Thinking about return on investment when it comes to event planning can send even the savviest of event profs into a head spin. But it’s not as scary as it sounds.
Return on investment simply refers to the value you’ve gotten out of your event vs the money (and time) you put into it.
One of the main concepts to get your head around when thinking about ROI is that there are different types of value to consider outside of profit alone. Like the acquisition of new leads, new partnerships and new social media followers. Increased brand awareness, or increased awareness of a charitable cause are also good examples of some of the non-monetary wins to be gained from events.
(Some of these things will, of course, lead to monetary gains later down the line, but we’re talking about gains that aren’t a direct profit here).
Measuring the ROI of your event is about adding up all of those objective and subjective gains, and comparing them with the money and other resources you put into the event.
Let’s take a look at some of the key stages of working out your event’s ROI:
Figure out your event success metrics
To measure the returns you gained from your event, you’ll need some key performance indicators (KPIs). To work these out, think about what your main event objectives are – do you want to turn a profit? Raise money for charity? Reach a new audience?
They can be quite abstract at first, but then you’ll need to drill them down into measurable points of data, like the number of people talking about your event on social media.
We’ve written an article on some of the main KPIs for events – but it might also help to do some research around your specific event type and what others tend to use as KPIs for them.
Gather as much tangible data as you can
Now that you’ve got your KPIs in place, it’s time to look at the data they generate.
Gather as many numbers as you can so that you’ve got real data to show for the gains you make from your event. To gather this data, you can use things like social media analytics and the analytics provided by your event registration platform.
For example, Ticket Tailor’s custom questions can help show you who you’re selling to and when.
Once you have this data, you’ll have a much better view of your return on investment. You can say X amount of investment led to X, Y and Z gains.
It’s difficult to work out a percentage ROI based on these metrics, as they can be hard to quantify in terms of monetary value. But you can translate some of them into even more tangible data.
For example, you could compare ticket sale data with social media analytics to work out if there’s a correlation between engagement with your brand on social, and ticket sales increasing. In this case, your KPI around social media mentions would translate to an increase in profitability for your event.
Work out cost per acquisition
To help monitor your ROI, it can help to figure out the cost per acquisition for things like new leads or social media followers. For example, if you gained 300 new social media followers from an event that cost you $1000 to stage, you’d simply divide the $1000 by 300, which would tell you each new follower cost $3.33 to acquire. This is useful to know because it gives you a benchmark to measure other events against. If you manage to get this cost down in the future, you’re getting an even better ROI. If the cost goes up, you know your ROI isn’t working as well for you as it could.
You can also look at how much others are spending on similar gains by doing some research to compare how your spend fits in with the industry standard.
Here’s how to work out your event ROI if your key KPI is turning a profit
Working out your ROI from a pure event profitability point of view is relatively simple. You just subtract the total cost of staging the event from the total revenue generated, divide that figure by the total cost of staging the event, then times by 100.
So if you’re event cost $1,000 to put on, and generated a total revenue of $3,000, the sum would look like this:
3000 - 1000 = 2000
2000 / 1000 = 2
2 x 100 = 200
ROI = 200%
Working out event ROI spans from a few simple sums through to pretty complex calculations, depending on the scale of your event, though. If you’re running something on a larger and more complex level, it’d probably be wise to hire a professional to help you out with this.
But for smaller events, arming yourself with some basic knowledge around event success metrics can go a long way towards making sure your efforts are genuinely paying off.