The event may be over, but there’s still work to finish up. That includes writing a post-event report, which in turn means gathering and analyzing data. Part of that process involves calculating your event’s return on investment, or ROI.
Why Is Event ROI Important?
Measuring event ROI is important for one simple reason: It’s a way to measure the success of an event. The higher the ROI, the more successful the event. Proving ROI is useful in itself as a measure of success, but it’s also useful because it’s proof of success. When you can point to hard numbers that prove the event achieved its goal, you have a solid case for attracting bigger budgets and more sponsors for future events.
There is a caveat here: For ROI to be a useful measurement, it has to be accurate and thorough. And that can be difficult to achieve, especially as events get more complex and it becomes harder to accurately measure all the elements of success. Sometimes ROI isn’t just about hard numbers.
First, the Hard Numbers… How to Calculate ROI for an Event
ROI is a measurement of revenue versus costs, with a straightforward core calculation. For that, you need your total event revenue (R) and the total cost (C) of the event.
ROI = (R – C) ÷ C x 100
Subtract total event cost from total revenue generated from sales. Then divide by total cost of the event and multiply the result by 100. That final figure is your ROI.
Measuring Goal-Related Event ROI
For a straightforward event where the primary goal is profit made from ticket sales, it’s easy enough to calculate ROI. But what if your event goals are less tangible? It’s much harder to calculate event ROI accurately if your event’s primary goal is to raise brand awareness or to generate new sales leads.
In these situations you can still measure ROI by adjusting what is meant by revenue. Instead of revenue related to ticket sales, it’s about measuring the primary goal of the event.
1. Identify the Primary Goal
The first step is to identify the main event goal that defines its success. If it’s not about ticket sales, what is it about? Some options include:
- Launching a new product
- Raising brand or company awareness
- Sales or generated leads
- Improving employee performance or education
Setting Event Goals & Objectives
2. Identify Measurable Metrics
Having an event goal is pointless if you don’t have some way of measuring how well that goal has been achieved. Whatever your primary goal might be, you need at least one—preferably more—event metric to help you determine whether your corporate event has hit the mark.
Those metrics should relate directly to the goal, of course, but it’s also important to choose metrics you know you can generate data for. Make sure you’re measuring parameters that actually can be measured so you have some hard data at the end of the event.
For instance, if you want to build brand awareness, some metrics to track might include:
- Number of event attendees
- Number of press attendees
- Number of media stories published
- Total social media impressions
- Number of social media followers gained
- Net promoter score
3. Gather and Analyze Data
With your goal and metrics set, you’ll be able to gather data in the lead-up to the event and throughout the event itself. Once it’s all over, it’s time to analyze the data and figure out what went right and if there are any spots for improvements.
For some metrics, you’ll want to start your analysis early. For instance, if you’re tracking brand awareness and customer sentiment, it’s important to have a pre-event baseline so you have a basis for comparison after the event. Keeping an eye on social media metrics is also useful in the lead-up to an event because it’s a good way to measure the success of your event promotion.
ROI Alternative for Sales Events: Projected Business Value (PBV)
For sales-focused events, a useful metric is projected business value. This is a good alternative to ROI that can work particularly well for products with long sales cycles. The longer the sales cycle, the harder it is to pinpoint the event value. Calculating PBV lets you estimate that value right away, instead of having to wait for data to track.
To calculate PBV for an event, you need the following information:
- Number of qualified leads (QL) gained from the event
- The company’s average historical close rate (CR)
- Added business value (BV) for the event – This figure is the average difference in value between clients who attend the event and those who don’t.
To find the PBV, multiple QL x CR x BV. The PBV represents a value estimate of the value the event provides, that wouldn’t have been gained had the event not been held. It measures how much value the event generates in the long-term and is useful to compare to other methods of lead and value generation.
Alternatives to ROI
ROI isn’t always the most important event metric, and it’s definitely not the only one. Especially for events where calculating the ROI is difficult, it’s important to consider other metrics too. Some options include:
- Website visits, content views, and social media engagement don’t add to your bottom line, but they’re a good way of gauging interest in the event.
- Net promoter score can show what your event audience thinks about the event and your brand.
- Sales metrics such as close rate and cost-per-lead are useful for sales-focused events.
- For virtual events or hybrid events, engagement metrics help you explore how people reacted to your event content.
ROI Helps You Understand Your Event and Prove Success
There are multiple ways to measure event success, all of which involve gathering and analyzing data. ROI is a useful figure that directly measures financial success, and, with a bit of retooling, the same principle can help you measure any event goal. Using ROI and other metrics to track your event success also helps you refine your event planning skills so every event you hold improves on the last. Working with the event planners at ProGlobalEvents can ensure you’re set up from the start to hit your goals and gather the data necessary to track event ROI. Contact us today to learn more.