How to Calculate Event ROI
Last month, we broke down the first few steps of the ROI Methodology® for event planners and event planning companies. When you dive deeper and follow the specific order for communicating and implementing ideas, you are well on the way to crafting a lasting impact at your next event.
Calculating Your Corporate Event’s Return on Investment
We’re moving on to the big leagues — the highest-cost events of the year demand a return! In this part of the series, we’re diving into how to calculate event ROI through steps 6-10 of the ROI Methodology®.
Just as you would assess how much you spent and how much your home’s value had risen after renovating a kitchen, you must know the cost breakdown and what elements have changed as a direct result of your event. Certain costs are easy to put a price tag on. But there are also multiple intangible influencers for every event — from social responsibility, creativity, and culture to networking and teamwork.
Event ROI considers all of these factors and provides your team and clients with the best information to make decisions moving forward.
1. Isolate the Effects of the Event.
A host of people and groups have a say in how a meeting affects a company. Phillips says, “One of the most critical steps in the process is to isolate the effects of the program on impact data. This identifies the amount of impact directly connected.” (1) To do this, you will need control groups or trend lines to visually show a comparison; the data for these comes from the participants, management, experts, and customers. You must prove that things have changed for the better because of the event.
2. Convert Data to Monetary Value.
Once you have the data for your event in hand, you begin to capture details and can paint the ROI landscape for the executives and planners you are working with. To convert the data to monetary value, a planner will identify units of improvement, find that unit’s value, determine the change, and calculate its total value.
3. Identify Intangible Measures.
With your events, there will be a variety of soft measurables that you must link to hard measures — when the effects produce winning results; you need to know how the intangibles translate into actual gains!
For example, after a corporate retreat, analyze employee engagement to sales team revenue (2), and you can easily find the value of a company-wide retreat that inspires action.
4. Capture the cost.
While it may seem cut-and-dry to provide the cost of a corporate event, the analysis must include every expense, direct and indirect. Planners need to include everything from the initial cost of analysis to the employee group’s time away and overhead costs. When approaching this step, a team of people may need to scope every aspect of the event to be sure the entire cost is evaluated.
5. How to Calculate Event ROI.
We’ve finally arrived at the capstone of the entire event and event management project. For the seasoned corporate event planner, nothing provides as much satisfaction as seeing these ratios for the client. From the data captured and analyzed, you can provide the benefit-cost ratio (event benefits divided by the costs) and the return on investment (net event benefits divided by the program costs x 100), with the payback period (program costs divided by benefits). These numbers will determine the success of your event and the likelihood of establishing a lasting relationship with your corporate partners.
As planners, we have a myriad of responsibilities; with our highest-cost events, the ability to calculate ROI sets you apart and gives planners the strength to grow our businesses. When you isolate the effects, identify intangibles, capture the cost and calculate the return on investment, you build a lasting legacy of dependability and become indispensable — by bringing as much information to the table as possible!
Want to learn more about how to calculate Event ROI? Check out becoming a fully certified ROI Methodology® professional here.
Philips, Jack J. “The Roi Methodology in 12 Easy Steps.” ROI Institute, 2019, p. 18
Philips, Jack J. “The Roi Methodology in 12 Easy Steps.” ROI Institute, 2019, p. 19
