It’s relatively new territory for me so I wanted my first blog to encourage some conversation and debate as I’m very interested to hear other people’s thoughts and ideas.
Last night I took part in a very interesting Twitter chat with other Event Profs on the topic of ROI. During my time in sales I’ve attended educational events with speakers on the subject and became more versed recently through my marketing and event management studies. Considering what I’ve learnt I wanted to bring up a question that I will touch on shortly.
In business terms, the purpose of the “return on investment” (ROI) metric is to measure, per period, rates of return on money invested in an economic entity in order to decide whether or not to undertake an investment. In event terms, ROI is the financial measurement of the return to an event’s key stakeholders as a result of outcomes from predetermined objectives.
While ROI seems to be the gold standard for proving the success of events, the calculation can become blurred by cross channel activity and uncontrollable economic and environmental factors.
There is an alternative, “return on objective” (ROO) which enables Event Managers to prove the event impact when it’s not possible or feasible to do so financially and this is the question that I wanted to raise. Should we be, or are we already, placing equal importance on both, “ROI” and “ROO” and, how important is this as a key measurement for event stakeholders?
Organisations now have a clearer understanding of their objectives when funding events however a survey in 2013 found that an estimated 70% of Event Planners worldwide were not actively measuring ROI. With technological advances I am sure that this has changed and we all now recognise the importance of setting SMART objectives and more sophisticated evaluation for pre, during and post event however, isn’t it also important to recognise that the choice of measurement will vary from organisation to organisation and event to event based on the strategy and objectives of the event?
The effects of an event can be multiple and include outcomes such as an increase of sales, community goodwill, increase of tourism and change in behaviour. These outcomes should relate to the event objectives and be measurable if you are to quantify ROI, how would you for example as an Event Manager measure a change in behaviour? The benefits of many events would be mainly intangible therefore wouldn’t that make it difficult to measure in financial terms?
There is also the payback period of an event to take into consideration, a payback period pre and during an event in relation to delegate registration for example is easy to measure however, consider the payback period for a company looking for an impact on their bottom line by hosting an internal training event?
We all understand the importance of financial management for events and ROI is a very effective and necessary tool however, isn’t ROO equally as important for Event Managers to measure some of the non financial outcomes that impact on decisions to hold future or repeat events?
I’d be interested to hear your thoughts #Eventprofs, until next time…