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Event Planning

Successful events do not happen by accident, nor do they happen overnight.  There is a whole industry to service the organisation of events.  Some companies find the out-sourcing of Event Management to be beneficial, other find that they can manage the event internally with better results and with substantial cost savings (money that can be spent on message reinforcement with Promotional Merchandise).

At EventPromotion we believe that your event will be more successful if you take some time to understand the principles behind Event Management.  Ruth P. Stevens (www.ruthstevens.com ) is a leading educator in this field, she lectures at Columbia University in the USA.  Ruth has kindly allowed us to reproduce sections of her book (‘Trade Show and Event Marketing’), please invest some time in reading these two articles.

5 Key Event Metrics, and How to apply them and 10 Secrets of Success in Business Event Marketing

5 Key Event Metrics, and How to apply them

Business events have an undeserved reputation for being hard to measure.  In fact, business events are no less measurable than any other part of the marketing mix.  All it takes is discipline and prior planning.  Here are 5 key metrics that will allow you to assess the value of your investment in business events, and watch their performance year on year, and in comparison to one another and to other elements of the marketing toolkit. 
1/Cost Per Lead
Cost per lead (CPL) is perhaps the most fundamental unit of trade show and event measurement.  It is generated by dividing total program cost by the number of qualified leads generated.  A few caveats are in order, however:

• Use the fully loaded program investment number as the numerator. 
• Eliminate unqualified contacts from the denominator.
• Add in to the denominator the percentage of contacts that are still in the qualification and nurturing process but are expected to convert to qualified leads—in effect, the pipeline revenue generated from the event. 

The main benefit of tracking cost per lead is the ability to analyze costs on a consistent basis over time, and to compare the value of competing marketing investments.  For example, ranking the annual trade show calendar by cost per lead results can serve as a benchmark for making future event-selection decisions.

2/Cost Per Contact
Another useful number is the cost per contact, which is generated by dividing the entire program investment by the gross number of contacts generated.  Only a percentage of these contacts will convert to sales revenue, of course, but the others can be qualified, nurtured, and otherwise managed in the marketing database. 
Cost per contact becomes an important benchmark for evaluating competing marketing investments.  However, cost per contact can be dangerous if used on its own to evaluate the relative value of the business event.  Better to combine it with a metric that emerges later in the selling process, like cost per qualified lead or ROI.  If left to stand on its own, the cost per contact metric can encourage such questionable trade show marketing practices as fish bowls and contests, where marketers have mistakenly focused on contact quantity instead of quality.
Some exhibitors use cost per visitor reached, meaning the program cost divided by the number of potential prospects who visited your booth.  According the Exhibit Surveys, Inc., the national industry average for cost per visitor attracted is $116 and the cost per visitor reached, based on having had a meaningful face-to-face interaction at the exhibit, is $208.

3/Expense to Revenue Ratio (E:R)
Dividing the total revenue associated with the business event by the total expense incurred is a standard marketing communications metric in business marketing.  The benefit of using E:R is that it makes the relative cost of the marketing communications tactic easy to compare with other tactics of its sort.  The company might impose an maximum E:R threshold—2.5%, or 6%—for example, to establish control of marketing communications expense. 
The reason E:R has come into wide use in business marketing situations is that business-to-business revenues tend to be very high compared to a single marketing tactic, thus making ROI calculations faintly ridiculous.  Furthermore, most business-to-business revenues result from multiple sales and marketing investments, so claiming an ROI on any one “touch” is risky and inaccurate.  E:R makes no such claim. 

4/Activity-Based Metrics
When sales results are too difficult to get, some marketers retreat to a set of metrics that are fully under their control, most of which can be characterized as based on marketing activity, rather than sales results.  These include such indicators as:

• Number of visitors to the booth, year on year.
• Booth visitors by target (penetration of certain accounts, industry breakdown, etc.).
• Number of qualified leads.
• Number of sales appointments confirmed.
• Number of credit applications or RFPs received.
• Lead quality mix (percent of A, B, C, etc.).
• Lead mix by geography, or by product interest.
• Lead mix by day or hour of the show.
• Cost per qualified lead.
• Cost per contact added to the database.
• Cost per demo given, or live presentation viewed.
• Cost per visitor reached (people who passed the booth).
• Cost per current customer met.
• Qualification rate.
• Actual costs versus budget.
• Whether the exhibit arrived and was set up on time. 

