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April 6, 2008

How and Why to Measure ROI

Finally, a book on the measurement of meetings and events. ROI (return on investment) has been the hype for several years, yet there has not been a proper textbook on the subject until now. Or maybe that is not entirely correct, there have been a number of textbooks, but they have all been written for the training industry, not meetings and events.

The book is a joint publication by the ROI Institute and Meeting Professionals International (MPI) and it is written by Jack Phillips and two MPI Platinum speakers on the subject, Monica Myhill and James McDonough. Phillips is the highly acclaimed world authority on the subject and father of the Phillips Methodology of ROI measurement.



A level-headed approach to measureing ROI

It is a very good textbook, and what makes it so good is the combination of case studies and theory. Many of the cases are detailed right down to the actual survey questions used, and, setting apart from all the other textbooks on the subject, nearly all the cases deal with meetings and events, not training or organisational development programmes.

How often do you measure?

The book is about measuring financial ROI, but the authors are very clear that this is not something you would be expected to do for every meeting, in fact they propose that only something like 5% of meetings warrant a full financial ROI measurement.

Why so few? A proper, credible ROI measurement is a substantial piece of research using scientific research methodology, it could cost 2 – 5% of the entire meeting budget, on top of this the results will not be available until several months later. Furthermore, the authors claim that it is not necessary to do a full ROI study for every meeting, you simply don’t need it. ROI is always a ‘nice to know’ but unless there is an imminent decision – perhaps to stop doing the meeting, or maybe make it larger or more frequent – that is dependant on its profitability, you don’t really need to know.

However, that’s not the whole story, every meeting should be measured for the sake of improving meeting quality and verifying that the meeting reaches its stated objectives. The ROI methodology described in the book is a stepwise process allowing you to measure the meeting against specific objectives at five different levels.

Level-headed approach

At the first level, you measure satisfaction and perceived value. Was it a good meeting, was the venue good, were the speakers good, was the meeting relevant to the jobs of the attendees, do they intend to use what they learned, etc.

At the next level, you measure learning. Every meeting or event has a learning objective. You want the participants to leave with a new skill, new knowledge or new attitudes. Learning is often measured before and after the meeting, maybe even weeks or months after.

But learning is of little value if you don’t use what you have learned. At the third level you measure application. How did the participants use what they learned?

Doing something different only has value if it supports the objectives of the stakeholders. At the fourth level you therefore measure impact. The results created by participants doing something after the meeting. When the impact is converted into money and measured against costs, the fifth level, you have ROI.

These five stages of measurement are the essence of the methodology described in the book, and all meetings should be measured against objectives up to some level, normally at least level 2, learning.

Feedback can be deceptive

What is typical for the meetings industry today is to measure only participant satisfaction, which is only part of a level 1 measurement. And because you improve what you measure, many meeting planners place too much emphasis on participants just having a good time. The authors call this the deceptive feedback cycle. There is nothing wrong with participants having a good time, but this is very rarely the main purpose of the meeting, the purpose is usually for participants to learn something and then to apply what they learned through a change in behaviour.

This is definitely a book that every professional meeting planner should read. Practicing the evaluation methodology described and illustrated so well by the case examples, will definitely make meetings better. And if you need to know the financial ROI, it will tell you how to do that as well.

The book is available from Meeting Professionals International and you can also buy a copy from European Event ROI Institute

Elling Hamso is a meeting management consultant and managing partner of the European Event ROI Institue.


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