Return on Investment (ROI)

26 October 2008

Return on investment (ROI) has become popular in the world of events management as a criteria in the evaluation of events, but ROI is technically a measure of profit gained through an investment of monetary resources; in other words, purely fiscal.

Some suggest that Return on Expense (ROE)* would be a more proper adaptation of this concept as it would permit a broader spectrum of qualitative as well as quantitative criteria. Others contend that Return on Objectives (ROO) is the term that best reflects the multi-faceted nature of determining whether the event was worthwhile – and worth the expense.

Return on… has been co-opted by the events industry in many ways: return on event, return on experience, return on entertainment, and so forth, just as it has by other industries (e.g. return on subscription, return on customer, return on marketing, etc.).

The “bottom line”, or fundamental objective, is the ability to measure success, which is often more than merely economic, and is not necessarily reserved for the event organization alone; the “return” for the “user” – the attendee, participant, or the event organization’s client – must also be factored in.

• For training meetings and conferences, achievement of learning objectives, changes in behavior, and development of strategies would likely be measures of success.

• For conventions and exhibitions, walk-away value (e.g. new ideas and tactics) and acquisition of contacts (e.g. networking and sales leads) are often indicators of success.

• For festivals and other planned public events, levels of enjoyment and participation, as well as various social and environmental criteria might be the signs of success.

• For cause-related and fund raising events, increased awareness and endorsements may be more important than the amount of money raised.

• For life-cycle celebrations such as weddings, the emotional impact (the tears of joy in the father of the bride’s eyes) may be how worth will be measured.

It is important for event organizers to measure success in a variety of ways (and there are countless criterion that might be used), and to be able to communicate the outcomes of an event in reliable, reputable, and recognizable ways. The best method to illustrate success is often determined by the stakeholder being addressed. Some will want purely economic indicators; others will want additional data that informs design choices or marketing decisions.

However, one must plan to measure success in order to quantify success: decide what is to be measured, when it’s to be measured, and how it’s to be measured at the beginning of the event-planning process.

*The business definition of ROE is Return on Equity.

Back