For almost as long as there have been meetings, the question of what return on their investments companies actually achieved has hung over executives and meeting planners like a stormy sky that threatens rain.
And since the discipline of strategic meetings management began to loom over the meeting industry a decade ago, those questions often have threatened severe thunderstorms, especially over the careers of planners who are under steadily increasing pressure to demonstrate the business success of their events.
To really understand the issue, says Michael Dominguez, chief sales officer at MGM Resorts International in Las Vegas, one must understand its context. In the wake of the recession circa 2008–2010, measuring the success of meetings with metrics such as ROI and ROE helped reinforce the notion that face-to-face meetings are critical to all industries and all companies. “And that’s one of the things we learned with the Meetings Mean Business coalition,” says Dominguez, who has played a key role in that initiative since its inception. “And the message that face-to-face meetings remain critical to business is another reason why success metrics are so important.”
“ROE is more accessible to more people by definition, especially people who are not research specialists. They can be more comfortable with it.”
— Ira Kerns
Michael Massari, senior vice president at Las Vegas-based Caesars Entertainment, and like Dominguez a driving force in the success of Meetings Mean Business, notes that ROI and ROE “are on the radar of almost all our customers now. One of the really nice benefits of a terrible situation like the recession and turndown in the meeting industry a few years ago is that meeting sponsors and planners — and even top executives — have become thoughtful and measured in the way they think about why they have meetings, what they spend, who attends and what the benefits to the company are of those meetings. And that kind of thinking is what ROI and ROE are all about.”
Although ROI and ROE get more attention, as a practical matter, the concept of return on objective (ROO), is actually the easiest to grasp and implement. It also addresses directly the most foundational element of any meeting, particularly in the era of strategic meetings management — the purpose of the meeting.
“For me, ROO is the real starting point in trying to assess the return, in a broader sense, you are getting from your meetings and events,” Dominguez says. “And the reason I say ROO should be the starting point is that it goes directly to the reason the meeting is being held. What’s the goal of the meeting? What is going to be accomplished as a result of the meeting? Why are people attending and what will they get out of it? And it makes sense to use those questions as the foundation for everything else.”
Ira Kerns, founder and managing director of MeetingMetrics in New York City, explains that another aspect of the appeal of ROO to management executives is that it is a concept that has existed in business for decades.
“ROO is a specific sort of metric that many management consultants have been using in business for many years,” Kerns says. “And there is nothing particularly new or different about the way it’s used in the meeting industry. The only thing it has to do is properly follow the disciplines of how you write an objective and measure the result.”
Objectives can be defined and quantified from a number of perspectives, such as educational, conceptual, motivational or behavioral. “And all of those kinds of elements can end up being placed into a specific kind of objective that relates to the meeting,” Kerns explains. “But you have to do some work to properly define an objective. “
In fact, for ROO to be a truly measurable and reliable metric, Kerns says, precise and measurable objectives must be defined and written for every desired outcome of a meeting, well in advance of the event, and then approved by the meeting owner and key stakeholders. Then, meeting content, an agenda and activities are designed to accomplish the specific objectives.”
Unfortunately, Kerns says, only a minority of companies and meeting planners satisfy those requirements. Why so few?
“Because when you’re talking about ROO, you’re talking about a very precise, almost pedagogical way of defining your objectives,” he says. “And unfortunately, that kind of expertise and discipline is not something very many meeting planners realize and understand.”
A related and important reality, he says, is that historically, very few meetings actually had a genuine objective. “It was just a matter of, ‘We’re going to Chicago again this year for our big annual meeting.’” But, he says, in the era of SMM, precise objectives are more mandatory than ever before. And more planners needs to master the skills and disciplines required to meet the increasingly rigorous demands of SMM for a clear and achievable business objective for every meeting.
Although “ROI” is the meeting metric most tossed around by a company’s executives and meeting planners, Kerns notes, it carries with it a basic challenge that immediately presents an obstacle for most companies — and especially its meeting planners.
