I want to introduce to you a case history. In truth, it is a dramatization about the search for how to calculate ROI for a upcoming national meeting. When you read it – see if any of it feels ‘familiar’.
A CASE HISTORY
My company was about to introduce a new product and, since I am the head of corporate training, I was tasked with planning our national sales training event. It wasn’t my first time planning a corporate event, but it was my first company-wide national event. After 2 months of back and forth with a Florida based meeting planner, I had completed an extensive checklist and had developed a broad outline of the event. That’s when our CEO’s secretary called and asked me to meet with the boss and bring all my notes along.
A GOOD QUESTION
Our CEO is an informal but intense personality who always gets right to the point. “So what’s this shindig going to cost me?” he asked without looking up as I entered his impressive office suite.
I was a little startled and began fumbling with my notes before I could even sit down. “I’ve only got a preliminary number at this point, but we think the entire event will cost about $350,000.”
“That’s a lot of dough,” he said while looking through his desk drawer for something he had apparently lost. “What do I get for the money?”
I wasn’t sure what he meant. What did he think he was supposed to get? “I’m not sure what you mean,” I answered.
“You’re asking me to spend $350,000 so I want to know what I get for it,” he said, now looking me straight in the eye.
A BAD ANSWER
“Well, that number includes transportation, hotel accommodations, three major banquets, A-list entertainment, high tech AV, the keynote speaker, and two additional guest speakers. There are a few details about shoulder days and other perks that I haven’t completed working out.” I stopped. An awkward silence settled over the room.
Then he said, “You’ve just described the shindig you’re planning and it sounds wonderful, but you haven’t answered my question. What is my return on this investment? Why would I spend $350,000 to throw a party for the sales force? What do I get? Why not just print up some classy training manuals and hand them out and be done with it?”
THE LIGHT BEGINS TO DAWN
“You see, no budget amount is too big or too small; right or wrong. The number only has meaning when I can figure out what my return on the investment will be. Then the number has meaning. For example, what would it cost me to bring every salesman in here to the corporate headquarters and train him in our new product? How would we inspire him to go back to his region and sell with enthusiasm? What about the cost of the downtime while he’s here rather than out selling the product? I need to know all these numbers in order to evaluate whether your $350,000 budget makes any sense. It might be cheap for all I know. You might be a genius, and this sales meeting might be the best investment I ever made, but you need to tell me that.”
A BETTER WAY TO PLAN AN EVENT
When I left his office I realized I had just been treated to an abbreviated MBA course. When planning a corporate sales training or incentive meeting you will be amazed at how rational the process becomes if you begin by monetizing the expected returns your company will realize. Working with my staff and my outside meeting planner I identified the following returns and had the accountants in our finance department monetize them:
- Incremental sales increases generated by a motivated and enthusiastic sales staff.
- Attendee’s time saved avoiding a week of tedious training at the corporate headquarters in one-on-one training sessions.
- The expense saved by maintaining only a limited training staff at headquarters.
- The collective intelligence generated by bringing the entire sales department together under one roof.
- The impact of our corporate culture on the self-confidence of isolated sales reps.
- The power of the renowned keynote speaker’s endorsement.
- The opportunity value of the CEO being able to address his entire company in one place.
- The “reward” component of the activities surrounding the training sessions.
As a case study – this is a fictional piece… or is it? Can you relate to the list above? How would knowing “the numbers” like in the example above help you when planning your next meeting?
The monetization formulas for each benefit will differ from company to company, but it is imperative that you work up a rational number for each return. It’s one of the things we do best at Premier, work with each client to come up with a personalized, monetized benefit list.
Avoid being lazy and backing into the number after you already know your event budget. Complete this ROI exercise before planning your event. Your budgets will no longer seem outrageous or wasteful, and you will save a lot of time having to defend each expenditure.