f you can’t measure it, you can’t manage it.” So wrote “Balanced Scorecard” developers Robert Kaplan and David Norton back in 1996. Today, that same mantra applies to marketers in every practice area, including event marketers — who are by no means immune to the drive toward quantitative planning and evaluation. Increasingly, like all marketers, event marketers are held accountable for the financial ramifications of their decisions.

While marketing may once have been regarded as more art than science, successful event marketers now must understand their markets and objectives in well defined, quantifiable terms. That means being able to crunch program numbers — and to understand just what you’re crunching — is vital. Knowing which numbers to crunch, though, takes time.

We often are asked to distill the list of 50-plus metrics we identify in our book “Marketing Metrics” down to the five most important. And typically, we resist that call. But for event marketing, there is a clear starting point for someone beginning to build a “measurement dashboard.” Here, we’ve identified five baseline metrics that should be part of every event marketer’s measurement toolkit. Gain a thorough understanding of each of the five — and be ready to rattle them off on demand — and you’ll be more than prepared to talk to financial executives about your program’s health, growth, and successes in terms that resonate with them.

KEY METRIC 1:
TOTAL COST OF THE EVENT

This is at the heart of just about every measurement that you’ll encounter. Without clear knowledge of what you’re spending on each event, you’ll be hard pressed to define other measures like profit, return on investment, customer-acquisition and -retention costs, and so on.

However, this seemingly straightforward metric has some complexity. There are two different ways to consider total-cost calculations:

 Total expense. This figure represents the total cash spent to fund the event and its elements. It typically does not include overhead, such as employee salaries. It comprises only hard costs related to expenses like venue, transportation, housing, and meals.

 Total investment. This figure comprises the total cash expenditures, along with a reasonable allocation of overhead costs. For example, say you are a full-time event planner managing three events per year. Event A takes 50 percent of your time, and events B and C each require about 25 percent of your time. When calculating the total investment for event A, allocate 50 percent of your salary to the total cost. Do the same exercise for each of your team members to calculate the total investment your department makes in each of your company’s events.

Either calculation is valid. Simply be clear when you are reporting your numbers which approach you have taken, and be consistent over time.

KEY METRIC 2:
REACH AND FREQUENCY

Reach (sometimes called “net reach”) tells you how many unduplicated visitors attend your events. Its purpose is to measure the breadth of your events’ spread across a particular audience or population. This figure is typically expressed as either the number of individuals who attended or as a percentage of the total population you were trying to attract. For example, if you target 150 prospects and 75 attend, your reach would be expressed as either 75, or 50 percent. For an event program, it may make the most sense to track reach on an annual basis: How many unique customers and unique prospects attended your events, out of the total universe of customers and prospects your program targeted throughout the year?

The biggest challenge to tracking reach is ensuring you are not double counting. For example, if one attendee comes to two events, he or she should be counted as one unique visitor — not two visitors.

Tracking this metric over time for three key audiences — customers, prospects, and influencers (such as media and analysts) — will give you a clear picture of who is responding best to your event-invitation tactics, and where you have room to improve your pre-event marketing strategies to grow your participation.

Frequency, on the other hand, is a measure of the average number of times visitors have attended one of your events. For example, say some of your 75 attendees came to one of your events, some came to two, and so on. When you add up the total number of these event exposures among your attendees, you arrive at 225 total exposures. To calculate the average frequency, divide your total event exposures (225) by reach (75). In this scenario, your average frequency is three. This tells you that your attendees came to an average of three events each during the year.

Tracking reach and frequency over time can help you gauge the effectiveness of your promotional efforts, as well as to assess the perceived value attendees find in your events.

KEY METRIC 3:
BUSINESS VALUES OF ATTENDEES

It’s one thing to know that 75 people attended your event. It’s another to know that those 75 people represent $750,000 in potential business. This number is called customer or prospect lifetime value, and can be a powerful guide in helping you determine which events — and which attendees — merit your time and budget.

