Planner interest in measuring event ROI (Return on Investment) is on the rise, but there is still confusion around what ROI really is, or how to tackle it. Some believe it shows an event’s profit, while others believe it demonstrates the value of the event (ensuring its continuation as well as securing their jobs.)
ROI, originally designed to measure adult learning success, provides financial results in a format that makes sense to CFOs. In the broadest sense, ROI is the fifth level of event value, which can only be assessed after measuring all of the first four levels. These are usually determined by surveying a statistically meaningful attendee sample population:
- Reaction/Intent (Did you like the event? Will you use what you learned?)
- Learning (Did you actually retain the information? This can be given as a brief test.)
- Application and Implementation (Did you actually implement the actions the event provided the learning and incentive to do? This is usually measured months after the event.)
- Impact and Consequences (Translates the actions taken such as increased sales, or improved customer service into dollars.)
Only then are you ready to measure ROI – after you know what the attendees learned, did, and how that affected the organization financially. Of course ROI can be used to measure things that are referred to as “intangibles,” such as customer loyalty or employee retention – but only if your organization can place the dollar value on what the lifetime value of a customer is, or the cost of hiring new employees and training them.
ROI puts planners squarely on the front lines of the organization’s business, and requires that they gain access to information that traditionally has not been available to them, and, in fact, sadly, many companies do not track. The “magic” formula for ROI is:
ROI = Net Meeting Benefits ÷ by Meeting Costs
However, this means including ALL costs, from the internal organizational staff’s time, based on their salaries, to the attendee’s time away from their business – not just what is tracked in the planning budget. It also means including ALL the meeting benefits, including intangibles. That is a very tall order, which many companies, and busy planners themselves, are not prepared to measure. It certainly takes a substantial amount of planning and time (which must be calculated as part of the meeting cost!) to execute, and therefore is really only recommended for larger meetings.
While ROI is not for the faint over heart, there is good news: Measuring true ROI is not always required to prove the impact and value of a meeting. Information gathered from a well-designed survey, which isolates the impact of the event from other factors, such as economy and pre-existing behaviors, can clearly demonstrate value. What’s more, weaknesses in the event can be easily identified and corrected, creating continuous improvement.
To find out more about how to start your ROI plan, feel free to contact me at email@example.com.
Stacey Ruth is a certified Event ROI Professional, certified by the ROI Institute.