The onset of the coronavirus lockdown was a turning point for many companies. While many would have hosted the occasional virtual events before this time, the lockdowns forced business to turn to virtual events to stay connected with clients and provide a pathway for communicating key business updates.
As companies consider the future balance between in-person and virtual events, many will be looking for a clearer understanding of the benefit-cost ratio of such technologies. This will be driven in part not just by reduced marketing budgets. It will also be an exercise of re-examining if the way marketing was done before is still the best way to approach the market.
Virtual events are not free
To consider the Return on Investment (ROI), or the benefit-cost ratio, all costs need to be quantified and considered.
A virtual conference will likely not cost as much as a physical event, because no venue and catering costs are incurred. However, the technology platform and multimedia support needed for a professional production will still carry a price tag.
There is also a cost for the time commitment that is required, be it from sales or marketing managers who prepare and promote the virtual event, to senior management who present during the event.
Setting the objectives
To calculate ROI, not just the costs, but also the benefits must be quantified. This starts with setting some specific objectives.
Most marketing activity will in some way ultimately aim to build the brand, generate sales or retain clients. Being clear on why you are hosting the event, what you want to achieve, is the essential starting point for any event to be a success. And to measure and demonstrate that success.
But there are many interim results that can be measured along the way. Those results or benefits can all be a valid objective in their own right, and they all contribute to the ROI.
KPI – Key Performance Indicator
KPIs will always remain a valid measure of success. Even when a clear ROI is calculated, the KPIs can provide a target to ultimately improve the ROI. In other words, since ROI is a benefit-cost ratio, reducing aspects of the cost or increasing the number of participants for an event or improving new leads will all contribute to an improved ROI. The improved ROI just shows that you are doing more with less, being more effective in your marketing efforts.
So what KPIs should you be working towards? There is no hard and fast rule on this. KPIs should be linked to your objectives. They are an indication if you are on the right track to achieve your goals. Some KPIs to consider include email open rates, click throughs, visits to your website or a specific landing page, event registrations or tickets allocated, meetings scheduled, reduction on abandoned sales or surveys, or leads passed on to the sales team for follow-up.
ROI – Return on Investment
ROI is ultimately a simple calculation. The return or benefit, divided by the investment or cost. What is more tricky is quantifying all the returns and all the investments.
Returns are ultimately reduced down to sales. But as your virtual event is likely not your only activity or only touch point with the client, some decisions are needed what level of contribution is ascribed to your specific activity.
For instance, when measuring the impact of your current event, how much value are you going to ascribe to the advertising campaign that is running at the same time, or that outbound email campaign and other recent events. If the sale is to an existing client, how much credit should be given to the event, versus the ongoing client relationship and recent meetings? And should the credit be given to the marketing activity you are measuring, or the sales initiatives that are undoubtedly running alongside? A good marketing attribution model will help define and answer some of these questions.
Once you have your ROI calculated for the first time, you have your base case. What’s next? Start improving. This is where you return to the KPIs and figure out what you can do to get a better result next time. It will all work its way through to the ROI.
Each time you are able to demonstrate an improved outcome, you will be contributing to the success of your company. So the work that is required to set up your initial ROI calculation will be well worth the returns to your business.