As a small software startup we were excited to be exhibiting for the first time at SXSW Interactive 2012. But was it worth it? Here I’m going to detail our costs, sales and lessons from the big event.
We make a web app – Sitebeam – that tests websites automatically, and alerts you to what’s good and bad about them.
For 10 years we were a successful web design company, but last year we gave that up to focus on Sitebeam fulltime. After 9 months Sitebeam is making us more than our old company did in 10 years. We doubled our customers in the last 4 months. Generally things are going pretty well.
All our marketing up until now has been via word of mouth and a tiny bit of PPC advertising. So we thought SXSW would be a great place to start experimenting with exhibitions.
What we spent
We’re self funded so we didn’t have $350k to drop on a bling trailer and lavish parties. My aim was to test the water and not spend anything we hadn’t already earned (controversial, I know). Here’s our rough costs:
- $4,000 – flights & accommodation for 2 (from the UK)
- $4,000 – giveaway badges (artwork & production)
- $2,500 – SXSW presence
- $1,600 – stand graphics
- $1,425 – monitor, stand, electricity
- $385 – lead capture device
- $1,700 – other: brochures, free trial cards, food etc.
- Total: $15,610 (excluding salaries)
So our budget was small, but I knew we could lose every cent of that $15k and not have to worry about it. And given how little we knew, that was probably wise…
What we did
We bought one small stand space and flew two people (myself and David Ball) to man it. As you can see, it’s modest:
Our main innovation was giving away custom-made pin badge, which went down exceptionally well:
Our thinking was that each badge would appeal to a segment of our audience:
- The Next Zuck – entrepreneurs
- HTML5 Black Belt – web techies
- Pixel Pusher – graphic designers
- #trending – marketers
- Death to IE6 – everyone
All the badges were in high demand but the IE6 was the most popular. Our logo and URL are printed on the back, but they’re mostly intended as a gambit to attract people to our stand.
The rest of our setup was simple: a laptop connected to a large screen, on which we would manually give a 30-90 second demo of Sitebeam on. We gave away badges to attract people to our stand, cards which contained a pre-paid signup worth $120, and brochures with more detailed information. We ran our web application on-site because we predicted that the wi-fi would be an unreliable disaster, and it was.
How did it go?
For the first two days we were flooded with people. Dave and I skipped lunch for 2 days as we were talking to people non-stop. Had we had more staff, we could have spoken to many more.
For the final 2 days, we spoke to almost no-one. Once the SXSW Interactive event finished, we were still required to exhibit; early departure meant a $1,500 fine and being banned from SXSW in future. Because our tech audience had gone, we had a fraction of the attention – it was a total waste of time for us and most companies there. (We measured this: we had over a 90% drop in enquiries from Day 1 to Day 3).
Badges were very successful. Without these, we had virtually nothing to attract people to our stand. As it was, they were widely lauded, and we often saw people wearing them days later. They gave us some personality too, which helped warm people to us.
Brochures proved a total waste of time. We printed thousands and got through a couple hundred at most. We soon learnt people don’t want to carry that much dead paper around with them – they were full sized, 4pp – if we did this again, we’d hand out small flyers instead. Flyers also have the advantage you can leave them on dining tables around the event.
‘Free access’ cards were a surprising disaster. We gave out over 500 and in total we had just 10 people use them (under 2%). We reckon people just had too much physical stuff to care, but we’re seriously glad we didn’t rely on them.
The lead capture device was essential. We asked interested visitors if we could scan their SXSW badge with this ($385 rental, above) and email them free access. We got 440 leads this way, and within a week 41 of them – almost 10% – signed up for a trial. We also gained premium leads for some FORTUNE 100 companies and household brands.
Our stand was poorly designed. It just said our product name, and not what we did, or why anyone should care. Almost every single passer-by guessed that we did ‘analytics’ or ‘consulting’ (both wrong). It doesn’t help that we do something new and unfamiliar, but some description would have been better than none. And our name is much less important than that explanation.
What did we sell?
In total, we had 51 potential customers engaging with us after the event for a cost of $15,610, or $306 / lead.
It’s too early to know how those will develop, but that’s staggeringly high compared to our other channels. An average customer spends about $1,600 with us, so we’d need a conversion rate of 19% just to break even. That’s possible, and of course one large sale could easily pay for it all, but our average is generally much lower.
This infographic by Mashable mirrors our own experience:
Of course that isn’t entirely the fault of SXSW. We probably gave away too much (100 website reports per person), and we probably didn’t reach enough people. It’s not cheap to scale though.
So from a purely sales versus cost standpoint, we’d say it was a failure.
Publicity and networking
What about intangible benefits, like publicity and networking?
We were filmed a couple of times, but there was a distinct lack of press that we could see. We understand they were focused on a mix of (a) big companies with lavish spends and (b) small companies who had been pre-selected due to buzz beforehand (e.g. Highlight). They certainly weren’t trawling the aisles, looking for The Next Big Thing.
I don’t believe we were alone. For our last two days I walked around the stands with a camera, researching my last article on the best stands at SXSW. I was treated like royalty by most. Companies were hungry for publicity but there wasn’t that much to go around. Most of it was snapped up by a few that already had their press before SXSW had started.
To confirm this, we Googled for press received by the best smaller companies we met at SXSW. We couldn’t find any written after the event had begun.
Our networking opportunities were of limited value; we rarely met people of interest to us, although there were plenty trying to sell us their wares. We weren’t able to attend any of the talks as we were busy exhibiting so we can’t comment on those.
Was it worth it?
As a learning experience, perhaps. Selling face-to-face reveals a lot of truths about your own product, and forces you to hone your message. We don’t need to do that every year though.
Financially, it’s doubtful. However with a larger stand, more staff, clearer message and a finely honed offer, I suspect we could give away promotions to 3,000 people in 2 days, resulting in maybe 100 long term sales (approx. $160k revenue for us). That would start to be worth it, but it’s quite a gamble.
As a promotional tool, it’s winner takes all. I think if you’ve got the right buzz going into SXSW, it could be a way to capitalise on that. But I didn’t see any companies generating fresh buzz at the event – they were just cashing in what they’d already earned.
Let’s put all of this in perspective. We run a free website testing tool called Nibbler to promote Sitebeam – it provides free website reports in a similar way and attracts leads for us. We get an average of 180 leads per week from that at virtually no cost. So in the time we were at SXSW, we got 3x more leads from doing nothing. We got a lot more tweets, Facebook Likes and online buzz too.
In conclusion: SXSW is worth it if you can storm the event, but the chances are you won’t. It’s an expensive way to fail, but I suspect we’ll be there again.