Continuing with our series on how to maximize value and effectiveness at industry conferences, we have built an ROI calculator to allow you to calculate your return on attending professional events.
While industry conferences, summits, trade shows, and receptions can be a productive source of new relationships and opportunities, they can also be quite costly. Between hard costs (like registration fees and travel) and soft costs (like preparation time) it’s hard to justify the expenditure without understanding the real value generated.
We first explored the idea of valuing industry conferences in a recent article on event ROI. Today we have distilled those principles into a free, downloadable excel template that allows you to calculate the ROI on the time and money you spend attending events.
With just a dozen inputs, this downloadable template can make the case for — or against — attending that next event.
Step 1: Estimating the Cost
In step one of the calculator you will find inputs for the hard and soft costs of attending a conference. Determining hard costs is easy. Simply account for the registration fees, travel, rooming, and entertaining costs for each employee attending the conference, as well as any applicable sponsorship fees. There are line items for each of these expenses in the calculator.
When determining soft costs, first track the number of hours spent preparing, attending, and following up for the event. This number will vary greatly with the scope of the event. However think about the time spent emailing, scheduling, and preparing for the event, traveling to and from the venue, in dinner and lunch meetings, and the like, and refer to records of time spent preparing for and attending historical events.
Next, calculate the cost of your employee’s time per hour. In the calculator, we use the following assumptions to determine the cost of each hour of a team member’s time: an average salary of $100k, 49 working weeks in a year (52 weeks per year with 3 weeks of vacation), 5 days per week, and 8 hours per day.
Attendee cost per hour = $100,000 annual salary / (49 working weeks per year x 5 days per working week x 8 hours per day) = $51 per hour, per Attendee
By inputting the hours spent and the cost per hour of your employees’ time, the ROI calculator can determine your soft cost. When combined with hard costs, you arrive at a more accurate representation of the true cost of attendance.
Step 2: Estimating the Return
To estimate your total return, you need to define your metric of success. This metric may vary depending on your goals for the conference, your function within the private markets community, and the type of event. For example, a success metric for a deal professional might be a signed NDA, an executed LOI, an acquired company, an exited investment, a closed round of fundraising, or otherwise. Sit down with your team to determine these metrics.
In step 2 of the calculator, we have laid out four potential ways to approximate your generated value — distinguishing between how an investment banker, service provider, company, and financial sponsor (whether private equity, mezzanine, family office, commercial lender, or otherwise) might solve this puzzle.
This list and methodology is by no means exhaustive, but it’s a way to put order and numbers against interpersonal interactions. Keep in mind that your primary goal is to get to a number that accurately reflects the value of attendance. For that reason, this is both an art and a science.
Step 3: Computing your Answer
To calculate ROI, the return of an activity is divided by its cost. This calculation is done automatically in step 3 of the calculator by the following equation:
ROI = (Gain from Investment – Cost of Investment) / (Cost of Investment)
In a world where time seems increasingly scarce, determining the ROI for any event becomes even more important. Use this calculator to establish the true benefit of previously attended conferences and inform the value of future conferences. Deciding whether an event is the best use of your employee’s time is no longer a guessing game, but a decision based on data.