Article after article has been penned about the "latest and
greatest "measurement techniques. Just like other "solutions-of-the-month"
embraced for a moment or two
by today’s business executives, event measurement is one that has sticking power. Why? Because event marketing is an economic investment that deserves and
demands to be measured so that executives can determine if their allocations of resources actually equate to the objectives achieved.
We hear ROI, ROO, ROR, ROW, ROC and just about all combinations
on the return-on-something acronyms. Let’s face facts. It is all ROI –
Return on Investment.
No matter how you slice and dice the subject, you are always measuring what kind of return you have received for a specific investment related to a strategy or tactic
selected for your event, meeting or trade show.
It may not be in the exact vernacular of your Chief Financial
Officer or Controller, but never-the-less it is all about the return. Return on
Investment / ROI is a financial
calculation that measures what return, in dollars, is returned for a specific financial investment. It normally is expressed in terms of a ratio – for each dollar invested,
what return was generated – for example, $6 return for every $1 invested.
So, no matter whether you are investing in a three-part preshow
promotion program to selectively attract your targeted audience to your exhibit
or you have designed
an interactive product demonstration to provide proof and benefit of your new product, you are seeking ROI – the return you generated on that investment. And when
one doesn’t generate the desired return, you’ll look for another option that returns a better result.
And, this ‘measurement stuff’ is not an easy task. It demands more than just
collecting cards off chairs from your live presentation, or swiping attendee
counting how many things your gave away. It demands that you have systems in place that generate data you can use to determine whether there was a return or not.
A system that captures and organizes lead information; a system
disseminates the collected information to the field sales organization so they
can take timely action;
a system that receives feedback from the field to determine how many of those "qualified" leads were contacted, how many became appointments, proposals and
eventually sales; and a system that reports the results in a way that your management understand the returns or value events and tradeshows are generating for
your business entity.
Let’s take a look at some exhibiting activities where you can measure ROI.
Potential Return on Investment from Qualified Leads
This is the most comprehensive
measurement. Eighty-six (86%) of exhibitors participate in events to generate
leads for sales. The key here is to have a system to capture
leads with information that can be categorized and followed up. Once categorized, perform an assessment of the potential value of each lead will give you and that will give
you the potential revenue from the show. For example: those leads were "qualified" with a total potential value of $250,000 in revenue. Let’s also assume your show investment
was $18,000. You can now calculate the potential ROI for the event on your $18,000 investment as: $13.88 for each $1 invested. [$250,000/$18,000]. The next step is to set
an objective for the sales force to achieve – making the ‘qualified’ potential revenue a reality.
Return on a Product Demonstration
The reason that you demonstrate products at
shows is that you have a pre-qualified audience who learns best by seeing and
doing (hands-on). Product demonstrations provide
proof and benefit of your offering. If you invest $5000 to create, set-up and execute a demonstration as part of your event strategy, then the return on this five thousand dollar
investment can be looked several ways:
1. What was your cost per visitor reached and compare that
cost to other the cost of other methods you use to demonstrate your product. If
you invested $5000 and attendees
participated in a demonstration, then the cost per visitor reached is: $3.33 per person reached. [$5000 / 1500 participants]. The question then becomes what other vehicle is
as cost effective to reach those 1500 attendees with this same level of experience.
2. What is the potential return on that $5000 investment?
You can make the ‘lead card’ a completed survey of how they feel about what they
experienced. From that you can
determine how many are "qualified" and how many of those qualified attendees would eventually buy as a result of "touching, feeling, experiencing" your product? Let’s assume
that 20% of the 1500 participants eventually would buy, and the average selling price of your product is $6500. That means the potential return on your investment for those
demonstrations is: $1,950,000. [1500 x .20 = 300 x $6500] $1,950,000 / $5000 investment = 390:1 or $390 dollars potentially returned for every dollar invested.
