Event Management
Understanding and Calculating Event ROI
And How You Can Reach It
How do you determine if your event was successful? By the number of attendees, sales generated or connections that you built? Or you may bring up the concept of ROI. Unlike ROI for a portfolio of real estate investment, event ROI is a bit more complicated as there are many intangible assets that you may want to take into consideration. We all know that you have put a lot of effort into your events. So in order to see if your hard work has paid off, we definitely need to understand event ROI and the calculation behind the concept.
ROI stands for return on investment. It measures and evaluates the efficiency of an investment (in this case, an event). There are several ways to calculate the ROI. We will discuss each way later in details.
Objectives of events
Different kinds of events have their own objectives. Before calculating the ROI, there should be a clear picture of the purpose and goal of the event. Ideally, there should be one primary objective and several secondary objectives. For example, if your event’s purpose is to introduce the new product of your firm, then the primary objective might be to generate media awareness. The secondary objectives can be to increase website traffic and build connections.
Tracking marketing attribution
There are six marketing attribution models that can help you figure out your event’s ROI. Three of them are single-source attribution and the other three are under the multi-source attribution category.
Single Source Attribution
First Touch Model
The First Touch Model attributes all the credit to the first marketing channel that drives someone to your website or to have some interaction with your company. For example, if someone reads a post about your event on Facebook and checks out your website, then the post is considered as the first touch. It is simple to understand in theory but can be biased.
Lead Conversion Touch Model
The Lead Conversion Touch Model gives all the credit to the first marketing channel that generates the lead. We continue with the previous example, after visiting your website, the person decides to attend your event. Then your website is considered as the lead conversion touch. This model is easy to track and implement. However, it ignores all the actions that happened before the lead was generated.
Final Touch Model
The Final Touch Model gives all the credit to the last marketing channel before the final sale. For example, if the customer purchased your product right after talking to the sales representative, then the sales representative is considered as the final touchpoint. This model is probably the easiest model to implement since we are finding the last action that takes place before one becomes a customer. However, like the previous models, it ignores what happens during the rest of the marketing process and is therefore biased.
Multi-Source Attribution
W-shaped model
The W-shaped model gives credits to all marketing channels. The distribution depends on the marketers, but usually the three key points: the first touch, lead conversion, and last touch each receives 30% credit, and the remaining 10% is divided among the marketing channels that occurred between the first touch and the last touch.
U-shaped model
The U-shaped model gives credits to the first touch, the lead conversion touch, and every channel in between. The first touch and lead conversion touch each receives 40%, and the other channels share 10%.
Linear Attribution Model
The Linear Attribution is the simplest multi-source attribution model. It gives equal weight to every marketing channel. Although it is easy to implement, it ignores the fact that different touchpoints might have various impact.
Calculating Event ROI
There are three ways in calculating Event ROI.
Let’s look closer at the equation. One way to calculate the revenue that is generated directly from the event is to use the number of leads * likelihood of closing * average size of the deal. However, event revenue does not only include the money a firm makes from an event. The followings should also be taken into consideration: pipeline value, media coverage, attendees, connections, sponsorships, data collected, and brand image building.
The event expenses include but are not limited to travel expense of organizer’s team, paid promotion (social media campaigns, PPCs, KOL marketing), venue, labor, refreshments, stationery, and event-related technology.
We can also find the event ROI by first calculating the event profit, which equals to event revenue minus event expenses. Then we divide the event profit by event expenses to get the ROI.
We can use gross margin instead of event revenue to calculate the event ROI. Gross margin is found by subtracting the cost of goods sold from event revenue. Cost of goods (services) sold is the direct cost of producing goods or providing services.
Event ROI with EventBank
So, where does EventBank fit into your event ROI equation?
In order to calculate the ROI, you would need tools to collect and analyze data. EventBank helps here as we have an integrated P&L calculator that automatically records revenue from the sold tickets and you can also add any kind of cost and revenue in the platform. Moreover, sponsorship value can be added on a proportional basis (e.g. using only 10% of the annual sponsorship for one of your events). With a strong CRM system, the EventBank platform allows you to keep track of attendees and assess the marketing attribution base on the model you choose to use.
EventBank helps to increase your ROI by both reducing expenses and increasing revenue. The platform has multiple promotional tools such as professional invitations, automated reminders, and notifications, QR codes for social media sharing and more. These features help event organizers to attract more attendees, increase brand profile and generate more revenue.
With features such as online registration and payments and mobile check-ins, the EventBank platform helps to deliver smooth event management experiences and saves organizations a lot of time. As a result, you can hire fewer people to help out at the events and reduce expenses.
Last but not least, EventBank integrates multiple tools into one platform, thus eliminating the need to employ (and pay) for other tools and platforms for email marketing, CRM, payments, invoicing, and attendees tracking. What’s more, EventBank comes with two free event apps built-in, one mobile app for you to manage events from anywhere and one for your attendees for easy check-ins and maximum engagement before, during, and after the event. All in all, EventBank is a multi-functional platform that not only helps you to keep track of data to calculate ROI, but also boosts your event ROI at the same time.
Are you looking for a solution that could help increase your Event ROI? Learn about our event management software or start a conversation through our live chat (green bubble) in the right corner of the EventBank website.
Originally published at https://blog.eventbank.com/event-management/understanding-and-calculating-event-roi-with-eventbank/.
