ROI of Events
Today Kevin invited Rob Captijn to the eventplanner.TV studio to talk about return on investment. By proving here the ROI of events we could convince more businesses to invest in event marketing. How come event agencies have no tradition in demonstrating ROI? And more important what's the next step for the event industry?
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Today I invited Rob Captijn to our eventplanner.TV studio to talk about return on investment by proving here the ROI of events we could convince more businesses to invest in event marketing. How come event agencies have no tradition in demonstrating ROI? And more important what's the next step for the event industry?
Hi Rob! Welcome to our studio.
Thanks for having me again.
We are going to talk about ROI. But there's a lot of confusion in the market. What is that exactly, ROI?
Well... Usually when you launch the term ROI people start to doodle on there paper and look the other way. It is really simple ROI stands for Return Only Investments. So, when you have invested in events... what do you plan to get out of it? And that's important, that's very important even in the state our economy is in right now. Because when you cannot explain to your budget owner or your CFO what your event is going to deliver, why should he sign for investment? It consists of two parts. Measuring the results of the event...
Yeah, I can imagine. Isn't it hard to measure?
Well, it's not so hard to measure the effects of events, but before you can measure anything you need to create it. And that's far more important and that should be your focus when planning events to make sure you create the right values that add up to result at the end. But I like to compare events to, let's say supermarkets. Everybody knows how supermarkets operate. They place their right brand of peanut butter on the right height and they have the right music and right lighting. They know exactly how to pull you trough the isles towards the check out with the cart, to pull a little higher to expect it from. That’s what super market is.
That always happens.
An event is exactly is the same. You have all your senses, all the senses of the audience are available to be influenced. So how are you going to create that supermarket that pulls people from the goals you have set to the check out where they do what you want them to do?
But then again in a supermarket, it's rather easy because you can count the value on the tickets, ok, this is my result. But on events you don't sell things or mostly…
Well, let me give you one simple example. In Western Europe you have a company that builds and sells central heating systems, called 'Vaillant'. And they ask us well you know winter is coming we want to sell lot of these heating systems but we depend on the people that install these systems. You know when your central heating system breaks down it’s always three in the morning in the middle of a freezing night somewhere in November and December. And you call your installation company and you say: "My central heating has gone come now". So they come and they bring the heating system that they prefer right? Some of the client doesn’t have too much influence on what is installed in his homes. So it’s crucial for companies like that to be good friends with all these installation people. So we thought what are we going to do? What is the audience like? Well obviously food and drink and nice entertainment and stuff. But when we really focus on what is the crucial factor and this is important, what is the crucial factor that will change their behavior the next morning, we found out that these people like to stick their arms up to here with these new products to see, whether it’s easy to install, whether everything is on the right place etc. So besides food and drink and fun, we created the gallery with lot of these new products with a good experiment. And at the end we had a little desk saying, “If you leave your business card we will give one of these products for free. So you can test that in a real situation.” What happened was, and obviously it was a good product these people were so enthusiastic about the product that they didn’t give one of their card to get it for free, they ordered 200, 400, 600. That evening we sold over 9000 of these machines. The bottom-line of this story: traditional event planners focus on entertainment, it should be fun, people should have a great night and etc. But when you focus on the aspects that really are crucial to change the behavior of the people, in this case creating the circumstances with a good experiment and become enthusiastic, that’s the difference between paying a lot of money for an event, which may be the best event you have ever had. But people at the end: thank you. But if you focus on these aspects, little psychology as well you suddenly create a check out.
But isn't that what story telling is all about?
Well, we live in a time where a lot of, as the expression goes in Holland “old wine goes into new bottles”, a lot of things have, I’m 52 now but lot of things I used to have, I used to do for 20-25 years are now reinvented with a different name. And brand and brand values and brand story was always very crucial to base your concept, your creativity upon when creating events right? So now that’s called story telling. We call it a story. And then people start to invent great stories about the company etc. But for me, from my perspective it’s nothing else than brand values sold to the public. So in my company we don’t call it storytelling, we call it story selling.
