By Mike Piddock
Event Return on Investment (ROI) is an important metric for any marketer, but it’s rarely a simple one to calculate.
When trying to determine the return on investment of a live event, a key challenge (often the biggest challenge) is attribution. As in, “to what extent (or how likely is it) that this result was actually caused by that event”. The ‘result’ could be a number of things, ranging from new clients signing, to an increase in activity on social media platforms, or an increase in brand recognition.
Let’s work through an example
Your company holds an engaging and interactive presentation for potential new clients. The audience consists of about 100 delegates. Over the next year, ten of those delegates sign as new clients. One might assume that the event directly led to the new clients and the new business, and the marketing and events department can take the credit.
Meanwhile, the sales team says they’ve been in contact with eight of those ten clients and have been sending them emails and plans for months, and they have all the data on the CRM system as proof. They believe that they won the client…
So… who’s right?
This is the attribution problem. It was actually a combination of the event team’s efforts and the sales team’s persistent activities. Usually in companies like this, where there are multiple decision makers and long deal cycles, it’s rare that a single action will contribute solely to success.
Now that we’ve recognized that the new clients and new business are a result of a combination of efforts, can we say it was 50/50 sales and marketing? That feels a bit unlikely.
Maybe 75% to the sales team, 25% general marketing team, and 10% attributed to the events team? Now it’s getting arbitrary.
There are so many possibilities and different combinations that could have led to the success, which is where it gets complicated.
So here’s the trick…
You don’t need to assign specific attribution values to events. Instead, you just need to use this attribution calculator template. It’ll help compare and review different events, or an entire portfolio on a single sheet.
Here’s how it works. First the template itself, explained, column by column:
- Name of the event (and the year, for reference, if you want)
- The date of the event- month and year (for quick sorting)
- Number of attendees
- The total cost of the event ( this will include staff travel costs and accommodation costs to get a fuller/better picture)
- No need to enter anything here- this column shows the cost per attendee
- Number of ‘deals’ won in a given period, after the event (depending on whatever your primary objective is)
- Number of ‘new clients’ won in a given period after the event (this is not necessary but will be a useful secondary metric)
- Total deal value (the return you’d measure in you ROI)
One grey area is ‘the given period’: for how long after the event can we attribute the new deals, new clients and outcomes to it? Don’t worry, we’ll address that later.
What data do I get out of this?
The model calculates a contribution based on the range of attribution percentages – rather than us being required to pre-determine the attribution to a specific set. The model calculates the amount of money the event generates for a range of different percentage attributions.
In this example we’ve set the lowest attribution value to 0.5% – this means that the event has only contributed a very small fraction to any deals that followed. The highest attribution value is set to 10% – which goes on to show that events are assumed to have 10% of the influence over the outcomes that follow.
After setting the upper and lower limits, we can check all the values and options in between. Contribution values can range between 0-100%.
What does it show and why is it effective?
Using a colour scale, we can demonstrate which events have delivered positive return on investment, i.e break even, at different contribution levels. Events that deliver a positive ROI (even if the contribution percentage is a small one) are considered to be better than events that don’t produce positive ROI, or do so at a higher contribution level.
One of the most useful things, about this approach is that it allows you to compare different events using the same scale.
Limitations of the model
As with any model, especially one that it trying stay simple, it has its limitations.
One of the main limitations is that it’s not clear how long (time-wise) the results from the event should be counted.
For example, say a new client signs 17 months after attending your event, how likely is it that the event led to that outcome? Well it actually depends on the industry, sales cycles, etc. That’s where you need to adjust the model to your individual scenario and business. The key thing is to measure things consistently, and to work within a reasonable time period, depending on your sales cycle.
Another major limitation of the model is that it does not measure non-revenue objectives of the event, such as increased brand equity, networking connections, or learning outcomes. But that’s a topic in itself – check out our Event ROI webinar.
About the Author
Mike Piddock is the Founder and CEO of Glisser, award winning audience response system and engagement software. Prior to forming Glisser, Mike was a Chief Marketing Officer working in the telecoms and financial services industries, where he was responsible for multi-million dollar budgets with a significant weighting towards client and employee events. Most recently Mike was at Octopus Investments, a London fund manager and venture capital company, where he helped grow assets under management from £500m to £4 billion in five years. Octopus ran over 200 events each year, yet by streamlining the meeting design approach and deploying technology and resources effectively, employed just one Events Planner.