Why Measuring ROI Is Important
At a time when all spending is being analyzed and reviewed, measuring the ROI of meetings is increasingly crucial.

“As meeting planners, we need to determine ROI, providing details on what to do before, during and after an event to prove that the meeting was worth the investment,” says Joey Reader, owner of A-mazing Events, a full-service event planning company. “It’s important to share with the stakeholder involved that the benefits of the meeting are improving business measures, including increasing sales, decreasing costs, etc.”

Linda Pophal, CEO at Strategic Communications and marketing professor at the University of Wisconsin-Eau Claire, agrees. “If you can’t provide evidence that your meetings and events are bringing benefits—leads, sales, etc.—to the business, the events take on the aura of ‘expense only’ and can become one of the first things to go. Actually, by always tracking ROI, in good times and bad, you can help to head off the unexpected scrutiny that can catch you off-guard during tough times.”

Interestingly, monetary ROI isn’t the only critical deciding factor for planners given the economy. Rather, the most meaningful outcomes are event satisfaction rates, attendance rates and metrics related to the net revenue. Along with event satisfaction scores, attendance rates and net revenue, planners are being asked for metrics such as room night count, sponsorships, level of responsiveness to client needs and increased service.

“There are several important benefits associated with supporting the planning and implementation of meetings through the application of an ROI methodology,” says Tamara K. Putney, CMP, EVENT Success, Oshkosh, and board member for Meeting Professionals International-Wisconsin Chapter (MPI-WI). “The decision-makers are able to improve the effectiveness and efficiency of meetings they manage. They are able to identify which meeting investments they should grow and expand and/or which they should discontinue or reconsider.”

According to Tami Gilbertson, CMP, WPS Health Insurance, immediate past president of MPI-WI and editor of Wisconsin Meetings magazine, “Meetings and events must align their goals to that of the corporation or they will be deemed unnecessary. Although it is slowly changing for some businesses, there is still an all-or-nothing approach. Meetings have to contribute in a positive way to the bottom line, and this can be demonstrated through ROI.”

Effectively Measuring ROI
To calculate the monetary investment of a meeting or event, add up all costs including food and beverage, hotels, entertainment, audiovisual and production, travel and so on. Then, subtract all income generated from attendees, sponsors and exhibitors and account for all the savings negotiated during the planning process with the suppliers, including group room rates, F&B minimums, discounts, etc.

“ROI is not an exact tangible with so many levels involved, but you can show the savings and value impact to your clients,” Putney says.

In addition to the monetary ROI, develop a list of meeting objectives. For example, the objectives might be to enhance brand perception, increase customer loyalty, and understand customer needs. If the objectives were met, the event would pay for itself; if they were exceeded, it would generate a return.

It also is important to keep ROI at the forefront throughout the entire planning process. Reader stresses that the critical step of the ROI process is developing the goals and objectives of your meeting, along with developing your evaluation plans and baseline data early.

“It’s important to collect data during and after your meeting when determining ROI,” Reader says. “When analyzing your data, you need to convert the data into monetary values. The last step is taking a look at the event’s actual costs, along with identifying the intangible benefits. All of these items are important when calculating your ROI.”

Gilbertson says that the key to effectively measuring ROI is to take a clearly defined objective and determine what will be the measurable outcome for each to be considered successful. For example, if one objective defines a profit of $10,000 for the event, track incomes and expenses to report out. If the company wants five prospects for every 50 meeting attendees, that can be monitored and tracked as well. 

When measuring a meeting’s ROI, it is important to gain consensus with management—or whomever you’re accountable to—about what is important to them and to the business’ bottom line.

“That becomes your focus,” Pophal says. “How do your meetings and events help to achieve those results? Often when planning these events, we operate based on general assumptions; we need to be at this event because the competition is or because it’s important for us to be in front of our customers. But if we’re not actually first identifying and then quantifying some tangible business benefit, it’s difficult to substantiate value, especially when facing tough questions from bottom line-oriented management.”

