In response to these trends, there is an increasing interest in analyzing and evaluating “meeting ROI,” which evaluates conventions from a financial point of view. ROI, which stands for return on investment, is one of the representative performance indicators that measures business performance by dividing net profit by total investment. In the past, non-financial indicators such as the reaction or satisfaction of participants were used to measure the performance of conventions. However, as the importance of the economic value of conventions increases, there is an increasing tendency for ROI to be used to provide more tangible numerical information on the merits of the event and its performance.
In a book titled Return on Investment in Meetings and Events by Jack J. Phillips and M. Theresa Breining, six stages of evaluating meeting ROI are described. In the first stage, in order to measure the input factors, the number of events, the number of participants, and input costs are measured. In the second stage, the reaction and perceived value of the participants are measured. Questionnaires are usually used to measure and evaluate a participant's satisfaction with the event's program or service. The third stage involves evaluating how much participants have learned and how much confidence they have gained through the event. This involves measuring how much of the information, knowledge, and skills that were needed by the participants were learned via the event and how confident they feel about what they have learned. When considering the fact that the purpose of most events is to deliver and exchange knowledge and information. it is important to evaluate how effectively the knowledge and information were communicated to the participants.
The fourth stage measures application and implementation. This stage evaluates how much of the knowledge and skills learned through the event was actually applied and practiced by the participants in the workplace. The fifth stage measures the impact and results of the actions that were applied and executed in the workplace. For example, if a newly-learned customer retention management program was applied in the workplace, this stage would measure the actual increase in the customer retention rate. The sixth stage translates the data related to these events into monetary values, which includes all the costs of holding the event. In this way, ROI can be calculated by utilizing event impact data and cost data that have been translated into monetary values.
Many conference planners measure up to the reaction and perceived value of participants as described in the second stage, but the number of planners who measure the learning effect, as outlined in the third stage, is very low. In particular, starting from the fourth stage, it becomes more difficult to carry out these types of evaluations since they must be conducted after the conclusion of an event. Nonetheless, executives managing the organization are interested in analyzing ROI in the convention sector, as in all other business sectors that invest in expenses, because it has the following effects.
First, measuring meeting ROI helps investors and organizers grasp the actual performance of the event and find ways to improve the effectiveness of future events. Second, based on the results of the ROI analysis, it is easy to identify events that should be reduced or eliminated in anticipation of the events that need to have their budgets increased. It also improves the efficiency of the event's investment. Third, if a planner that is hired by the sponsor of the event is actively presenting the performance of the event through ROI analysis, it can help the planner build more credibility with the sponsoring organization and help establish a more favorable positioning for the event.
Just as ROI is used as an indicator of business performance across all other industries, it is now important to measure and analyze the ROI of conventions by taking the event's performance into consideration. Since the cost of holding and operating an event is high, analyzing and evaluating the impact of the input costs from a financial point of view will ultimately help to prove the merits and values of holding the event. Now, it is necessary for the event planner not only to plan and operate events, but also to quantify what values and achievements have actually been created through the events, analyze them from a financial point of view, and have the capacity to manage event performance through this information. That way, the event planner be treated as an equal administrator by the management of the organization that is hosting the event. Management is always interested in the actual results created by all the investments that have been made by the organization.