ROI: Beyond the Buzzword - Constellation Communication

ROI: Beyond the Buzzword

ROI: Beyond the Buzzword Author: Sandi Cain November 2008 Features Making time and money worth the investment

Education for meeting professionals has come a long way in the past decade, enabling planners to wear every hat from negotiator and Excel whiz to tech troubleshooter and etiquette guru. But economist is rarely among the hats in that closet. Now, with budget cutbacks looming or likely, air fares at astronomical levels and the need to travel across the street (much less across the globe) questioned at every turn, it’s time to add an economic notch to the skills belt: return on investment (ROI) expert. ROI chatter once was found primarily in think tanks and corporate board rooms. Now it’s become a business buzzword that has made its way into the meetings market. And it’s all about the bottom line. According to Ed Jones, president of event consultancy Constellation Communications Corp. in Atlanta, Ga., events are a business improvement tool. Return on investment is realized only when you make or save money through an event. To do that, organizers need to elicit certain behaviors from attendees to realize that return. Investment-based ROI can be very simple. If you spend $1,000 to organize a training session and generate $1,500 from registration, your gross ROI is $500. But that merely reflects the money side. The other question is whether those attendees learned anything and thought their time was well spent. Those measurements are a bit more complex, but the effort is worthwhile in the long run. Why Bother? According to Jones, ROI helps justify the cost of the meeting, provides information that may support additional expenditures on other events and encourages continuous improvement in event content and execution. “Properly planned events reduce the cost of sales, increase revenue, reinforce existing relationships with customers, partners or employees, or increase the speed of sales, production or decision making. In addition, many events create valuable promotion for your company, not only in the marketplace but with your employees,” he says.

Planners who want a seat at the strategy planning table within their organizations may be welcomed more easily into that fold if they can demonstrate the value of meetings to top management. Jones says that one of the greatest benefits to discussing ROI on meetings http://smartmeetings.com/issues/november-2008/articles/roi-beyond-the-buzzword

ROI: Beyond the Buzzword is that it opens a conversation with others in the company about business accomplishments. Calculating ROI helps planners determine if the meeting objectives were met and what improvements might be made. “Have the confidence to talk about what events deliver to the company,” he says. “If people do a better job with events and justify them, it will equal success for other events down the road.” According to some recent surveys, there’s lots of room for improvement. In an online study of 1,100 companies by Entelechy Partners in Little Rock, Ark., fewer than 20 percent of meeting sponsors believed the meetings were worth the time and energy that was invested. “That means 80 percent of the time and money spent on meetings is poorly spent and not considered to be worth it,” says I. Barry Goldberg, principal of Entelechy. Goldberg says there’s also a “very large disparity between the perception of how profitable and useful a meeting was between sponsors and attendees.” One of his financial company’s clients had been staging an annual three-day retreat that top management thought was highly productive. Attendees, on the other hand, described it as “death by PowerPoint,” Goldberg says—and that’s not a unique story. “The question isn’t how to better manage spending, but how do we make the time and money spent worth the investment?” he says. “If we’d shift the amount of time and energy spent on logistics, hospitality and food and beverage into content…companies would see significant improvement.” Getting Started Whether you plan staff meetings, companywide events, trade shows or conventions, you can measure ROI in many different ways; however you can’t get around needing an objective for the meeting. That means sitting down with the stakeholders who have a direct interest in the outcome of the meeting and getting them to agree on what they want to achieve. Maybe that’s the sales manager or HR manager. Maybe it’s the CEO and CFO. Maybe it’s you and your staff. Whoever it is, if you don’t know why you’re having the event, you won’t be able to judge its value at the end. Next, you want to make certain that someone guides the meeting toward those objectives. That doesn’t mean regimentation that turns attendees into a flock of sheep, just a focus on the task at hand. To accomplish this, some companies and planners use a dedicated meeting facilitator who will ensure objectives are met, while the planner concentrates on logistics and trouble-shooting.