Metrics Defined
The specific metrics used to determine a meeting’s ROI varies by organization and depends on its customers and specific goals. Some common measurements include:

• Number of leads generated at the event, through the website, via phone, etc., measured over some period of time after the event and often at multiple points over time
• Number of sales generated; again, measured over some period of time
• Increase in awareness, which could be measured through pre- and post-event surveys among target audiences

Using tools such as e-sourcing, eRFP processes, web-based registrations, online booking tools, social networking and e-mail blasts can all support ROI with reports. The more you manage electronically, the more accurate your data will be.

Although Putney believes that ROI measurement is imperative to continued SMM success, it is also important that all stakeholders know that ROI calculation should never make or break an event.

“Intangible, nonmonetary benefits have very important value: Improved public image, increased job satisfaction and organizational commitment and, of course, improved client relationships,” says Putney. “These intangibles provide the most value to any organization.”

Todd Hanson, CRP, CPIM, president and founder of 
ROI Resource Center in Appleton, uses the Phillips ROI methodology to measure events at five levels.

“The key to measuring ROI is to do it credibly,” Hanson says. “This requires the use of an isolation technique which determines attribution of results to your particular meeting or event. When we measure ROI, we always measure at lower levels according to the methodology. It is at these levels that we gain insight into what worked, what didn’t, and how we can make the meeting bigger, better, faster, smarter.”

Common Mistakes Affecting ROI
As with any process, there are some inherent mistakes people make within the industry that can affect a meeting’s ROI.

“The mistake seen most often is not clearly defining the event objectives,” Gilbertson says. “It’s difficult to measure for an undefined goal. There are also instances when a meeting parameter is changed, and the ROI is not revisited to determine the impact.”

Hanson says that in some cases, companies focus on getting its people together, just knowing that there is a benefit in relationship-building and developing esprit de corps. But today’s audience requires more.

“Participants want detailed vision and mission insight, honest corporate updates, training that is on target and relevant, efficient use of their time, time allowed to connect with clients and family, or go for a run and play with a purpose,” Hanson says. “The days of indulgent beach Olympics are out. Giving back, for example with a community service project, is in. When you blow these things, people leave less charged up or, at worst, disengaged.”

Another common mistake planners make that inherently affects its ROI is investing in things that seem nice or fun, but may not generate tangible results, such as giveaway items or expensive displays.

“Again, everything should stem from the specific results you hope to generate among a particular group of people,” Pophal says. “That generally involves providing real, meaningful benefits that your target audience will value. Whiz-bang giveaway items may be cool and may attract attention, but if you can’t show an increase in whatever metrics you were hoping to impact, they’re not worth the time or effort.”

Another mistake is looking at only one type of data. Remember, it’s important to look at the meeting’s costs, but you also need to look at various levels of evaluation to determine the ROI. These levels include:

• Inputs/indicators (attendees, hours, costs, timing)
• Reaction/perceived value (usefulness, motivation to take action)
• Learning (skills, contacts, knowledge)
• Application & implementation (extent of use, task completion)
• Impact (productivity, revenue, quality, time, customer satisfaction)

“Sometimes companies make the mistake of analyzing the meeting details (food, entertainment, etc.), and they should be analyzing the results of the meeting or event,” Reader says. “Another mistake I see is not thinking about the ROI of an event or meeting until after the event. It’s important to discuss this piece in every phase of the planning so you can collect the data along the way and determine how you are going to report the ROI.”
Gilbertson believes ROI will continue to evolve as meeting professionals become more skilled at demonstrating return.

“There appears to be some hesitancy in embracing it,” she says. “It is seen as a cost analysis tool; it will evolve to be a meeting analysis tool. Not every planner is executing events for profit. There are meetings to increase product knowledge, educate sales teams or build prospecting data, just as a few examples. As more of these intangibles are identified and a tracking mechanism is assigned, there’ll be greater input into a meeting’s design and implementation.”

The latest Site Index Report (www.siteglobal.com) shows that three-quarters or more of the respondents believe ROI measurement will be a requirement of programs in the next six months to three years.

“I believe the industry must quickly adopt measurement of meetings and events as a best practice,” Hanson says. “You measure it to manage it, right? If we do not measure, we risk another implosion of the types of investments in people that we know, anecdotally and empirically, create strongly positive results for companies.”

By Maura Keller

Maura Keller is a freelance writer originally from Wisconsin.

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