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    September 28, 2012 // 2:00 PM

    How to Calculate Whether That Trade Show Was Worth the Investment

    Written by Dan Slagen | @

    event trade show roi calculationintermediate

    We’ve always been pretty hesitant to jump in head first with event sponsorship and attendance. Sure, there are some industry events we think rock: Dreamforce, SMX, Dublin Web Summit, LeWeb, and of course Inbound. But what usually happens with events? They end up over-hyped and under-delivering, chalk full of poor networking opportunities, generic content, and few opportunities to make meaningful connections with new leads and customers. That means a whole lot of time and money gets wasted. What a bummer.

    Wouldn't it be nice, then, to be able to determine whether an event yields enough new business to justify the cost to participate in it? Absolutely. That's why we wanted to outline exactly how to track event ROI accurately so you can determine whether you should keep sending in that sponsorship and/or attendance check year after year. Let's get started.

    How to Calculate the ROI of an Event or Trade Show

    If you’re going to sponsor an event, the two core components your boss will ask about will be (or at least should be) ROI and tracking. Of course there are additional benefits of events such as thought leadership, networking, learning, branding ... but when there's a hefty sponsorship check involved, there needs to be a measurable, positive ROI that can be tracked.

    How to Track Event ROI

    The best way to track ROI is using this formula:

    (Gross Profit - Marketing Expenses) / Marketing Expenses

    For instance, let's say we went to an event and our expenses were as follows:

    roi of events resized 600

    So, did we have a positive ROI? At the moment, we wouldn't know, because our sales cycle isn't instantaneous -- it's a few weeks long. As such, it would take a few weeks before we could look back to determine whether the investment was worth it. But when that time comes, this is how we'll calculate it:

    ROI = (Gross Profit - $100,000) / $100,000

    Note that the gross profit number would consist only of deals that happened due to our attendance at the event, so they would not have happened if HubSpot had chosen not to show up. As long as your gross profit -- which for HubSpot specifically will be measured based on our LTV:CAC performance model -- is higher than your total investment, then you'll post a positive ROI. It will then be up to you to determine if the ROI is enough to justify continued involvement in the future.

    How to Track Trade Show Lead Generation and Sales

    Now that we know how much we spent on the event, we then need to determine what leads and sales were generated as a result of our participation. The best way for us to track this is to set up a naming convention for all leads generated due to that event. Using a CRM -- we use Salesforce because it integrates with HubSpot for a nice, closed-loop view of our sales and marketing activities -- we would enter every single lead generated at the event (via badge scanning, business cards, or email addresses collected) with an event tag. Because we've tagged them properly -- the tag can just be the name of the event you attended -- we can then set up weekly reports to monitor performance. As the leads begin to turn into new HubSpot customers, we’ll then be able to perform our ROI calculations.

    Now, if the event just ended but you have a long sales cycle, it would take a little bit of time to calculate the exact ROI. But you could still run some predictive ROI calculations each month, and wait to perform the final analysis a few months down the road. After that, though, the team that attended the event should meet, review the numbers, and ultimately make a call on whether or not the participation was worth it based on the ROI calculations. Having this post-attendance meeting is essential for your company -- just be sure that the meeting happens after all leads and sales can be accounted for, and have adequately matured.

    How do you determine whether your presence at a trade show or event was worth the cost?

    Image credit: Images_of_Money

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