We need real-time ROI data for our event planning, execution, and follow up.Converted pipelines are used by many organizations to measure event ROI. However, this is mostly a post-event activity. Moreover, many B2B organizations have a sales cycle of 6 months or more, pipeline conversion won't be available right away. In the end, events ROI are not clear many months after the event. For event marketers who would like to stand tall in front of their stakeholders, this is not enough.
Not easy to calculate returns for existing customers or leads already exist in their databaseThey are not as clear cut as new leads acquired from events.
The basics of event ROI are easy to understand.The following are typical metrics:
- # of registrations
- # of attendees
- # of new leads created
- # of leads showed up
- # of sales meetings scheduled
- # of sales meetings occurred
- # of opportunities created (attributed to the event)
- # of opportunities closed/won (attributed to the event)
A more sophisticated approach comes down to attribution modelsBizible has a good article on general marketing attribution models here. You can pick and choose any attribution model for your organization. All of them have pros and cons. For simplicity, let us take the full path model as an example. It recognizes 4 major milestones in the sales cycle:
- First touch
- Lead creation
- Opportunity creation
- Opportunity closed/won
Typical Sales PipelineThe attribution is based on that the deal is closed and won, but we know many opportunities at an early stage won't be closed eventually. Typical sales pipeline has the following stages and their projected probability of closing.
- Prospecting: 10%
- Qualification: 25%
- Proposal: 50%
- Demo: 65%
- Negotiation: 80%
- Close the deal: 100%
- Lost or dead lead: 0%
Let us say, Kathy is a contact in our database already with an opportunity. she met our AE, Jake during our sponsored tradeshow. After the meeting, Jake was able to close the deal, which worths $10,000. our tradeshow will be attributed $10, 000 * 100% (probability) * 22.5% (attribution rate) = $2250.
ROI in real-timeFor deals getting closed, this approach takes care of event ROI calculation in actual. What about projected ROI during earlier stages of events? A reasonable approach is to estimate the probability of the lead will be moved to the next milestone shortly after the event, and attribute the milestone to the event. If a lead is not moved to the next milestone, the attribution rate will be lower or can be ignored for projection purpose.
Projected # of attendeesLet us start with a list of target leads (can be obtained from a provider for attending a tradeshow or a list of leads to be invited for a hosted event). And we need:
- Projected % of leads who will register - R
- Projected % of leads who will attend - A
- Projected # of additional leads will attend
Projected new lead ROISome of these attendees will be new. For new leads, we are to estimate if they will be qualified and created as a new lead, the event will be attributed as the activity that creates the new lead.
- Projected % of new attendees who will be qualified and created in our database after the event - LCP.
- Projected probability of the deal will be closed - PN.
- Projected $ revenue if a deal is closed - Rev.
Projected existing lead ROI (without opportunity yet)For existing leads without an opportunity associated with them, we are to estimate if a new opportunity will be created with attribution to this event.
- Projected % of attendees, who a new opportunity will be created afterwards for. LOP
- Projected probability of the deal will be closed - PE.
- Projected $ revenue if a deal is closed - Rev.
Projected existing opportunity ROIFor existing leads with opportunities already,
- Projected % of opportunity will be closed. LCW
Overall ROIOverall ROI = SUM of projected ROI for all leads.
Your organization might have a different process, this approach should work for you with minor adjustments.
How do we get these projected number?This is where machine learning can help us. We can learn those parameters by examing the past history of events. It can be learned in a few dimensions:
- Contact title
- Company size
- Company industry
- Number of decision-makers
- Solutions already in use
- Lead owner
What about customers/renewal?renewal can be modeled as an opportunity as well, w/o existing leads.
What about ABM?In that case, we have multiple influencers for an opportunity, we can attribute partial influence to individual leads as well.
What about the aurora effect of events?Events may have the auora effect of bringing more web traffic, more social engagements. We can measure those too with the same idea of attribution model.
How do we update the ROI as more deals are progressing for real?It is simple as taking them out of projection and swap in the real numbers.
Where to go from here?With event ROI model available, we can start to perform comparison analysis and what-if analysis:
- What type of events is most effective for what audience (higher ROI)?
- For a given rep, what is the impact of events? (good for convincing our sales rep to follow up) etc.
This model sounds very technical. Need to wrap your head around them? Don't worry. Hanana can take care of them for you. Simply connect your salesforce/Marketo instances with Hanana, we will run these numbers for you!
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