Activity-based metrics can be helpful in keeping marketing communications programs on track, year after year.  Keep a record of the categories that interest you, and review the trends annually, trade show by trade show.  Select the categories that are the most powerful indicators of a prospective sale for your company. 
But don’t track too many items—keep it to a maximum of three that you will benchmark.  Some of these, like cost per lead, can also be helpful in comparing trade show activity to other marketing communications options.  What is the cost of a demo at a trade show, versus the cost of giving a demo in the field, for example?
As to the pros and cons of activity-based metrics, some trade show experts believe that it is unreasonable for a business event marketer to be responsible for sales results.  Marketing activity, they say, should be evaluated based on elements within the marketers’ control.  This is a compelling argument, and makes sense when it comes to the performance measures by which, say, an exhibit manager will be evaluated.  However, a marketing manager who is clearly in a sales support role cannot survive for long without a clear connect to sales results.  Marketing management must have the ability to report on a program ROI in order to select among competing investment options and serve the shareholders wisely.

5/Business Event ROI
Ultimately, business event marketers must demonstrate a return on their marketing investments.  This means a financial return, either in sales revenue or cost savings.  The return on the investment is calculated by subtracting the incremental expense from the incremental variable revenue that was driven by the marketing program, then that number is divided by the expense itself.  The result is expressed as a percent.  A zero indicates a program that broke even, and a negative number means a loss on the investment.  If you spend $1 million to generate $1.2 million in new margin, you’ve achieved a 20% ROI.
ROI =  Gross margin – Expense
   Expense  
Why use margin versus revenue: because margin represents the true contribution to overhead that was generated by the incremental marketing activity.  Using gross sales overstates the benefit that the marketing activity generated, and also disguises any unprofitable sales transactions that may have resulted.  Marketers should use the gross margins on the sales, that is, subtracting out the variable cost of goods sold and the direct cost of sales. 
Is the gross margin the number that results from the initial transaction?  No, it should reflect all the incremental margins generated from that investment.  So, if as a result of your trade show marketing activity, you acquire a new account, then all margins accruing from that new account need to be added in.  Margins that will accrue in the future must be discounted back to today’s dollars, to recognize the time value of money.  In other words, the term “gross margin” here represents the lifetime value of the new account to your firm.

Exhibit 1:  Costs and Results Metrics from a Hypothetical Manufacturer’s Trade Show Program

Metrics	Costs & Results
Event costs, fully loaded	$500,000
Qualified leads generated	200
Cost per lead ($500k / 200)	$2,500
Lead-to-sales conversion rate	40%
Leads converting to sales (200 x .40)	80
Average order size (or average incremental revenue)	$100,000
Cost per sale ($2,500 / .40, or $500,000 / 80)	$6,250
Sales revenue (80 x $100k)	$8 million
Gross margin rate	45%
Gross margin on the event revenue ($8 million x .45)	$3.6 million
E:R ($500k / $8 million)	6.25%
ROI ([$3.6 million - $500k]  / $500k)	620%

A simpler approach to ROI metrics is often used in the world of trade shows.  In this approach, the numerator is sales revenue resulting from the trade show, and the denominator is the total trade show expense, meaning all variable costs, including staff T&E, but not staff salaries.  The resulting number is expressed in dollars, and represents the number of gross dollars returned for every incremental dollar invested.  Essentially, this metric expresses E:R upside down.  This approach to ROI is relatively simple to calculate, which is a benefit.  However, it overstates the value of the revenue to the company, and fails to express profitability. 