“Facilitators make meetings more productive and guide the groups to making decisions and solving problems,” says Susan Nurre, certified master facilitator at The Facilitator’s Facilitator in Dallas. Nurre says the idea is to keep sessions on track and on topic to improve productivity. http://smartmeetings.com/issues/november-2008/articles/roi-beyond-the-buzzword


Another reason to use a facilitator: research indicates there’s a big difference between what companies think they should do to improve meetings and what they actually do. “The vast majority of people who worked with a facilitator said it’s a huge help to do that,” Goldberg says. “But only a very low percentage of them actually hire one.” Whether you conduct the meeting yourself or outsource to specialists, there are dozens of ways to meet goals and measure accomplishments, ranging from the basic to the technologically sophisticated. We could provide dozens of charts and graphs on the topic, but instead, we thought a few case studies might get the creative juices flowing. SMART CASE STUDIES Goal: Saving Money Don’t discount virtual meetings for some programs. Menlo Park, Calif.-based Unisfair has conducted virtual events for clients like Cisco Systems, IBM and Quest Software. The company claims such programs generate leads and demand at 50 percent to 80 percent of the cost of a physical event, and are ideally suited to marketing, recruiting and training needs. “We don’t believe physical events will go away,” says Brent Arslaner, Unisfair’s vice president of marketing. “Our message is that there are a lot of types of interactions that don’t need to be face-to-face.” Unisfair also offers virtual trade shows. Arslaner said one client sent top executives to Hawaii for a meeting while the rest of the participants attended from their desks. (No word on post-conference employee morale on that one.) Arslaner says online visitors may be more honest about their interest in a product and that the volume of quality leads easily can exceed what can be accomplished in a physical meeting. But there are challenges involved. “People who are there physically are likely to stay; it’s easier for online attendees to leave,” he says. Goal: Consumer Education Through Online Events When healthcare specialists Lluminari, in Wilmington, Del., wanted to get the word out about preventing osteoporosis among African-American women, the goal was to provide evidence-based health information to the 56 percent of American adults who search online for health information. They started with live events that drew about 900 people to learn about the topic. About 44 percent of these attendees then became “champions” in online communities across the country, teaching online what they’d learned in person.

“Our consumer learning levels went from a 30 percent increase to 140 percent increase (post event),” says Cheryl Heiks, director of communications and events for Lluminari.

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ROI: Beyond the Buzzword Goal: Fast and Easy Feedback from Small Meetings Quick feedback from a small group at the end of a meeting might only require little yellow Post-it notes. Johanna Rothman, of Arlington, Mass.-based Rothman Consulting Group, advocates this use for a quick indication of “return on time invested.” All it takes is some small Post-its and a flip chart or white board with the numbers 0, 1, 2, 3, 4 across the bottom. Ask everyone to write a number on a Post-it that represents the value of the time invested at the meeting. “Zero means it was worse than a waste of time; four means there is nothing better the attendee could have done with the time spent,” Rothman says. Then, collect the notes and put them on the white board above the number written on the Post-it. If 25 out of 30 people say a program was a total waste of time, you have a pretty good idea of the ROI on that puppy. Goal: Knowledge Assessment Companies that need to train huge groups on new product sales or new technology might turn to systems like those offered by New York City-based Unison Meetings to measure time well spent. Unison builds interactive training programs for 100 to 1,000 people. Its proprietary hardware and software provide real-time analysis, knowledge assessment and on-site certification, if applicable. For a pharmaceutical product rollout, Unison was asked to design a program that would provide feedback on how well sales reps understood the new drug through knowledge checks during the program. During breakout sessions, attendees were asked questions about the product. When one set of answers showed that only 55 percent of the audience got the answer right, the facilitators were immediately able to provide additional instruction on that topic. Follow-up reports to management included strength and weakness assessments for each attendee, allowing management to provide further training or clarification before the reps could make mistakes in the field. Goal: Problem-Solving for the Masses Mergers and acquisitions often result in the need to cross-train sales people on an expanded product line. One financial company in that position, Unison, wanted to cross train 2,750 managers—at once. Technology enabled that to happen. Unison conducted pre-meeting surveys to identify cross-selling obstacles. Attendees were then asked to come up with solutions that were entered into the system and automatically sorted into 10 categories. Attendees voted for the top three solutions using audience response technology. These were implemented within 90 days of the meeting and began generating additional revenue for the company. The client called the results “money in the bank.” Goal: Increase Client Base You’ve all seen the typical wealth-management seminar ad: come to dinner at Brand X Hotel and learn how to invest your dollars more wisely. Those seminars don’t generate http://smartmeetings.com/issues/november-2008/articles/roi-beyond-the-buzzword

