Here we convert the data we have collected to a monetary value. For example, if we have determined that the leadership training we provided at our annual conference reduced employee turn over by 20%, we can covert that to a monetary value by using a standard value that exists inside our company regarding the costs associated with replacing one employee who leaves unexpectedly.
At Level 5, we perform the actual ROI calculation. This is the financial ROI that we calculate by looking at the costs vs. the benefits. Here we realize the monetary benefits of the meeting. To get to ROI we have to do two things. First, we have to convert the data to money, and then compare that to the fully loaded costs of the meeting. For meetings and events, we typically examine the benefits and improvements that accrue over a one-year period. One year is a conservative measurement because a meeting or conference can create positive consequences over a much longer period.
The ROI can be initially expressed as a cost-benefit ratio – if you get a 2.5 CBR, this means for every dollar you invest in the meeting you get $2.50 in return. That 2.5 ratio translated into a 150% ROI.
Perspective: What are some of the major benefits for conducting an ROI analysis on meetings and events?
Dr. Phillips: There are several benefits. First and most importantly, this sort of analysis will make your meetings, events and conferences better and more effective. We collect process improvement data; we try to figure out what worked and what didn’t work so we can make adjustments. You want to be able to evaluate, make adjustments and make meetings more effective. And, when you learn about something that is disappointing, you can change things the next time around.
Second, collecting data at the various levels and reporting results that improve business measures is the best way to secure and even increase budgets for meetings. People who fund these meetings often want to see how the benefits of a meeting or event are aligning with company business goals.
Third, when ROI analysis directly ties the efforts of the meeting planning department to the overall business goals of the company, the image of the meeting and conference planning department is transformed. The event planner who champions the idea of analyzing the business impact of what they do will transform their jobs and their
functions -- and clearly demonstrate the value they add to an organization. Executives appreciate and reward the parts of the company that add value, and they will be less likely to cut those areas when budgets are tight. In addition, if an event planning department is regularly demonstrating value, senior management will likely be more involved, and that gets planners a seat at the table.
Perspective: What are some of the biggest challenges a planner may face when implementing a ROI program?
Dr. Phillips: Once a planner has buy-in from the organization to conduct a study, there are typically three major challenges they will face in the process. We have systematic ways to deal with these challenges and minimize the intimidation for those planners who don’t typically have experience dealing with these challenges.
The first area is collecting post-meeting data. At some predetermined follow up time, say three weeks or three months after the meeting or event, choose how you collect the data you want.
The second challenge is determining how to isolate the meeting’s impact from other factors that contribute to things like an increase in sales, or improvements in customer satisfaction.
The third major challenge is arriving at a monetary value. The good news is that most organizations have data within their internal systems that you can use to assign value to things like cost of employee turnover or a decrease in sexual harassment complaints.
In the context of our methodology, we refer to these issues as challenge blocks because they are the most difficult things we face. For each of these challenge blocks there are various methods and options to choose from that are more and less credible. Within our methodology, we are always trying to get to the most credible method that can we use based on budgets and other constraints.
About the ROI Institute
Founded in 2003, the ROI Institute represents over 30 years of experience in measurement and evaluation of training, human resources, technology and quality programs and initiatives. MPI is working in alliance with ROI Institute, Inc to develop tools, resources and training opportunities to measure and document the value of meetings and events. Visit the ROI Institute on the web at www.roiinstitute.net.
Jon Wollenhaupt, is Vice President of Excel Meetings and Events in San Francisco, and Marketing Committee Co-Chair /Meeting Professional International – Northern California Chapter. Jon can be reached at jonw@excelmeetings.com or 415-777-1231.
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