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10 Secrets of Success in Business Event Marketing

Business marketers spend more than $20 billion annually on trade show marketing, and another $15 billion on proprietary corporate events, like client conferences and road shows.   But most business marketers are unclear about what value they are getting from that investment. 
The best value results from a combination of careful planning, dedication to measurement, and—above all—a strategic focus.  First and foremost, you must consider the fundamental principles that drive successful business event marketing, which boil down to 10 essentials. 

• Business events are a hybrid sales and marketing activity.  They combine elements of selling, of lead generation, of public relations, of research, of brand awareness building, of account penetration, to name a few.  In fact, among marketing activities, business events are about as close to sales as you can get.  You might say they are akin to a sales call combined with an ad and a PR campaign.  If you think of them as simply “sales” or simply “marketing,” you’ll lose some of the leverage available to you. 
• Business events must be an integral part of the marketing mix.  Considered them within the larger context of the entire go-to-market strategy.  When seen as mere tactics, something “we do every year because we always have,” they will quickly devolve from an investment into an expense.  Marketers must consider the entire marketing mix—the annual program—and fit in the business event opportunity where it will drive the best result.  In many cases, a business event is not the right lever to meet the business objective.
• Targeting is everything.  A great business event is only as great as the visitors it attracts, and their value to you as customers and prospects.  At a trade show, a fabulous booth is useless in front of the wrong people.  So, trade show selection deserves your attention and your discipline.  When you plan your participation at a business event, design your activities to attract the real potential buyers and minimize the non-prospects.  Be very clear about whom you want to meet, and what conversations you want to have. 
• Set clear, specific objectives.  Plan—and fund—the metrics by which you will measure your results.  This should go without saying, but business events have been managed with less than due diligence in this area.  As a result, business events as a whole have developed an undeserved reputation for being “difficult to measure.”  They are no more difficult than any other marketing activity.  Events can, and must be, measured,
• Don’t ask a business event to deliver on its weaknesses.  Trade shows, for example, tend to be inefficient venues for generating awareness.  They are an expensive way to build a mailing list.  If those are your objectives, you will find other more compelling options in the business marketing toolkit.  Neither are business events effective opportunities to keep up with Joneses.  If your competitors at a show have fancier booths, a bigger footprint, or splashier sponsorships, you can congratulate yourself.  You are probably driving better business results than they, with your focused, targeted, and measurable business event marketing activities.
• The business event itself is only a few days in the midst of a larger, multi-month program. It’s the tip of the iceberg:   it’s what you see, but it’s only a minor part of business event marketing.  Some companies think that if they pull together a booth and show up at the trade show, they are all set.  Keep in mind that you are conducting an end-to-end marketing campaign, with the business event itself as a part of the overall campaign. 
• Promote your business event.  At a trade show, you cannot simply rely on show management to get you all the possible business opportunities at the show.  Pre-show promotions are perhaps the greatest under-leveraged opportunity in trade show marketing today.  This is where the right targets are identified, and attracted to meet with you face to face.  For corporate events, promotions are required to drive attendance in the first place. 
• Capture and follow up on your business event contacts.  Post-event is where the real revenue-driving business is done.  At a trade show, go for the quality, versus the quantity of contacts.  Lead capture and management is a process; it simply requires attention and diligence.  If you don’t have a lead management process in place at your company, stop now.  Go build one before you invest another dollar in business event marketing.
• It’s all about people.  If business events are an efficient face-to-face medium, then the leverage to be gained is in the people involved on both sides of the interaction.  Success is about targeting the right audience and persuading them—and only them—to interact with you at the business event.  It’s equally about selecting, training, and motivating a strong staff to interact with them. 
• The business event serves business goals.  Don’t neglect the forest for the trees.  Managing events is an extremely complicated activity, what with the glamorous exhibit and the fun hospitality on the one hand, and the rigors of the logistics and the myriad details on the other.  But these activities are simply the trees—they are a means to an end.  The forest lies in the business result and the planning that drives it.  If you are paying attention to the trees alone, you miss the true power event marketing.