ROI: Beyond the Buzzword much ROI for wealth managers, says POP Wealth Marketing CEO Paula Carlson, because those who have $1 million or more to invest usually don’t need investment advice. What they need are investment opportunities and knowledgeable managers. St. Paul, Minn.-based POP stages social events to introduce the wealthy and wealth managers in non-business settings to help them form relationships that will lead to an increased client base. POP first interviews the wealth managers to learn who they want to attract, then studies the target audience and invites selected people to very high-end, desirable social events. The events build trust between people, keep their promise of no business pitches and generate incremental attendance at other events. Since most wealthy investors have more than one wealth manager, the relationship building is the important part, Carlson says. POP reports a 35 percent closure rate as a result of these meetings. Financial managers who try to stage events themselves forget this part, Carlson says. “They don’t plan the follow-up to see if (attendees) are going to make a change, and it can take six to nine months for that to happen.” There was one notable exception to that rule of thumb: at a program staged for The Carideo Group in Minneapolis, a doctor from the Mayo Clinic asked for a meeting the next day. At that meeting, he handed the Carideo Group a $1.7-million management account. “He paid for the event literally overnight,” says Tony Carideo, president. Now that’s ROI! Goal: Measuring Convention Metrics Convention and trade show planners might want to know the response rate to early registration, how many attendees come back year after year or the lifetime value of new members recruited at an event. This was addressed in an educational seminar offered by Alexandria, Va.-based Marketing General at the recent ASAE convention in San Diego. Part of that program involves basic economics formulas to help you easily calculate these various items after a show. (See ASAE charts) Goal: Increase Association Profile and Membership Los Angeles-based Pivotal Events—whose tagline is “turning events into investments”— was asked to produce a conference in the U.S. for the Inter-Pacific Bar Association, a group not well known in this country. The firm also was asked to enhance the association’s profile in the U.S. and “leverage every opportunity to increase membership,” says Tracy Kwiker, president of Pivotal. The organization expected to raise and spend $2 million on the conference, but had less than $100,000 in seed capital. Pivotal had to raise the rest of the funds. By creating a host committee sponsorship program, Pivotal brought in early sponsorship dollars. Since most of these sponsors were recognized companies, the effort also raised the profile of the http://smartmeetings.com/issues/november-2008/articles/roi-beyond-the-buzzword

ROI: Beyond the Buzzword organization and helped drive attendance. The program ended up drawing 170 attendees, compared to the original 80 that were expected. Kwiker’s company also raised additional funds through a sponsorship program for members. Plus, membership was bolstered by increasing the number of speaking opportunities—which were limited to members only. “We got 60 new members and $10,000 in revenue,” Kwiker says. “We exceeded our net profit goal.” In setting ROI goals, planners who keep in mind the main sources of value from events—revenue, customer relationship management, cost savings and promotional value—are likely to be on the right path to demonstrating value for the events they arrange.

Sandi Cain, a regular contributor to Smart Meetings, is a freelance journalist who has covered the meetings, hospitality and tourism industries for more than a decade.

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Getting Started Start simple, says Ed Jones, president of Constellation Communications Inc. in Dunwoody, Ga. In a tabbed notebook, list the following:

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How the event might impact revenue or market share. How it can impact costs. How the event can save money (i.e., conducting training during a sales meeting to avoid extra travel for another session; developing reusable materials for a trade show). How the event can build the customer/partner relationship beyond what can be done by field sales. How it can create an impact for the company in marketing, PR, advertising or brand-building. (Estimate this value by taking the number of impressions your company gets from the event compared to the cost to generate that number through traditional ads.) How the event can help improve employee performance and satisfaction by comparing the per-person cost of the event to the estimated $300,000 it costs to replace a high-end sales person. Jones says that when people do a better job with staging and justifying the cost of events, it leads to success for suppliers and others involved, and thus to more successful events down the road.

[Note: Constellation Communications Inc. is a company that assists clients in producing identifiable, positive ROI for internal and external events.]

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