Measuring the ROI of Your Event
Some marketers complain that events are difficult to measure. But, with a little prior planning, events measurement is not only possible, it’s downright simple. The secret lies in setting measurable objectives in advance.
Choosing clear objectives
What are some of the objectives that make sense for event marketers? They range all over the marketing map, from generating sales leads, to strengthening bonds with customers, to building community relations. For business marketers, event objectives typically fall into one or more of these categories:
- Achieve an ROI
- Build awareness
- Close sales, sign contracts or generate RFPs
- Conduct market research
- Enter a new market
- Gather new prospects for the database
- Generate qualified sales leads
- Influence the press or financial community
- Introduce a new product
- Recruit, educate, or motivate distribution partners
- Recruit, educate, or motivate new employees
- Retain current customers, penetrate current accounts
- Support your industry or community
Set only one primary and no more than two secondary objectives. This will keep your efforts focused, and avoid dilution. It will also allow you to line up every strategy, every tactic, under the objectives themselves. When considering various activities surrounding the event, you can ask yourself the question: “Does this support our mission?” If the answer is no, don’t do it.
Make your primary and secondary objectives as specific as possible. Then, attach a metric to each objective. For example: 350 qualified leads generated, 10 new business partners recruited, or a 20% increase in new product awareness from before to after the event.
Here are some ideas to stimulate your thinking:
| Primary Objective Associated Metrics | Associated Metrics |
| Introduce new product Number of demos given | Number of samples ordered Number of press mentions Number of qualified leads generated by product Number of RFPs requested |
| Generate sales leads | Number of qualified leads Cost per qualified lead |
| Gather new prospects | Number of prospects gathered Cost per new prospect contact Number of new accounts added to the database |
| Enter new market | Number of prospects gathered by industry Number of qualified leads generated by industry Number of RFPs requested |
| Sales Revenue | Number of transactions closed Number of purchase orders signed Expense to revenue ratio (E:R) Return on investment ratio (ROI) Number of new accounts/customers |
| Awareness | Number of attendees Pre-post event awareness levels Number of press mentions |
| Recruit channel partners | Number of partners recruited Cost per recruited partner |
| Geographic penetration of recruited partners | |
| Recruit new employees | Number of employees recruited Cost per new employee Employees recruited by skill category |
| Market research | Customer surveys completed Focus groups conducted |
| ROI | Return on investment ratio Expense to revenue ratio |
| Retain current customers | Number of customer appointments scheduled and held Number of new product demos to current customers Revenue closed from current customers |
Planning for data capture
Finally, you want to identify the method you will use to capture the data specified by the metrics. Here are some examples:
| Primary Objective | Associated Metric | Measurement Tools |
| Introduce new product | Number of demos given Number of leads generated by product |
Self-reporting by event staff Lead volume by product |
| Gather new prospects | Number of prospects gathered Number of new accounts added to the database |
Attendee RSVPs and registrations |
| Sales | Revenue | Sales lead management system |
| Awareness | Pre-post event awareness levels Number of press mentions |
Pre-post event survey of attendees Press coverage analysis |
| ROI | Return on investment ratio | Did-you-buy survey ROI calculator |
| Retain current customers | Number of customer appointments | Reporting by event staff and salespeople |
Measuring ROI
The holy grail for many marketers is ROI. But what is the best way to get at that metric? There are three common approaches to measuring the return on event marketing investments. All are useful, but they vary in their complexity.
The most complex approach to event ROI calculates the incremental margin contributed by the event. In other words, it asks: did my investment in event marketing deliver more value to the firm than would any other use of the money?
This method subtracts the incremental event expense from the incremental variable margin that was generated by the event. That number is then divided by the expense itself, as follows:
| ROI = Gross Margin – Event Expense / Event Expense |
To convert the event revenue to margin, you subtract out the variable cost of goods sold (COGS) and the direct cost of sales. Some marketers take this calculation to an even more sophisticated level by considering not simply the immediate revenue generated, but the entire projected lifetime value of the customer acquired at the event, and discount it back to today’s dollars, to recognize the time value of money.
In some companies, it can be fairly challenging to identify the COGS and the direct sales costs. In that case, the best approach is to use revenue instead of margin in the equation, as follows:
| ROI = Event Revenue – Event Expense / Event Expense |
To make it even easier, RegalCinemeetings has created an online ROI calculator tool that does the math for you.
In both of these approaches to ROI, the result is expressed as a percent. A zero indicates that the program broke even, and a negative number means a loss on the investment. If you spend $1 million to generate $1.2 million in new margin (or revenue), you’ve achieved a 20% ROI.
The third approach is simpler still. For the numerator, use the sales revenue resulting from the event, and in the denominator put the total event expense, meaning all variable costs. The resulting number is expressed in dollars, and represents the number of gross dollars returned for every incremental dollar invested. For example, you might seek to generate 10 revenue dollars for each dollar invested in event marketing.
This approach to ROI is relatively simple to calculate, which is a benefit. However, it overstates the value of the revenue to the company, and fails to express profitability.
Event marketing is measurable. It just requires some planning—and the discipline to do it.