Why Embracing Event KPIs Is The Key To Agency Profitability
KPIs are measurable goals, identified by by senior management, as critical to the success of the enterprise.
Going forward, agency profitability will depend on the ability to demonstrate a measurable contribution to those goals.
This post will familiarize you with the concept of event KPIs (Key Performance Indicators).
The 6 TIPs I have included will help you to make KPIs work for you.
TIP 1 It is not the role of the event agency to develop event KPIs or any other corporate metrics.
After you read this post, you will understand why most success metrics proposed by agencies are not relevant to the success of the business and so are never embraced by senior managers.
So. Why Are We Talking About KPIs?
Because unless you are lucky enough to live in the Land O’ Nod, you know that every CMO is under pressure to demonstrate that their investments (i.e. programs) are contributing to the bottom line.
- As we keep pointing out, event marketing budgets are the largest line item in many marketing budgets.
But there is another grand theme that is changing the event business, and that is social media.
- Advice Interactive Group released an infographic showing that in 2015, 24% of the total ad spend will go to social media.
- Forbes forecasts that by 2018, social media will garner up to 15% of the advertising budget… this despite the fact that 85% of the CMOs surveyed cannot show the impact of their investment.
Pick either number or split the difference, but think about this.
- Social media campaigns are ongoing, so social media agencies have a “seat at the table.“
- To keep their seat, they are bringing metrics to the table with them.
- Not only does that make for pretty charts, it provides much-needed air cover.
In my opinion, this data-driven approach will have a significant impact on event marketing practices.
TIP 2 Keep an eye out for the introduction of any event success metrics, whatever they are called.
Such an introduction creates a golden opportunity to move the discussion from cost control to profit contribution if you can demonstrate that you can drive results.
Things You Need To Know About KPIs
KPIs focus an organization on what matters most to its success.
- A KPI is a variable that has a significant impact on profitability.
- A KPI defines a measurable goal that is a prerequisite to success. e.g. To meet ‘y’ goal, ‘x’ conversions have to take place.
- Every department understands how their contribution will be measured.
- There are thousands of KPIs. New ones, including many for social media and content marketing, are constantly being developed.
TIP 3 Think about a KPI as an insight into what your client values. Consider the impact of your event on these traditional KPIs:
- Customer retention.
- NPS score.
- Market share.
- Cost per lead or acquisition.
- Conversion rate.
- Pipeline movement (where the event is one in a series of touch points).
What will it mean to your business if you can demonstrate your ability to impact these kinds of metrics?
What will it mean to your business if you can’t demonstrate an impact, but the social media agency says that they can?
- With a published KPI, there is no longer any ambiguity about what the most important objectives are.
- This is not unlike studying for the test – when you did, you aced it… next question.
TIP 4 If you don’t know what the KPIs are for your event, or if as is more likely KPIs have not been established; chances are that no one understands the business impact of the event.
- This is an area where marketers are hoping to apply predictive analytics to learn more about their customers. (I am planning a post on predictive analytics, so please let me know if you have any specific questions.)
What About ROI and KPIs?
TIP 5 ROI is a KPI, but it has two significant shortcomings as an event management tool.
ROI is not diagnostic.
- ROI tells you if the event exceeded, succeeded or fell short of the goal.
- ROI does not offer any insight into what’s working, and what must be improved.
ROI is not timely.
- The pace of corporate events demands that data be available to inform planning for the next event. (Especially in a B2B setting, ROI data can take months to calculate.)
TIP 6 Which leads me to my last point. While potentially the most important, event KPIs are only one of many kinds of event measurement.
- Developing measurements that provide insight into a KPI is smart.
This is one of those more-is-more kinds of equations. The more kinds of data you can integrate, the more you will know about attendee behavior and attitudes. The more you know, the better positioned you will be to help your client to achieve their KPIs – and the more valuable you become.
To wrap it all up:
- Social media is placing a new emphasis on metrics including KPIs.
- KPIs are important because senior managers have identified them as central to the success of the enterprise.
- Event KPIs provide an unprecedented opportunity for event agencies to demonstrate the value of their contribution thus assuring their long-term profitability.
Do any of your events have metrics yet?
Be sure to visit ck Curates where there is a whole section devoted to Metrics.