Events: A Model for Measuring
A study in 2013 showed that more than $500 billion is spent on events worldwide each year – so clearly they work. However, before you start you need to consider how you are going to measure the return on investment (ROI) and ensure it achieves its objectives. According to the Event ROI Institute, meetings and events create value to stakeholders by influencing the behaviour of the participants. This is the only way. If the event does not make participants do something they would otherwise not have done, there is no value.
Sales Incentives – Are they really delivering?
Let's consider sales incentives. "That trip was fantastic – I can't wait for the next one" – it's regularly heard after an all expenses-paid trip to a far flung destination and it provides excellent feedback for the programme website and organisers. But how exactly do you measure the output? Has that person changed their behaviour, or would they have qualified anyway based on their usual volume of business?
It's all about Setting Measurable Objectives at the Outset
So in the case of a sales incentive, you have the data for ongoing performance and you can look at what sales you could normally expect over a given period. For a rough guide, you can subtract the cost of the incentive to calculate how much you have paid out to deliver that incremental business.
A Model for Measuring
In the past, a questionnaire used to be considered sufficient to find out if people had enjoyed the event. Very little notice was taken as to whether it had delivered on its financial objectives. Nowadays, budgets are tighter and business has got smarter.
With customer events, measuring ROI needn't be complicated. You know how many customers you have, how often and how much they purchase, so you can set a target for the event and measure against it, for example:
Number of new customers signed up
Number of orders taken and value
Expense to revenue ratio
Average order value
The Event ROI Institute use a model based on the models of Kirkpatrick and Phillips:
Beginning at the bottom, you need to make sure you have the right target audience. Then you need people to be satisfied with the environment so that learning can take place – this is quite often where post-event questionnaires stop. For the learning, it's about changing the mindset so that people can then change their behaviour – what are they going to be doing differently after the event (behaviour). This leads to the impact on the business which allows you to calculate the ROI and work out whether this has been an effective way to use your budget.
So, in summary the key is to think about what you want to achieve and how you are going to measure it before you get carried away with working out which venue to choose and how to arrange the logistics.