That’s even a better term I think.
Telling a story is great. Camp fire, guitars and stuff, but story selling is again creating that supermarket with a check out and getting your results at the end. And I think that will be crucial for our industry for to come here. Then we can say instead of saying to our budget owner: “wasn’t it a great event? Everybody had fun, you know. Somewhere out there it will result into something.” That’s something you can bring to your budget owner. Or you can say to your budget owner “Hey, I sold 9000 of these hating systems. There you go.”
Do it again.
Ya. Do it again!
If you look at other industries, like for example the advertising industry,, why is it a tradition? It’s always in the campaign, it’s always measured. If you look at our industry, the event industry well we are just starting to talk about what it feels like?
Well, I wrote my first book in 1989 about the subject and the basics of ROI measuring they were written down by Jack Philips in 1959. So somewhere in the line I read this book catching dust and everybody has read that book except for the event industry.
And now we have discovered it.
And now we have Elling Hamso, the European ROIs he’s preaching that story with lit of effects but that’s about setting goals, SMART goals and measuring, measuring the effects. What I am talking about, it’s the part in the middle where you create these effects. I am working on my work called PlaySmith. Lining up, you get it at McDonalds and it’s almost done and there on the placement I explained value creation in 12 easy steps. Follow these steps and you have a…
Can you give few examples of steps? What you think are important?
Well first of all, you said you have to set SMART goals. Nowadays it’s even SMARTER goals. Maybe when you Google on SMART goals you get the whole of it. The difference between SMART goals and SMARTER goals in the smarter goals there are two evaluations. So in the SMARTER goals the E is Evaluate and R is Revaluate sometime later. That’s where it all starts. Then you have to define what kind of result do I want? And in that Philips method, for us to think about what have they leant? How did the event change their behavior? What was the impact on my business? What was the result? And in the end you can calculate your ROI, right? So these are four steps that give you indication in what direction you need to seek and find your results. Then something interesting happens. When you influence people your mind is at work. And in a lot of cases also in that supermarket case I described you cannot help how your mind if functioning. So in everything you consider to buy, your mind has to be satisfied in a couple of steps. And when you buy a car, it’s very obvious, you know you orientated fairly well, maybe you drive, you talk to the etc. But when you make a reasonably impulsive buy of a packet of chewing gum at the check out the supermarket your brain is doing the exactly the same. So how can you use that to create a supermarket and to know exactly what the priority when you try to convince people to change their behavior what the priority is. Are their minds screaming for more information? Are their minds screaming for specific propositions? Is their mind screaming for comparing competitive products etc.? Well, I’m not going to cram a book and afternoon of… in this short interview, but I promise you, when it’s finished you will be the first to have it then may be…
May be one last question. What would the next step for our industry be?
An extreme focus on value creations. For instance, when you look at how the industry has promoted itself over the years, in the beginning it was all about organizing and how difficult it was for a company to organize itself etc. And the second phase was we are event marketers, we are experienced economy specialist… but the common nominator between all these qualifications is that we have always talked about instruments marketing is an instrument, organization is an instrument, it’s a tool, and it’s a skill. We have never talked about selling more, having people understanding our brain better and creating better and more profitable relationships, that’s the difference between communicating tools and communicating results and now when we have all the elements together, to maybe be the most effective social medium there is the only one that covers web, but also comes ashore in a physical world right? It is an event. And everything we need to satisfy the wildest dreams of the budget holders, CFOs, sales managers, everybody who is a potential target group for an event, every tool that we need to satisfy is there. So let’s please focus on creating value for them and using these tools to create events that really astonish the people who sign the investments for these events. When we came back to Vaillant with 9000, it’s a sack of a problem. We can’t deliver them. So as a final word, when you use these instruments right you can say to your potential clients as I do often: “Be careful what you wish for.”
Thank you very much for coming to our studio Rob. And to you at home, thank you for watching our show and I hope to see you next time.