Event Marketing can be a highly profitable investment. I describe a method to measure event ROI based on Customer Lifetime Value and Customer Buyer Journey State Transitions.
I present a simple and elegant way to measure ROI from Event Marketing by using the following simple framework:
- Customers’ journey to purchase follows a buying cycle described below
- Customers have a potential lifetime value based on their state in the buying cycle
- By tracking customers who attend an event and by measuring their pre-event state in the buying cycle and their post-event state in the buying, we can estimate the ROI from the marketing event.
Customer Buying Journey [from McKinsey]:
Customer Lifetime Value (CLV)
CLV = The present value of the expected sum of discounted cash flows of an individual customer.
Each facet of the equation above can be modeled by identifying the physics of customers’ behavior. For example, the buy till you die framework uses the NBD-Pareto model.
Bringing It All Together for Event Marketing ROI
- Invest in unified identification of customers attending an event. I recommend measuring “customers” at the CRM Account level.
- Create a modeling framework to estimate the CLV of individual customers.
- Identify the probability to purchase conversion at each state in the Buyer Journey.
- Potential CLV at each state = CLV x Probability of Conversion at Each State
- [A] Identify the buyer journey state of the customers pre-event. This can be done via surveys in attendee registration and management systems.
- [B] Identify the buyer journey state of the customers post-event. This can be done via surveys in attendee registration and management systems.
- ROI from Event Marketing = [(Customer Lifetime Value Potential in Post Event State – Customer Lifetime Value Potential in Pre Event State) / Event Budget] – 1
Meaningful Data can help companies track event metrics.
We Crush Events can help companies produce world class corporate events.
Companies can create and measure their events end-to-end by using the two companies above led by yours truly.