The Danger of Data-Deprived Decisions for Event Marketing
Picture this. It’s the late 90s. A friend comes up to a wealthy businessman, John, at a summer barbeque, smiling broadly. He has started a new business. It’s a search engine that helps people to find what they need on the Internet. He’s just registered a crazy name for it, Google, tells John it’s going to make a lot of money and asks if he’ll invest $100,000 in it.
The friend doesn’t tell John how he plans to spend the money, how this Google thing is going to generate a profit or how much money John could potentially make. John apologetically tells his friend that he cannot offer his support, not knowing he’s missing out on a money-making opportunity.
While this story of loss is fictional, it illustrates data-deprived decision-making which is what is happening to many B2B events today. Marketing and sales leaders know events are essential to grow sales successfully, but sometimes they go underfunded because it’s difficult to forecast returns, costs and expected ROI.
Play the Numbers for Marketing Tactics You Can Leverage
By calculating your event ROI, you’re able to play “what if?” with alternative marketing scenarios and examine how adding new tactics into your event-marketing mix can increase your return.
Here’s how you can do ROI projections.
Calculate the Costs
- The Ballpark Estimate
The first step in calculating the predicted ROI is to project the costs. If it’s early in the game and you don’t know the specifics, you can generate a ballpark estimate. Typically, the ideal tradeshow expenditure is three times the cost of the exhibit space. So, if your space costs $10,000, you can approximate the total expense, including travel, booth-creation and setup, staffing, utilities and other incidentals will be around $30,000.
- The Itemized Cost Sheet
However, you’ll probably feel more comfortable with an itemized budget. In this case you enumerate each of the following costs:
- Booth creation, storage and packing
- Labor for booth setup
- Promotion and marketing materials
- Show services
- Ancillary events
- Booth staff
- Predicting the Payback
- Ramping Up Your Return
- Increase event attendance
- Set appointments at the event
- Follow up promptly and personally on show leads
- Nurture leads until they’re ready to buy
How can you get a handle on the return on your investment? You’ll need to forecast the number of booth visitors, leads, and sales. Multiply the closed deals by the average sales value for total revenues. Then calculate the ROI as follows:
(Total Revenues – Total Event Costs)/Total Event Costs = ROI
Now that you have the costs and revenue of your current event plan, you can play around with alternative marketing scenarios to see if you can generate increased returns. If so, request the funding to support more ambitious goals or reallocate your budget from other areas with a lower payoff.
For example, a highly successful but sadly underused tactic is telemarketing. You can use it to:
Our calculations on event return on investment show that telemarketing can increase returns by a phenomenal 857%. Don’t go bare bones when a little extra investment in event marketing can mean big bucks. Get our eBook: “The Complete Guide to Calculating and Maximizing Event ROI.” Discover how to calculate event ROI and evaluate the profitability of leveraging additional event-marketing tactics.