First Free Story (1 of 3)Join Skift Pro
The days are long gone when organizations simply said, “Let’s put on a meeting.” That thinking has become outdated as planners turn to data and digital tools to better understand the impact of their events.
Enter the need to engage stakeholders when it comes to return on investment—and the need to prove it following an event. Two powerful forces combined to give planners the complex task of proving a meeting’s return on investment: the recession and heightened competition for each event.
“It’s no longer assumed that a meeting is necessary simply because it’s been conducted every year for 50 years,” as Terri Breining, president of the Breining Group said. “Planners have to make a case for the relevance of a meeting to the overall benefit of the organization. When the recession hit several years ago, one of the casualties was the belief that meetings are an essential part of business. The meeting industry generally wasn’t prepared with a coherent or consistent response to the ways in which meetings contribute to the success of an organization; meetings of every kind were canceled.”
Competition for attendees, exhibitors, resources and more, also intensified, according to Vicky Betzig, president and owner of Meetings Industry Consulting. “While return on investment became ‘the thing’ back in the early to mid-90s (and it was very complicated and hard to understand, much less determine), that was before there was such robust competition for every event,” said Betzig.
“Today there are at least 10, and possibly hundreds of, options to gain knowledge or skills, or make the sales, or network, only one of which is the live face-to-face event.”
Proving return on investment, however, is no easy matter, nor a one-size-fits-all exercise.
There’s a host of areas return on investment can address beyond financial returns, including attendance, learning, employee retention and motivation, and overall attendee satisfaction.
“Attendance, budget control, and satisfaction measure the activity of an event, or how well we may have done in execution, but participants can be highly satisfied with an event’s execution and not move the needle one iota on the important business outcomes the event was intended to impact,” said Tony Lorenz, CEO of AlliedPRA.
“Business outcome trumps everything,” he said. Among those outcomes are motivating and retaining employees, strengthening product knowledge, expanding user networks, growing sales, and driving brand awareness.
The Holy Grail
Return on investment on some intangibles may not be quantifiable, at least in financial terms, while others can be.
But financial return on investment—what Breining calls “the holy grail of measurement” —can be proven in areas like net revenue (from a meeting), increased sales, and employee retention.
On the Return on Investment Institute’s five-level methodology for measuring return on investment, financial return on investment is Level 5, Breining noted.
At Level 5, business impact is converted into dollars on, for example, increases in sales or the cost of customer complaints compared to the cost of the meeting. For Level 1, for instance, attendee satisfaction can be measured by a simple survey.
Planners today must be able to demonstrate positive return on investment in every area, according to Betzig. “Financial, attendance, press results and participant satisfaction/ evaluation scores – those are the ‘easy’ areas to show,” she said.
“Goals and specific numerical and measurable objectives are set out up front and planners work hard to make sure they are achieved. The return on investment is there or it isn’t.”
Budgets are determined on the meeting’s objective, she said. The same thing applies to “numerical” areas like attendance objectives, number of exhibitors and sponsors, evaluation or satisfaction results, with objectives based on increases over past events, she added.
Regardless of the area, Lorenz recommends planners take a conservative approach when dealing with return on investment.
“Event return on investment at its most strategic level gives an event a conservative portion of the credit for a strong move in a meaningful business outcome,” he said. “Events can’t take all or most of the credit for a business outcome. If it tries to do so, the event return on investment measure loses credibility – immediately – at C Level.”
With that in mind, Lorenz said planners should ask the event’s toughest critic for what percentage of credit the event should take and, as an example, reduce that by 20 percent. “Then all the argument about return on investment leaves the room.”
Lorenz believes it’s possible to prove return on investment for any type of event but “the level of work and rigor to do it with credibility is reserved for more significant projects.”
“For this reason, it’s still not done as regularly as we would hope,” he said. “With that said, the intrinsic value and power of events is undeniable. Events are part of our DNA, so other aspects of marketing and communications carry a burden of measurement, where events get a pass many times.”