Total Cost of Ownership (TCO) and Your Next Exhibit

by | Mar 28, 2014

The concept of TCO (or Total Cost of Ownership) is often used as a product comparison tool. For instance, in the world of office printers, buyers compare products not just on initial cost, but on initial cost plus the estimated costs of owning and operating that printer over a period of time. This includes repairs, parts and ink cartridges. Naturally, when TCO is applied, what sounds good at the start may suddenly become the not-so-smart buy. TCO can also be used as a tool to compare two seemingly equal, but competing designs for custom booths.
Unfortunately, if people use TCO at all in the tradeshow world, the concept is often only partially applied. Certainly, there is a strong industry focus on reducing booth operating costs (e.g., show services, freight, storage, graphic replacement), but typically the key criteria in any design assignment is still the initial cost of building the booth, not true TCO. What would a true TCO based design assignment look like? Here are a couple of possibilities:
1. The key cost-related criteria in an assignment would not be cost to build, but instead something like a targeted annual operating cost over a set number of years, including amortized build costs, perhaps benchmarked against the costs of a previous booth.
2.  The assignment might also include the goal of increasing the effective lifespan of the booth by, for instance, two years. This would require what we call “future-proofing” the design; studying the factors that are most likely to outdate a booth (such as branding changes, new products, damage, the need for “newness”) and then designing in the flexibility and updatability to handle these things efficiently. Imagine what two more years of effective life and a deferred need for a new booth would be worth to a business? And what it could add to TCO.
If more customers used TCO, even if just as a second way to compare what appear to be equally effective designs, they might find a new approach to RFP’s and, as in the printer world, that the lowest price to buy, might not always be the best decision.