ROI Model in Making a Case for Corporate Events
We have adjusted to life with masks, hand sanitizer, and physical distancing while vaccines are in the works. Still, many organizations are choosing to avoid in-person or omnichannel events into late 2021.
Safety precautions and the need to be fiscally conservative in 2021 make it hard to predict how and when the events industry will recover. What are the losses businesses will suffer from the lack of live events?
The Investment in Corporate Events
Events are often an investment in education, empowerment, or strategy for your people and your culture. According to the New York Times, “The damage to businesses’ investment spending is a key way that the economy could remain impaired even when public health concerns ebb.”
Corporate events are often the lifeblood of teams — well-curated moments for team-building and leadership development are crucial for the long-term health of a business.
Over the next several months, we will collectively hold our breath as we see the long-term effects of Covid on business in America. But one thing is sure — we must continue to invest in our businesses and our people to ensure growth in the coming quarters. Using the ROI Model, we can gain the benefits of corporate events with predictable outcomes.
BUILDING A CASE FOR EVENTS IN 2020
Despite the challenges facing marketing teams and event professionals, small in-person and well-done omnichannel events can be profitable investments to continue growing and strengthening your teams. How we invest in our people today will directly impact the recovery in 2021.
Whether it’s through investing in training programs or bringing nationwide teams together to prepare for growth, corporate events are essential to our people, our positions, and our future.
When you go to your company’s executives, be prepared with a well-researched ROI measurement and net profit to show your adjusted outlooks for Return on Investment in 2021.
WHAT IS ROI, AND HOW DO I CALCULATE IT FOR EVENTS?
According to Investorpedia, “ROI tries to directly measure the amount of return on a particular investment relative to the investment’s cost.” ROI is simply the benefit or return of an investment (value-cost) divided by the cost of the investment.
For events seeking financial metrics, you can calculate ROI by assessing the net profit and the soft positives — such as increased initiative, brand awareness, and company loyalty.
With corporate events, ROI comes when the expected increase in sales or personnel productivity exceeds the cost of the event. In 2021, we believe that events are still the main effective method of producing greater returns for your people and for your businesses. From virtual events to omnichannel events, you can equip your event to surpass the budgeted line item.
But you may be thinking, “How can I convince the decision-makers that my forecast is valid?” Great question.
MEASURE THE PROFITABILITY
We recommend following the ROI Methodology with Jack Philips and his team. Here are several phases of planning that you can use to evaluate if an event would be a gain or a loss.
By following this system, you can ensure that your ROI analysis is comprehensive and convincing for each decision-maker on your team. Here’s a brief look at how it works —
1. Review the 6 levels of data.
With this system, you will look at the reaction, learning, application, impact, and, finally, the ROI of an event. You will align your needs with a winning strategy that is backed by research and gives you a solid plan to attain a profitable ROI.
2. Plan for a return on your event and collect data from your event.
In this next planning phase, you will follow the first 5 steps of the ROI Methodology Model. From planning the evaluation to collecting data, you will start with the “why,” make it feasible with a solid solution, expect results and measure the profitability, and plan for those results!
3. Calculate the return on investment.
To calculate the return, you will isolate the effects of the event, convert your data to its dollar value, identify the intangibles, and capture the cost — everything indirect and direct. And then, you will analyze the benefit-cost-ratio and the return on investment.
4. Planning the report.
Pull out all the stops when you prepare the report to the key stakeholders! Decide on the suitable media to use and what audience to include in the report — be sure that your report is timely, targets your specific audience, and is unbiased.
Remember, If you don’t attain the ROI expected, that is the first step to improve your event by analyzing why and making the necessary changes. Be confident in the numbers you deliver.
PROVING AN EVENT’S WORTH
With all the world's challenges right now, a solid process for proving your event’s worth can create lasting relationships and produce genuine excitement over budgeting for the next event.
Our friends at the ROI Institute have built a simple and effective training method to equip business professionals with the necessary resources to know, apply, and thrive with ROI principles. We encourage you to check out their program and see if it can benefit your team during these days!
When you need an event professional who can help you bring life to the event’s vision, contact the team at Iron Peacock Events! We’re certified through the ROI Institute, Event Leadership Institute, and Digital Event Strategist to bring growth and the ROI model to your next corporate event!
