A topic that rears its head in meeting budget discussion is Return on Investment. But what do we really mean by that?
If you’re in the financial investment, ROI is pretty straightforward. Pay $100 in January for a share of stock and sell it in February for $110. Unfortunately, ROI in the meetings and events industry isn’t quite that straight forward.
If sales meeting, results in a rise in sales the next quarter, there is an ROI on your meeting. If you hold a B to C conference, charge a registration fee of $500 per person, have sponsor who cover 80% of your costs, it seems that you’ve made money and a darn good ROI.
Perhaps, a CFO will think that I’m naïve when I ask, is the immediate ROI what should be measured, or should the future ROI be measured?
With that said, do you ever think of ROO (Return on Objective) or ROE (Return on Experience or Event)?
I tweeted that question and asked the same one on Facebook. Here are responses from people who are highly regarded in our industry:
Mike McAllen @mmcallen - vote roe
Emilie Barta @EmilieBarta –ROO If u don’t meet ur objectives it doesn’t matter how much $ u spent. Plus ROO should include ROI & ROE as part of overall strategy
Emilie Barta @EmilieBarta – completely agree…u need to know ur objectives b4 u can figure out how to engage ur audience to meet those objectives.
Nancy Swiezy – ROR Return on Relationship
Liz King – if you mean Return on Engagement. Engagement has a higher return from a long-term perspective. It's one thing to inspire a purchase – an entirely separate thing to inspire a relationship. One gives you ROI and the other pays dividends over time that are hard to calculate, but extremely critical to the success of your brand
Adrian Segar – I’ve written five blog posts about this subject (had to check, didn't remember it was that many). Here's one http://www.conferencesthatwork.com/index.php/event-design/2011/04/conversations-relationships-value-part-1/, search for ROI on my blog for the others.
From Segar’s blog : Conversations => Relationships => Value
You can see, that there is a difference of opinion, which is a very good thing. ROI is only part of the equation. I love Segar’s equation above. Here are a few equations of my own, but bare with me as I was not the best math student, struggling through everything until I finally gave up a dropped Calculus.
Conversations + Learning + Relationships = Experience
Now, let me throw out an easier concept that can help lead us to the answer.
Return on Objective. When one plans a meeting or event, we plan with an objective in mind that we need to achieve. That objective could be to promote a new product to the public, teach a sales force a better way to gain new customers, gain a broader awareness for a cause, damage control for bad press, exhibiting at a tradeshow, etc., etc.
Before we go back to the equations, I want to be sure that we always understand what our objective is and the part of the equation that are required to reach that objective.
Conversations + Learning+ Relationships = Experience = Objective
Return on Objective = Return on Investment