Dun da da dun! At last, we've arrived at the final step of our event marketing checklist. We hope you've enjoyed following along and maybe even learned a thing or two. In this post we will explain exactly how to determine your event's marketing ROI. ROI is often judged by a vague set of factors that aren't precise or even relevant to an event's bottom line. By the time you finish reading today, you'll have the information (and a few magical equations) you need to accurately determine your event's success.
Which Key Performance Indicators Matter Most to Your Business?
There are effectively two ways to determine the marketing ROI of your events: anecdotally and mathematically. For an anecdotal evaluation, you are simply looking to get an impression of how your event faired, relative to your initial objectives. Were you able to increase brand awareness or enhance customer loyalty, and in what ways? Did you increase sales or the number of leads generated? Were you able to increase customer loyalty and provide valuable education to attendees? Granted, this can be an imprecise way to grade an event that you’ve spent a lot of time promoting in very deliberate ways, but it does provide a valuable first impression of your results.
For objectives like ‘improving brand awareness’ and ‘providing education’, which qualitative rather than quantitative, you might think of implementing a post-event attendee survey to calculate a more tangible measurement of your success in those areas. If attendees respond favorably to questions about their impression of your brand and the quality of instruction, then you did well. If they don’t, then you’ve got some things to work on.
Truly Understanding Your ROI
If you are interested in gaining a deeper understanding of how your marketing efforts paid off, you will need to do some math. But don’t worry; it’s nothing you didn’t do in high school. The bigger task is gaining access to the financial data you’ll need to perform the necessary equations. If this information isn’t readily available, schedule time with your CFO or other powers that be so that you can be allowed access.
There’s a simple formula for determining the ROI of your events, and it can also be applied to your sales and marketing efforts in general.
Cost of Customer Acquisition (COCA): As put in The B2B Social Media Book, “COCA is the ‘I’ in ROI.” It is the cost to convert an account into a customer. To calculate COCA, add up your marketing costs, including salaries, third-party contractor or agency costs (i.e., the fees for your event website, printed collateral, and any content or graphics that you didn’t create yourself), overhead (i.e., venue rental), and paid advertising. To establish the total COCA for your business, you can also look at sales-related costs, including salaries and commissions, and operations costs (i.e., your CRM system such as Salesforce and other sales tools you may use).
Total Lifetime Value (TLV): TLV reflects the “R” in ROI, and refers to the average dollar amount your business receives from a customer over the lifetime of the relationship. To accurately calculate your customers’ TLV, first find out the value of an average sale. For a food distributor, for example, an average sale might be $750 per account per day, based on an average case price of $25 and an average order of 30 cases. If the lifetime of an account is five years, then its total lifetime value is $1,368,750 ($750/day x 365 days x 5 years).
When analyzing an event independently from your yearlong marketing efforts, your TLV figure will remain the same but your COCA expenses will only account for the dollars spent toward your event. Here’s an example of an ROI analysis of a food distributor’s trade show:
TLV: $1,368,750 (factored above)
- Event website: $3,000
- Printed materials: $2,000
- Third-party graphics and content: $1,500
- Marketing salaries during a 90-day event marketing cycle: $24,996 (2 marketers x $4,166/mo x 3 months)
- Venue rental: $51,000 ($1.70/sq ft x 30,000 sq ft)
- Miscellaneous expenses (venue wi-fi, security, swag, etc.): $10,000
From the equation, you can see that this distributor had a 13.8% return on their event marketing efforts. Whether an ROI is good, great, or below expectations will depend on the business and industry. No matter the case, as a marketer, you always have the power to reduce COCA and increase TLV.
Reducing COCA is relatively straightforward, and can consist of decreasing paid advertising spend in favor of organic lead generation, replacing printed materials with electronic media, and choosing a venue with more competitive rates.
Increasing TLV is all about generating more return purchases through greater customer loyalty. This can mean focusing more on leveraging technology and innovation at your events, providing more education and even better content at conferences and throughout the year, and creating more intimate relationships with customers through email and social media.
You’ve determined your objectives, implemented your tactics, conducted your event, and then measured your results. But as the saying goes, there’s no rest for the weary. Because once you understand what was successful and what came up short, what else is there to do but apply your knowledge to an outline for your next event?
So how does this ROI analysis stack up to your own? Are there certain figures you look at that sum up the overall success of your events? Let us know in the comments.