Your organization can hold the best in-person meetings in the history of meetings, but if you are not able to demonstrate their value to the C-Suite, chances are slim that your budget for future in-person meetings will get approved.
Concrete numbers are the best way to show value, and at this point, your mind might immediately go to key performance indicators (KPIs) as the way to showcase these numbers. However, KPIs refer to the outcomes each department at an organization produces from their collective efforts. They are not suitable for demonstrating the value of in-person meetings to members of the C-Suite.
THE C-SUITE WANTS TO SEE ROI – NOT KPIs
KPIs indicate the potential for a strong return on investment (ROI), but they cannot accurately measure the true value of in-person meetings. As such, they do not translate to the ROI that C-Suite members expect to see when reviewing a proposed budget. While key performance indicators and return on investment often get erroneously interchanged, there are key differences between the two.
To put it succinctly:
“KPIs are a forward-looking predictor of end performance, whereas ROI is used as a backward-looking informer of future budget allocation decisions.” (1)
Thinking of KPIs and ROI in terms of a book is a simpler way of looking at it. KPIs describe what happens at the end of each chapter, whereas ROI fills the reader in on what happens at the conclusion of the entire book. (1)
Framing it this way highlights why the C-Suite wants to see ROI, not KPIs, when evaluating the budget for future corporate meetings. ROI is the fulfillment of the promise made by KPIs.
LEVERAGE INDICATORS TO TRACK LONG-TERM ROI
However, KPIs still play an important role in showing ROI to members of the C-Suite. Remember, these indicators are quantifiable, outcome-based statements used by organizations to determine whether they are on track to meet their objectives. Effective KPIs should have the following five elements:
- A measurement to use as a benchmark of success
- A target that aligns with the measurement and set time period
- A clearly defined data source to measure and track results
- Frequent reporting of outcomes – monthly reporting at minimum
- An employee who will own the tracking, reporting and refining of specific KPIs
Source: (2)
The main benefit of KPIs used to help determine ROI is their ability to show measurable progress over time. Namely, they give your team concrete, verifiable outcomes to eventually apply to ROI value. Keep in mind that KPIs alone do not constitute ROI. Rather, they are one of the contributing factors to it.
When it comes to compiling KPIs to illustrate in-person meeting ROI, some are better suited to achieving this objective than others. They include:
- Attendee satisfaction
- Engagement levels among attendees
- Knowledge gained (and retained long-term) by attendees
- Team relationship building and strengthening
Given the crucial role that KPIs play in calculating ROI, you might assume that many companies are leveraging them. Although 70% of respondents said that measuring ROI for meetings and events is relevant for their organization, only 44% said they actively measure ROI for their events. Of the respondents who do measure, 100% focus on measuring attendee satisfaction while less than half (47%) are focused on measuring monetary value. (3)
In short, far too many organizations are leaving money on the table – in the form of allocated budgetary funds for in-person meetings. You can get ahead of the curve by using meeting KPIs to your department’s advantage.
A C-SUITE FRIENDLY EQUATION TO QUANTIFY MEETING ROI
But how do you get from point A to point B? Namely, how do you convert KPIs into ROI and present it in solid numbers? The following equation will help.
meeting return = (direct business and impact) + (organizational learning)
divided by
meeting investment = (time to prepare the meeting) + (time to conduct the meeting) + (meeting room cost and travel expenses)
Source: (4)
The breakdown of this equation is deliberate because it accounts for all the main costs of in-person meetings held offsite instead of just the few that most companies tend to focus on – for example, travel expenses and the cost of reserving the meeting space.
When you figure all costs into the equation, you get a more balanced idea of how the positive outcomes stack up against the costs. A good way to quantify ROI is using the three-to-five-times rule; that is, the benefits of the meeting should be three to five times the invested amount.
THREE LITTLE LETTERS, BIG DIFFERENCE
There are few instances of three little letters making a big difference, but that is indeed the case with KPI and ROI. Some of the differences are subtle, but they are still distinct. And when you leverage KPIs to come up with a realistic ROI, you get demonstrable results that the C-Suite can recognize and reward with a more generous corporate meetings budget.
For more information about planning corporate meetings that will amplify ROI, contact Gavel International to learn about how working with a seasoned meeting planner can help achieve this objective.
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SOURCE(S):
1 https://www.linkedin.com/business/marketing/blog/measurement/the-crucial-difference-between-kpi-and-roi-metrics
2 https://onstrategyhq.com/resources/27-examples-of-key-performance-indicators/
3 https://www.amexglobalbusinesstravel.com/the-atlas/measuring-meeting-roi/
4 https://lars-sudmann.com/boost-your-meeting-roi-with-these-ten-strategies/
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