How to Calculate Event ROI
September 10, 2017 | By Veloxity Team |
Are you struggling with event ROI? If so, it’s probably because there’s a lot that goes into the calculation of a successful event and most of it depends on your role. Here are the things you need to know to calculate it successfully.
In the simplest of definitions, return on investment measures what you spend on your event versus what you make. But there’s more to it than that. Because it’s not just your ROI. You have:
- Your exhibitors’ ROI
- Attendee ROI
- Client’s ROI
While all of these calculations take into account what’s put in and what’s received, when it comes to ROI calculations much of it falls upon the event planner to prove the return to others.
So how do you do it and ensure everyone is as satisfied with the financials as possible?
Steps to Calculate Event Return on Investment
To calculate ROI for event exhibitors, clients, and attendees you need to analyze the following and understand the influences of what goes into ROI for each segment.
- Understand their goals.
- Know what they care about and how that’s measured.
- Analyze timelines and competition.
- Understand and assess expectations.
What Is Return on Investment?
Return on investment in the generic sense tallies up everything spent on the event and everything made on the event. The equation is:
ROI = Net Profit / Total Investment x 100
This calculation gives the percentage of the increase or decrease on the event.
While you can leave it up to each group to calculate for themselves, and you’ll likely have to to a certain extent because there are numbers you simply won’t have, it benefits you to add to as much of that ROI discussion as you can.
After all, exhibitors are notorious for not following up on leads at trade shows, and that affects potential earnings. We can only imagine their hesitancy in doing a complex compilation of numbers that likely involve multiple people.
Why Calculate ROI for Others?
Without exhibitors/sponsors you might not have an event. If attendees can’t justify the expense, you’ll be shutting your doors. So don’t leave the number crunching solely up to them. Take the time after the event is over to look over their potential leads, attendance numbers, floor traffic, networking connections, activity, and more to get those numbers that will justify their interest next year.
What Goes into ROI?
The following things will influence event ROI:
- Understand Their Goals
Event ROI is somewhat based on goals. For instance, if your exhibitor is wondering whether attending your trade show was worth it, they need to ask themselves why they were there. If it’s to increase exposure, get interest for a new product line, or increase sales, these are all measured in very different ways. Sales will be a very cut and dry calculation, particularly if the product is sold at the show as a one-time offering. You simply add up what you sold at the time. If there’s a longer buying cycle with the product, you might also assign a value to leads you picked up from the show.
However, if the exhibitor went to make a name for their brand, sales may not be an expectation. In that situation, an increase in website traffic or social media shares or followers may be of more interest. Goals will factor into the ROI calculation so it’s important you understand what each person wants out of their investment.
- Know What They Care About and How That’s Measured
Again, as mentioned previously, the type of ROI largely depends on the person or group as well. For instance, an exhibitor will ultimately be deciding ROI and a cost-benefit analysis before a boss, board, or his wallet. A client may be analyzing what you were able to do versus others before you or when they handled it on their own. An attendee may be doing the ROI calculation based on fun factor: was it enjoyable and did I learn things I can use or meet people who will be helpful to me in the future?
- Analyze Timelines and Competition
Financial people may largely argue this point. You either made money or you didn’t. But timing can affect how people perceive the revenue. For instance, an exhibitor may only look at orders received during the show, leaving out connections and leads that later become sales.
Since participation is not always determined by raw numbers it’s also important to point out how an exhibitor’s competition being present or not can affect their view of your show.
But what about attendees? How does timing and competition influence ROI? For them, timing could involve their company’s budget or revenue.
- Understand and Assess Expectations
Again, since some of the interpretation of the calculation is subjective, expectations also factor in. If someone expected a lot more than what they received, they’ll likely be unimpressed.
That’s why managing exhibitor, client, and attendee expectations are also very important to the return on investment.
Measuring ROI in Events
The aspects above all influence the ROI calculation but here are the things that will help you pull together some numbers that will likely help you influence your exhibitors, client, and attendees.
Ultimately, you only know what they paid to you. There are many more costs than what you’ll see such as travel, shipping, hotels, customer entertainment, etc. So you can’t do the ROI calculation for them but you can supply them with the following:
- Attendee numbers
- Exhibition floor traffic numbers
- Mobile app insights
- Directory clicks on their listing
- Leads collected
Attendees tend to be a little more subjective in their calculations because other than defending the expense to a boss when it comes to budget time, the decision may be largely theirs. But that doesn’t mean you don’t need to be involved and there are still things you could provide that would make them more likely to attend again.
If possible, use an exit survey of some kind to find out why they were interested in your event and whether it met their expectations. If you know their why, you will have a better understanding of what they need from you.
You can customize this list based on why your attendees come to your event but here’s a start of what you need to give them to improve their ROI:
- Past attendee discounts for a future event.
- Information like the number of people they connected with, if you tracked this through technology.
With attendee ROI it’s not so much about an actual calculation but about enticing them back. You do this by showing them an enjoyable time at the event and giving them post-event value.
Your clients want to make sure you made them money but don’t stop with mere registrations, ticket sales, and attendance. Include these things too:
- Sales opportunities and future sponsorships.
- Analytics on social shares and follows before, during and after
- Website traffic and content interaction before, during, and after.
- Mobile app insights.
- Showroom floor traffic and exhibitor stats.
- Early bird registrations.
- New versus returning attendees.
Finally, provide them with ideas of how you plan on building on your post-event momentum and expectations for next year.
ROI is only a number, not good or bad, if you have nothing to compare it to. If you have never tracked ROI in the past, begin now. If you have, be as consistent as possible in factoring in what goes into your calculations and when they are collected. Your website hits may increase slightly up until a few weeks after your event. Putting together your numbers too soon after close may mean you aren’t able to capture some of that residual uptick.