Let’s look at an event which you hold in an effort to grow your share of business with current customers, or to acquire new customers. Say you already have 100 customers, and on average they each do $1 million in business with your company over time, resulting in $100 million in projected lifetime value for the entire group. If you spend $1 million on your event, then you need to increase your share — the number of customers or the amount they are spending with you — by 1 percent, or $1 million. But remember that the $1 million isn’t all profit to your company. After sales and manufacturing expenses are factored in, it’s more realistic that about 25 percent of that, or $250,000, is actual profit. So to cover the cost of your event, you’re really looking at 4-percent growth (four new customers at $1 million projected value each, or a lift of $4 million in projected spending from your current customer base) to net the $1 million in incremental profit you need to offset your costs.

As authors Don Peppers and Martha Rogers have written, “some customers are more equal than others.” Lifetime value is an easy way to evaluate your attendee potential and determine who is the ripest candidate for your event program. The knowledge can help you tailor your event program to those customers and prospects with the greatest likelihood of increasing their spending with you to achieve the payback you need on your event investments.

KEY METRIC 4:
SHARE OF VISITS

This metric is a measure of your event program’s competitiveness relative to other event opportunities in the market. It measures your relative ability to attract visitors, compared to other events in the marketplace. For example, say there are three events in your market each year. One is sponsored by your company, the other two by competitors. There are 1,000 total customers and prospects in the market, and 750 of them attend one of the three events. Of those 750 total visits, 300 were for your event. To calculate share of visitors, divide your visitors (300 attendees) by the total number of visitors (750). Your share of visitors is 40 percent. Tracking this number over time can tell you if you are gaining or losing ground to your competition for attendees’ limited time and dollars.

This metric, while a strong snapshot of your program’s competitiveness, requires careful definition to be meaningful. A definition of the competitive set that is either too broad or too narrow will result in a share-of-visits figure that is not truly representative of your market position. Similarly, as competitors’ programs evolve, you must account for that in your market definitions. Does a competitor hold an event every other year? Has someone added an event to the mix? All of these factors can affect the accuracy of your share-of-visit calculations.

KEY METRIC 5:
RETURN ON INVESTMENT

Ah, yes: ROI. Maximizing ROI is a stated objective of many a firm. But you have to be careful with ROI in the marketing world. It’s an important, but problematic, metric.

Let’s start with what ROI, or return on investment, really means. First, it’s a percent measure that describes how well assets — in this case, your events — are being used. To calculate it, you divide the net profit you connect to your event (such as immediate incremental sales from attendees) by the total amount you invested in the event. (Remember our discussion earlier of total program cost, and be sure to use a consistent figure when calculating ROI.) For any given dollar spent, you want to get the best return.

Now here’s the counter intuitive part: While you may want to maximize ROI, that doesn’t mean that you should structure your budget primarily to maximize ROI. Let’s compare two events. One costs $200,000 and has an ROI of 50 percent, and the other costs $1 million and records an ROI of 40 percent. The first, the less costly event, leads to $100,000 in sales profit, while the million-dollar event captures $400,000. If you have to cancel one of them, you probably want to cancel the less-expensive event, even though it has the higher ROI. On the other hand, you might also find that the less expensive event had greater attendance, or was attended by more valuable prospects (in terms of lifetime value, which we discussed earlier, under Key Metric 3: Business Value of Attendees).

So there are shortcomings with ROI. While it’s an important measure, and one that your executives will certainly want to discuss, it is dangerous to consider short-term ROI alone.

The ROI discussion is a perfect example of the metrics paradox. Building a solid measurement program with a financial point of view is critical to solidifying event marketing’s role in the marketing mix, and gaining the understanding of finance executives. Yet there is no one metric alone that can possibly tell the entire story about your event program’s past success and future potential.

While these five metrics are simply a starting point for building an ongoing dashboard for your event program, they’re the five that can tell you the most right off the bat. So start reporting your program efforts not only in terms of softer measures like brand affinity, but also in the cash-and-profit-based terms defined here. You’ll start talking the talk that matters to management. And that’s the kind of talk you can take to the bank.e