“In order to have a financial measure, first you have something to measure — and something that can be measured,” he says. “So when it comes to ROI and meetings, usually you don’t have the ability to measure something, like sales, until one or three or six months after an event, because it’s only after the event that people start to perform in order to achieve the financial goals and objectives. Good examples of that would be a sales meeting or a meeting designed to launch a new product. You can’t start measuring ROI until after the meeting is over and people start to sell. That’s when the clock starts running. And in many cases, it might take as long as six months, or even longer, before you have results that are measurable financially.”
And faced with such an obvious reality, in the case of ROI even a smaller minority of companies rightly and accurately measure it. “You’re talking about very few companies,” Kerns says, “even though all of them talk about ROI from their meetings.”
The good news is that any company that aspires to a more scientific and detailed understanding of the bottom line financial returns from its meetings can satisfy that aspiration. The tools and methodology are well-established. The practical issue, Kerns says, is doing it right — and with a real commitment.
“It’s a very demanding process to complete correctly,” he says. “And people in the meeting industry — planners, primarily — are just not trained in the disciplines you have to be good at to do it right.”
In order to do it right, at a minimum, a three- to five-day training workshop from The ROI Institute, with whom Kerns often collaborates on projects, is required. “Then, after you get the training, you have to get everyone to agree — your management and all of your stakeholders — to participate in a real ROI study, Kerns says. “And for most companies, that is not easy to do. Most companies just move on from this month’s meeting to next month’s meeting.”
The expert observations Kerns make raise an obvious question. Why do so many meeting planners talk about ROI, but so few actually do it at even the minimum standard required for credibility and accuracy?
“Number one, ROI is a big buzzword,” Kerns says. “Very few people actually know what they’re talking about, but they say, ‘Oh, we should measure the ROI of our meetings.’ But most of them don’t even understand what ROI analysis actually is or what it requires. And when they do understand it, they realize that doing it right is a very rigorous process that is complex. It demands a commitment and resources. And because of all that, it’s a daunting task even if you do want to do it right. But if you do it right, it’s a science. It works. But there are no shortcuts. There’s no easy or simple way to do it.”
What most companies who profess their commitment to determining the ROI from their meeting are actually doing, Kerns says, is just practicing corporate cheerleading that is ultimately fairly meaningless. “For example, the company will have their big sales meeting and the salespeople will come away saying, ‘Wow, we really hit it out of the park with that meeting,’ ” he says. “And everybody feels good about the meeting. So they think they got a good ROI from the meeting. Well, they can’t say that, because they haven’t actually proven that. It’s just a rah-rah kind of thing. And that’s the typical way that companies and meeting planners think of ROI.”
Dominguez takes a slightly different, and certainly more realistic view. He agrees with Kerns that there is now a genuinely scientific basis for measuring ROI for meetings. But he is not convinced that the findings can be as detailed and granular as Kerns and The ROI Institute suggest. “The financial success of meetings can be quantified,” Dominguez says. “But I don’t think the process is so precise that you could ever say, ‘We spent X dollars on the meeting and we got Y dollars back as a result of it.’ I think a much better methodology, in terms of calculating the ROI, is first defining what the specific objectives of the meeting were and then measuring how well those objectives were met.”
For example, he says, if the objective was to increase sales in the third quarter by 25 percent and sales went up 28 percent, it can be stated clearly that the meeting was a success and that it delivered in terms of genuine ROI.
“And that’s also why I think ROO is actually a more reliable metric than traditional ROI,” he says, partly because ROI is very hard, if not impossible, to calculate.”
Massari agrees with Dominguez that an assessment of meeting ROI, by definition, is more subjective than a mathematical calculation. “To me and the meeting customers I talk to,” he says, “the real issues involved with ROI are questions. What’s the benefit on the backend of the teamwork that was built at the meeting? What’s the benefit of the relationships that were built at the meeting? What is the business value of the education or sales tools that were presented at the meeting? Those are the typical kinds of things most companies look at when they talk about ROI or ROE.”