3. In this case you might also want to do calculations for
the total investment in the event to include the value of having the total
exhibit experience. So, if the total investment in
the event was $65,000, the potential ROI is 30:1 or $30 dollars potentially returned for every $1 invested. [$1,950,000/$65,000]
When we stray away from the rigid financial
definition of ROI, we can then look at the impact (return) for other tactics.
Impact may not be in dollars and cents. It may be something
like visitors per day compared to the investment to selectively attract those visitors through another avenue. Again, what return did you get for investing in attracting that specific
targeted audience? It’s all ROI.
Measuring the impact of a Live Presentation
We often conduct live presentations in our
exhibits to communicate a specific message to a large group of attendees—that
is, they all walk away with the same BIG IDEA and can
connect your name with your offering and their need. For example, UPS introduced their program "Guaranteed Delivery" through a live presentation at National Postal Forum.
Exit interviewing indicated that 77% of the audience remembered the words "guaranteed delivery". That is one metric, but the most telling metric is what kind of sales this
As visitors entered the live presentation,
their badges were swiped. This became the foundation for sales measurement. The
‘live’ leads were merged into their corporate sales
management system and UPS could then track how much actual revenue was generated from "guaranteed delivery" purchases by those who attended the NPF live presentation.
In short, they were able to calculate an accurate dollar ROI metric that also included a sales time frame.
In truth, most companies cannot yet track
leads to sales; however, you can manually calculate a projected ROI by
conducting a post event re-qualification (sales conversion study) to
determine how many of those who visited your booth have the potential to use your offerings and who would buy from your company within a specific time frame.
Here’s how you do that. Ask your sales group
to give you the average revenue per new customer (or by product line, etc.).
Multiply the average revenue (or total the projected revenues)
times the firm leads who, when re-qualified, indicated a potential and willingness to purchase from you in order to determine total potential revenue and compare it to your investment.
To calculate the ROI for your investment in a
live presentation, let’s say you invested $10,000 to create and deliver the
presentation and also determined you’d generated $75,000 in
potential revenue from this tactic. The potential ROI calculation is: 7.5:1 or $7.50 for every $1 invested. [$75,000/$10,000]. And, remember, there is a life-time value for customers, so
the direct impact is actually much greater when you include repeat business into your calculations.
The impact of a hospitality event
We often schedule customer hospitality events
in conjunction with our tradeshows and other face-to-face events. These provide
a social backdrop which can accelerate business
relationships. They, too, are measurable. Let’s assume you organize some type of customer hospitality and you invest $5750 to entertain 80 of your current customers attending
the show. The cost per visitor reached is: $71.88. [$5750/80]. This outcome can then be cost/result compared to other ways you may be using to reach current customers such as
direct sales calls or golf outings.
The cost per visitor is a good metric, but
the ultimate measure of success is how much additional business you identified
or potentially generated from this networking event. And, yes,
this can be measured with a bit of preplanning. Here’s what you do: Every staffer needs to have 3x5 cards or writable PDA’s for note taking between conversations. At the end of the
event you can download the opportunities. If the 80 guests identified $175,000 in new business opportunities, then the potential ROI for that event might be: 30.43:1 or $30.43 in new
business for every $1 invested. [$175,000/80] Then, look and compare these costs to other types of investments your company uses and that have the ability to uncover new opportunities
to this extent.
These are only the tip of the iceberg, as there are many
more exhibiting and event elements that can be measured such as preshow
promotion drawing a specific targeted group; in-booth
experiences that culminate in receiving a promotional product; recruiting new dealers and distributors; and user conferences that expand your product lines within existing customers.
Another important tip is when making an
investment decision related to trade show or private event strategies and
tactics, be sure to use results measured from past events and push your
company to increase the potential on the next event.
It’s important to not get caught up in semantics. It is
really all ROI and all about what you are going to receive in terms of
increased sales, increased profit, increased mind share,
increased brand enhancement or increased market share in return for making the investment.
© 2010 by Marc Goldberg and E. Jane Lorimer