What is Event Marketing Return on Opportunity (ROO)?
Only 11% of marketers say their decisions are based on data. Their reasoning tends to rely on past experience, intuition, and colleague or expert recommendations. But there’s a 15-20% increase in Marketing ROI for companies that put data at the center of their marketing and sales decisions, and companies that measure event performance are 41% more likely to expect increases in their marketing budget.
This speaks to the primary reason to measure event marketing, namely to protect or grow the marketing budget. Without evidence of effectiveness, defending budgets or asking for additional funding is difficult. A second reason to measure event marketing is to improve results. Without data indicating what is working and what is not, improvement is difficult. The challenge, of course, is determining what data to collect. Hint: It’s not always about metrics that relate to dollars and cents.
Return on Investment (ROI) is a popular metric because of its versatility and simplicity. ROI is a financial term calculated as your net investment (gain of investment – cost of investment) divided by the cost of investment, leaving you with a percentage that shows how profitable your investment really is. But when it comes to events, it is often difficult (if not impossible) to say that a financial gain resulted from attendance at an event. However, events are huge opportunity creators – paving the way for possible future financial gains or at least movement through the sales funnel. It is usually the responsibility of marketing and events to create that opportunity, and it is up to sales to convert the opportunity into closed deals.
Therefore, instead of talking about event ROI, use Return on Opportunity (ROO), which is equal to business value minus cost of investment, divided by cost of investment. This may seem like a subtle difference from the ROI calculation, but business value is a more holistic perspective that allows for the inclusion of important business drivers. It is not strictly a mathematical formula, because while some elements of Return on Opportunity (ROO) can be expressed in terms of dollars, such as pipeline opportunity, others are more about strengthening brand affinity and improving relationships with customers. ROO takes into account that events are instrumental for increasing brand awareness, accelerating anticipated timeframe for purchase of new or additional products/services, and strengthening customer loyalty and likelihood to recommend the brand.
At Sparks, we believe there are three areas you need to measure to demonstrate business value: pipeline opportunity, brand affinity, and relationship strength. Taken together, these metrics will help provide a complete picture of the business value an event can create. Collect the data you need to measure success in these areas by surveying attendees and event staff, and conducting lead analysis. You can also estimate a dollar amount of the pipeline opportunity created by multiplying the number of “hot” leads by the average sale price of your product or service.
Marketing leadership and other C-level individuals need to get behind an approach to measurement that services the needs of the whole business – not just sales – and doesn’t ignore the importance of customer relationship development and brand building. Events are not just a sales channel: most people don’t go to events wanting to be viewed as potential revenue. Attendees come to your event seeking meaningful interactions, and they will buy from you if you focus on creating great experiences and nurturing relationships.
Posted by Lisette Sheehan | Request as a Speaker
Strong believer in the power of data to drive smart decision-making. Enjoys making new friends. Lives for family. Avid beachgoer. It's 5 o'clock somewhere.