He does acknowledge that the companies that try to set a higher standard do try to get a more scientific measurement of real bottom-line business impact. But in reality, most companies are much more subjective in their assessments. And not all companies or industries define ROI or ROE the same way.
Of the three R’s of meeting metrics, ROE is much more commonly used than ROI or ROO, Kerns says.
Why? “It’s a much less formal process than ROI or ROO,” he says. “So it’s more accessible to more people by definition, especially people who are not research specialists. For them, ROE is just something they can be more comfortable with.”
The purpose of ROE if it is done properly, Kerns explains, “is to surface and define the needs of your meeting attendees and meeting owners. Then it can be determined how effectively the meeting met those needs. You can determine exactly how successful the meeting was.”
As an example, Kerns says, imagine a meeting that has eight general sessions and 24 breakouts on specific topics. And there are social events, such as receptions and banquets.
“In an ROE study,” Kerns says, “you’d want to ask two or three questions about each one of those components, including questions about each and every general session, breakout or social activity. And the questions should be built around whether or not those specific experiences had the actual impact that the meeting intended them to have. Did people learn X? Did people feel Y about the company or the new product? Did people perceive Z as a direct result of the meeting? By asking those kinds of clear, precise questions, you then can truly understand what your return on the event was. But you have to be specific in defining first what the needs are that will be the focus of the meeting, and then whether those needs were met.”
If done properly, he adds, ROE research can be used to define which things worked and which did not at a particular meeting. Those findings then empower the company to further investigate why certain initiatives failed and what can be done to improve the next meeting.
No veteran meeting planner with more than 10–15 years of experience would deny that the demands by management for demonstrable results from their events has increased exponentially since the end of the recession. And the arena planners must perform in today is much more challenging than it was a decade ago.
“If you go back to 2005 or 2006, you had a whole bunch of meeting planners who just had meetings because they always did,” Massari says. “They were inviting the people they were inviting just because they always had. And the expenses were just based on what was budgeted or what was available. And that was not a healthy business model. I’m much happier today to see a much better understanding of why a meeting is happening, why the people who are going are going, and what exactly will define whether the meeting was a success or not.”
That is a relatively new and sustainable model for a dynamic and robust meeting industry, Massari says. “And even though the total meeting spend may be down from the heyday before the recession, I think that the market overall is now much healthier because there is more scrutiny,” he says. “To me, that means everybody is better off.”
Dominguez concurs with that assessment. And he points out that in the new world of meeting accountability, planners must be informed and at the center of the process from the first moment a meeting is conceived.
“The issue that has become such an important fact in the industry is that for years now, we’ve talked about the fact that to be effective in their roles, meeting planners have to have a seat at the table,” Dominguez says. “They have to play a role in the process from the time the meeting is first being discussed and the objective is being determined. And based on that, what I hear more and more today is that planners are very much involved in the process from the beginning. And that no longer means just producing or planning the meeting. It means helping to define the goal and strategy and then figuring out how their role as the planner plays into creating the meeting. That is a tremendous step forward for the industry. And it also means we’re farther down the road in being able to measure the success of meetings because everything is now so clear to everyone, right from the start. And that has changed and improved how the entire process works.”
In the end, Dominguez says, all companies and all planners will have to be certain that they have gotten a return on their meetings that can be measured and reported.
“You have to have the ROI so you know the meeting made business sense,” he says. “You have to have ROE to know people got the message and knew why they were there and what is expected of them. And you have to have the ROO so you know the business purpose of the meeting was met. In today’s world, you need all three of them, really, to be able to say you truly had a successful meeting.”
For Massari, a central question is one of definition. Is measuring the success of meetings more science than art? Or is it the other way around?
“If I’d been asked five years ago, I’d have predicted that today we’d be seeing a lot more science and less art when it comes to creating and measuring a successful meeting,” he says. “But we’re not. And looking back, with the benefit of hindsight, it makes sense that we’re not. And that’s because the process is so subjective. And because there’s so much assumption involved. So, because of that, for the companies that really do it well, I think that determining ROI, ROE or ROO will always be more about art than science. That’s just the way it is.” C&IT