated postage.

Based on these assumptions, the cost of a seminar lead (not even allowing for the fact that as many as fifty percent of those people won't even show up at the event) is over three times the cost of those leads generated by a non-seminar, information-type offer.

There are ways to cut seminar cost. One is to partner with other companies and present joint events with hardware and software partners, resellers and consulting firms. In these cases, you'll have to decide whether the cost savings are worth the reduced "podium time," and whether the joint message muddies how you're trying to position your product in the market.

Technology offers other options. Many companies are experimenting successfully with seminars broadcast via the World Wide Web. Prospects register for the event in standard fashion (via phone, mail, fax or a company's web site), download a special plug-in for their browser that allows them to receive audio and video, and then at the appointed time and date, log in to a specific URL for the broadcast. Seminars can even be stored at that same URL for future broadcast on demand.

As a marketing strategy, seminars won't disappear soon. Many of today's high-tech products need a face-to-face, "live" presentation to be properly appreciated. However, the next time someone at your company says, "Let's do a seminar," think carefully about your options. For the same investment or less, you may be able to attract the very same prospects and hundreds more like them.