Show Me the ROI

If hosting an event is a significant part of a company strategy, why wait till the last chair is put away to start talking about return on investment?

By Phoebe Dey

Three words well known in the financial world are shaking up the meeting industry, requiring planners to take on a whole new role when it comes to organizing events: return on investment. Gone are the days of just pulling off a spectacular affair. Organizations, these days, must account for every aspect of their operation, and meetings are no exception.

In simple terms, ROI is the value received. It also covers opportunity costs – the expense of pursuing one alternative over another. Is it more beneficial for a company to plan its own event or will hiring an outside planner better serve its goals? It’s basic economics for any planner. Prove and quantify how money and time spent to hold an event generates a return on investment.

“Every client is looking for something different, but the bottom line that never changes is the budget,” says Barbara Day, vice-president communications and marketing for Meeting Professionals International (MPI) Edmonton chapter. “There is always somebody at the end of the day who is scrutinizing a budget, whether it is a corporate client, private business or non-profit organization. You have to justify every single thing you do,” says Day.

Planners and clients shouldn’t wait until the last chair is put away and the attendees are safely on their way home to sit down and discuss what was gained from hosting an event. If that’s the first time ROI works itself into a conversation, it’s too late, says Susan Ross, co-owner of Calgary’s Meeting Solutions. “ROI is a living process,” says Ross, “and it needs to start right at the beginning. You should look at it after the event is over, but if that’s when you’re starting, it’s the wrong time.”

Many planners, including Ross, follow ROI guidelines set out by MPI, an industry association which represents meeting and event professionals. The first step in implementing ROI is to demonstrate the value of a meeting by identifying your stakeholders and finding out exactly what they want. That audience might include anyone from sponsors to attendees, says Ross. Once these people are identified, you should pinpoint the goal of the event. Sometimes the CEO has a specific objective and the sales team has another.

“Knowing exactly what you are trying to achieve is a good beginning because without that information, you won’t be able to make a meeting meaningful and engaging. And if you can’t do that, you are already lost.”

Every kind of meeting or event should have a clearly defined objective that can be measured to ensure future success. Tools for measuring objectives range from budget analy­sis to satisfaction surveys to real-time audience response systems. Some goals are easier to measure than others, such as increasing attendance or realizing a higher profit at a fundraising affair. “Whatever you are trying to measure, be sure it is part of the objectives,” says Ross. “If it’s not, it’s a waste of your time.”
There’s no cookie-cutter formula to calculate ROI; some events are easier to measure than others.

Day recently worked with a client in the arts sector who had held an annual event for nine years. Last year, the organization wanted to put on something spectacular and memorable, so it turned to Day. Previously, attendance hovered at around 100 people, but after Day added that wow factor, attendance quadrupled. Since the main objective was to draw people to the event, the measurement gauge was as simple as counting heads. However, it’s not always that straightforward. The ROI of some events can’t be measured until weeks or months later. If you’re holding a safety training event, for example, implement a plan to measure the success of the session by measuring the number of injuries before and after the session. Even something like a client appreciation event can be assessed, says Ross. “You think you’re just serving drinks and showing them a good time but you should look at something down the road as a measurable, like client retention.”

Once those three steps – identifying stakeholders, setting objectives and establishing measuring sticks – are in place, you can then move onto developing the content of the meeting and planning activities that will reflect the organization’s goals. That’s when much of the logistical work sets in and, says Ross, and having an ROI model keeps the planner focused. But not everyone uses this step-by-step process. Ross loves the idea of being involved in strategic planning, but recognizes that some in her industry are reluctant to move past the logistics of the business.

Brent Taylor prefers to do nothing but planning and leave the development of content to his clients. Yet, Taylor, co-owner of Edmonton’s Timewise Event Management Inc., admits that more organizations are requesting evaluations to assess the event and whether it was worth the cost. “It’s so hard to measure and put a dollar figure on satisfaction after an event,” says Taylor. Without labeling it as ROI or following a specific checklist, Taylor still does more than simply booking rooms. “When we work with someone, things like the target audience and objectives are clearly set out,” says Taylor. “We use ROI without specifically giving it a name.”

The last step of the ROI plan is demonstrating or communicating the outcome of the event. Taylor focuses on two key aspects at that juncture: feedback and evaluation. By using results from an in-depth questionnaire completed by participants, he can then offer constructive criticism and feedback to the client. “Ultimately it’s the clients who know and can best assess their event,” says Taylor. “We put things in place so clients can measure their own ROI.”

Ross, by contrast, likes to take a more active role in the process. She concedes that ROI is still a bit of a vague concept but associations like MPI are working hard to solidify the model. The onus to learn ROI is on the meeting professional, she believes, if for no other reason than to help focus the planning process. “It’s still a somewhat of an elusive notion and we’re continuing to define it ourselves and figure out exactly how we, as independent planners, can incorporate it into our business.”

The final step of ROI – reporting – is an ongoing process. If you hold a sales training meeting, directly after the seminar is over you can test its usefulness by asking all sales people to demonstrate several benefits of using a specific product or illustrate certain sales techniques. “Then six months down the road, those same people should be able to show more product benefits and add three new sales techniques to their repertoire,” says Ross.

One of the biggest challenges the industry faces is when companies only focus on dollar figures and ignore the subtle rewards that staff, customers or the general public might glean from an event, says Day. “Not everybody gets it,” says Day. “Those interested in the bottom line and those who don’t see the need for décor, glamour or a platinum speaker, for example, will never get it. They don’t realize that by putting just a bit more effort into something, the return be so much more.”

Not surprisingly, one thing most meeting planners will agree on is that you can best increase your ROI by outsourcing your events. The majority of companies have meeting planners, only they are disguised as administrative assistants and other support staff, who are often loaded with other responsibilities. They have so many responsibilities that they can’t give the proper attention to pulling off a good event. “We’re on the pulse point of changing this evolution,” says Day. “And we’re seeing that those who are more educated about the process and are using professionals recognize that there is something more out there – those intangibles matter. And that’s simply what ROI is all about.”

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