Eventdrive

How to calculate an event’s return on investment?

30 May 2019 | Temps de lecture : 4 min.
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You think satisfaction rate is all you need to measure the success of your event? Let me confess you a tip: do you know what ROI is? ROI or return on investment is the new must-have of the event sector.

The main benefit of this method is that you can calculate the impact of each step of your event management process. In this article, I unveil to you everything about return on investment.

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What is return on investment?

Return on investment is financial indicator expressed as a percentage. It’s calculated thanks to the ratio benefits / cost of the investment.

Finally, the return of investment replies to the question: is my event profitable?

You can use this method to take the best decisions for your business: what actions can increase your return on investment, meaning to reduce costs, to increase benefits or both?

You can choose to:

The impact of the event goes beyond the revenue generated and you can prove it to your hierarchy. ?

Why to calculate the event’s return on investment?

To measure its efficiency

 An event is always integrated in a global enterprise strategy and it responds to a strategic objective. For instance, if the objective of your event is the increasing of 30% of your product selling in the next 6 months, the cost of your event do not have to exceed the incremental sales turnover. To know this, you need to measure the return on investment: cost of the event / incremental turnover generated. Find out how to set the objectives of your events in our article.

To justify your expenses

 Excepted if your are at the head of a corporation (and yet, you may have investors), you have to be accountable to your hierarchy. If you want to organize an event even crazier the next year, and so to obtain more budget, you must prove by A+B that the event of this year has been successful.

There is nothing more efficient that the return on investment in this case!

To take the right decisions

If you succeed to identify the return on investment of each step of the event management process, you could:

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How to calculate the event’s return on investment?

The consistency between all the stakeholders

An event is an enterprise’s action integrated in a global strategy. The keyword is so the CONSISTENCY. If the experience of your participants has to be fluent, the calculation of your ROI will be the same way too.

The definition of return on investment of your event has to be the same for the whole of the stakeholders. First of all, ask yourself what is the aim objective: improve adhesion, reinforce motivation, secure the loyalty, incite to the purchase… Your actions must be integrated in this collective vision, and do not only fit with your personal objectives.

The calculation formula of the return on investment

Return on investment = (benefit of the investment – cost of investment) / cost of the investment.

 The benefit can be :

 If an investment costs 1000 euros and generates 1500 euros, the return on investment will be equal to : (1500-1000)/1000, equals to 50%.

Return on investment analysis

If the ROI:

Thanks to the tools of today, you can now evaluate each step of you event management process. Indeed, it is so much easier to gather the right information to measure an accurate return on investment. Find out our article about the indicators to follow in the event sector.

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