We are going to let you in on event planners’ secret to managing their success: calculating your return on investment (ROI).
What is that exactly?
It’s taking a fine-tooth comb through your event’s finances and determining what’s left after investing in your event. Together, let’s take a trip down the ROI lane and explore what it is and how to calculate it.
What is ROI
ROI is simply determining the ratio between the input and output for your event. Sounds easy right? The input is typically monetary and intangible investments and the output is your net profit. As you invest in your event, the value will increase. Examples of ways to add value include marketing, sponsorships and partnerships, venue, food, decorations, and of course labor.
However, before you do anything, the first question you should ask yourself is, “What kind of profit would I like to see?” This question will be the basis to determine your budget and setting ticket pricing.
In order to create a bigger revenue, you will have to either scale back your expenses or increase avenues for income at your event. We should also make an honorable mention that ROI doesn’t always have to be monetary. ROI can consist of solely increasing awareness of your event from leveraging tools like marketing.
How to Measure ROI
Okay, now the fun part. Math. To accurately calculate your ROI you have to subtract your input from your output. This number will reveal your overall profit. But there a few more steps to best measure your ROI.
Before calculating anything and prior to your event, determine your goals and create a strategy. Creating a strategy can look like reviewing analytic features on your event website or on social media for engagement. If you’re measuring attendance, you should use a tracker to count the number of attended guests and ticket sales. If you are looking for feedback, create a way to share that information with guests as they arrive.
Whatever you decide, having a strategy in place will certainly make your life easier after your event is over.
Next up, create a way to organize all of your data. Even though your event may have ended and you have determined your ROI, you need to be able to track that information against future and past events. Tracking your ROI over time is the best way to review your progression. Even the most seasoned event planners are constantly comparing their numbers to find ways to tweak and improve for upcoming events.
Conclusion
Don’t let all of your hard work and time go in vain. Make sure you are tracking your return on investment (expenses). What you pour into your event is directly correlated to the ROI.
And it’s not just about money. Consider asking yourself was the money and resources well spent. Reviewing your ROI after each event will help you improve on your ideas and make even more unforgettable events with an even greater ROI.