October 11, 2019 2

The Only ROI Prediction Metric that Matters: Opportunity in the Room | Run of Show

The Only ROI Prediction Metric that Matters: Opportunity in the Room | Run of Show

Today, we’re going to talk about the one most valuable stat that you should be tracking to drive ROI for your events. So, after years of throwing events there
is one data point that I’ve fallen in love with. There’s a lot of data in events, don’t get me wrong you can pull out so many different insights, but there’s one
data point that I actually find really moves the needle on an event especially
if the goal of the event is sales. Actually, I learned this lesson the
hard way. I through a series of events a couple of years back in which everyone
thought they were really good events, but at the end of the day, they just didn’t drive revenue. At the end of the day there was no return on the investment of
the event and so, what I started instituting was consistently looking at
one single number and shouting it from the mountaintops. I call this number
OITR, Opportunity In The Room. And I find that this number is simple,
understandable, clear and helps get people really behind your event. So, what we’re gonna do today is, we’re gonna talk about three things. We’re gonna talk about how to calculate opportunity in the room. We’re gonna talk about how to project against
opportunity in the room and really build your budget for it. And we’re gonna talk about
how to use that number to set goals and get your team really incentivized around
this number. So let’s dive in, the thing about opportunity in the room is to
think about every event really as an opportunity. Maybe more specifically, to
think about all the people at the event as opportunities. How much could this
attendee eventually buy from us? Now, typically we’re tracking this
information in Salesforce and let’s say that somebody comes in as a $40,000
account and, this person is a $30,000 account, this person is a $20,000 account
and, this person is a $10,000 account. Each of these will be quantified as
opportunities, right? But, more importantly each of these are humans,
right? These are people that are actually attending our event and have real life
needs, desires and martinis in their hands. And so, by taking a step back and
thinking about each of these people as numbers it helps us really quantify what
this event could eventually achieve. Now, so then the next step is to take all
these numbers and tally them up. 40, plus 30, plus 20, plus 10, is $100,000. And now,
this right here, this is the raw opportunity in the room, right? The raw
opportunity number we’re gonna use that later to actually get our team really
excited about this event. But in the meantime as pragmatists, as event
planners we need to think about the actual potential of this event and the
projected potential of this event. Now, there’s a couple ways to do this. The
more sophisticated way is to basically assign a percentage that this
opportunity will close eventually. So, let’s say that this person is at a 50%
opportunity to close, this person is at a 75% opportunity to close, this person is
really early so, it’ll be at a 10% opportunity to close, and this person’s right on the edge so we’re about to close 10k and it’s like 90%. That’s one way
to accomplish this and you would add all these numbers up and assign the
percentages. Just for simplicity while we talk this through, let’s just use kind of a general opportunity to close ratio of like 15%, okay? So, the way to do this
is you basically apply 15% to $100,000 and you come up with the adjusted
opportunity in the room and that’s just going to be $15,000. Now, let’s talk about
how we’re gonna use that $15,000 and we’ll come back to the $100,000 number.
The way that I use that $15,000 is to, build my budget and be realistic about
what the eventual ROI is going to be. So, I try to work backwards. I take that
$100,000 like we just did then, I basically adjust it, as you know we got
to about $15,000. Okay, then I basically set an ROI target. For most of my events
I try to make my ROI target two to one, that means for every dollar and you know,
dollar in terms of people time and actual dollars out time, I try to get
about a two to one ratio. So, two dollars in for every dollar out. What that’s gonna tell me is pretty simple, it’s gonna tell me that the budget that I’m allowed to spend here is about $7,500 on my event. I could probably throw a pretty good event for that, right? I don’t know it’s
got a- actually, now that I think about it, I really want to increase that budget and there’s really only one way to do that. If I can increase this to let’s call it
$400,000 in the room and then I keep that same adjustment, I keep that same
ROI, I get to times this now by four and $7,500 times four, anyone? Anyone?! Ahh, come on, it’s $30,000 we’re good. So, if you want to increase your budget it’s pretty simple. Show that you can get more
opportunity in the room and that you can maintain the same ROI ratio and then,
it’s a pretty logical argument that you should be spending more money on the
event. Now, that’s how to build your budget off of the adjusted opportunity
in the room, but now let’s talk about how to use the opportunity in the room to
get your team really excited. Now, the best way to do this is, to put that number in a place that everybody can see. I actually put up dashboards in the
office with the opportunity in the room leading up into the event. We send emails
like, weekly with the opportunity in the room and how it’s building. We’ll even have kind of leaderboards of who’s driving the most opportunity in the room. I’ll
even set a cash compensation or even like, you can attend this event
if you drive “x” amount of opportunity in the room. But, the bottom line is this, is that putting a real number gets people to understand that, hey this is a fun event that we’re gonna have martinis and it’s gonna be really sweet, but you’ve gotta do your job at this event. This event is an opportunity for you to actually go make some money. And, putting that number up and making kind of labeling this event as a dollar figure really changes the way people think about that event. So, that’s how I think about opportunity in the room. I use it
to project an actual number and build my budget off of it and I use it to really
incentivize and get my team excited about attending and using the event as a selling opportunity. And really, as I’ve followed and tracked and looked at this number it’s made one thing very very clear to me. Look, you know you only have
so many attendees that can exist in an event. You might have a small event, you
might have a big event, you might have a huge event, but no matter what, you really
can’t change the number of attendees that you have. But, what you can change is how valuable each attendee is. And so, focusing on opportunity in the room has
really evolved my thinking around how I segment, how I target and how I use each
of those invitations to drive the most amount of opportunity for the square
footage that I have in that venue. Okay, that’s it! I would love to hear if you’ve
used opportunity in the room to drive through our actions or better events, if you could send me comments or ideas about this particular style I would love it. And make sure to tune in for our next Run of Show. Thanks
for tuning in. Craving more event content? If so,
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