Event ROI in Seven Easy Steps
By Dr. Elling Hamso, Event ROI Institute (www.eventroi.org)
The ROI Methodology has become an industry standard for measuring the return on investment in meetings and events. It has been developed by Jack Phillips and the ROI Institute Inc. over more than 20 years, and nearly 50 books are available on the application of the methodology to different industries. This is what you do in seven easy steps:
How does your event connect to the bottom line? Every event has to make a profit, or the ROI is negative. The profit formula is net sales revenue minus costs, so in the final analysis, your event must either lead to a sales increase or a cost reduction, or both. It is often helpful to ask yourself, ‘What is the problem or what is the opportunity that your event is intended to address?’ Is an event the best solution? What other activities will support it, how does it fit in the marketing mix?
The only way to generate value from an event is through the actions taken by participants. It is not enough that they feel or think; they actually have to DO something which creates value for the stakeholders. Events are all about changing, or reinforcing people’s behaviour. They usually need to do something after the event, but sometimes what they should do happens during it, or even before, as in the case of an incentive event. You probably have several categories of attendees, so you need to make a list of actions that you want each of them to take. Then ask yourself: ‘Why don’t they do it already?’
3. Know what the required learning experience is
How do you make participants do what you specified in the second step? Effective learning is experiential, learning through all five senses. What must they learn/experience at the event to change their behaviour? You learn information, but you also get to know other people, which builds trust. Changing participants’ attitudes to your brand is a learning experience. Take the desired action for each category of attendees in step 2 and ask: ‘How do we make them do that?’ Do they need information, or to connect with your sales staff or other attendees, or do you need to change their attitude, how they think about your brand?
The learning experience can’t be separated from the environment in which it happens. We need to apply psychology, sociology, cognitive change, musicology and neurology, to name a few. Research shows how such elements as light, music, colour and food influence the learning experience. Many events include speakers who present a message in words and pictures, where the presentation format often has more impact than the content. Research shows that bullet point presentations make the audience learn and remember less, not more.
After the event, you are ready to evaluate. There are many ways to collect data, but it is worth considering a well thought out questionnaire. Begin with the learning environment. Did the event fulfil expectations? Can participants use what they learned? Suggest some planned actions, and ask what they’ll do, or do differently, as a result of attending your event. If they take no action, your event will not provide any value to stakeholders. You don’t know if people will do what they say, good intentions don’t always lead to actions; but if they don’t even have the intention, your event has not been successful.
What did participants learn? How did their behaviour change accordingly? You do not need complicated tests to measure learning. It is often good enough just to ask how well people remember your information, if they changed their attitude to your brands or if they were able to establish useful connections with other participants through networking. For practical purposes we often ask the questions right after the event, but to measure changes in behaviour, you have to wait two to four months. Check if they implemented their planned actions. It should be sufficient just to ask them to tell you.
The business impact is the result of people’s actions. For customer events it is often sales. For internal events, it is often a cost reduction through greater organisational effectiveness. Consider whether the results you measure are a result of the event or influenced by other activity, like an ad campaign going on at the same time. The best method is to compare with a control group who didn’t attend. Then convert the business impact into monetary values (which is usually doable); the ROI is the business impact value, minus cost of the event (which gives the event profit), looked at as a ratio of that overall event cost.
The Event ROI Pyramid
The ROI Methodology is a tool for planning as well as evaluating meetings and events. It is often presented as the ROI Pyramid and you will recognise the steps above. First you set objectives from the top down; What is the Business Impact? What participant behaviour will create the business impact value? What do participants need to learn in order to change behaviour? How do we create a good learning environment. Results are measured from the bottom of the pyramid and up to the top. Were the participants satisfied, did we provide a good learning environment? What did they learn? How did they apply what they learned in their jobs? What value did that application provide for themselves, their company or the event owner. Finally, if we convert the impact value into money and subtract the event costs, we can calculate ROI.