The Lines are Drawn: ROI vs. ROO

Meeting planners no longer debate whether meetings must produce measurable value. They agree that they must demonstrate the worth of their meetings—and, by extension, themselves—to the senior executives at their organizations.

But lately, the debate has centered on which measure will prove most effective with CEOs and CFOs: ROI, return on investment, or ROO, return on objective. Meeting Professionals International has been pushing ROI as the gold standard to which planners should aspire. It has introduced Jack Phillips, head of the Birmingham, AL-based ROI Institute, and the Phillips ROI methodology to the meetings industry.

However, some in the industry contend that planners are setting themselves up for failure by trying to attain a goal, ROI, that is very difficult to achieve for most meetings. ROI typically expresses the worth of a meeting, or any other business activity, in monetary terms—the number of dollars gained or lost as a result of the meeting, after accounting for all associated expenses. ROO, on the other hand, measures whether the objectives of a meeting have been met, such as whether, for instance, sales representatives can recall the selling points of a product six months or a year after a sales training meeting.

"An ROI approach does the industry a disservice," says Jerry McGee, president of Ambassadors, a large meeting-planning company based in Newport Beach, CA. "There are so many factors in the amount of sales increase, such as advertising and other marketing," he continues. "If I'm the head of sales, coming out of a product-launch meeting, I want the sales- force to recall a product's value proposition. It's untenable to represent as a dollar figure the impact of that meeting. The industry is going to fall on its face in front of procurement people and other executives if it tries to do that."

Rather than using ROI, McGee argues that meeting planners should follow the lead of marketing and advertising, which traditionally have set their own standards for measuring success. Advertisers use terms such as "reach" and "frequency"—measurements that are generally accepted by executives whose companies spend money on advertising, according to McGee.

McGee contends that most planners have only begun to scratch the surface of ROO anyway, so it's a better strategy to focus on improving ROO measurements rather than jumping to ROI. "The only information that most organizations are able to produce now is the post-event survey," says McGee. "That can be a valuable tool, but only if it captures data on what the event was supposed to accomplish. But surveys often don't measure business objectives, while most senior executives have very specific objectives. They are not asking us to provide ROI. They are asking us to deliver a meeting experience that accomplishes their business objectives, and they are asking us to provide credible data on that."

However, David Rich, vice president of program strategy worldwide for The George P. Johnson Company, a Boston-based event and marketing firm, says corporate senior executives are now asking more from meetings than simply accomplishing objectives; every aspect of a company's operations must prove its worth in hard dollars and cents. "Right now, there is a hypersensitivity to accountability," says Rich. "CEOs and CFOs are questioning the validity of the measurements used in marketing; they want better ways to measure how they spend money. And when people are asking for more accountability, we are playing a game of 'dodge 'em' by using ROO. ROO is an imitation of ROI; it is a pseudo-measurement. If you go to the average CEO and talk about ROO, he will look at you like you're from Mars. The return they want is money."

There, is, however, a catch: Rich and advocates of the Phillips ROI method believe that planners should concentrate initially on figuring ROI for only their largest, most expensive, most important meetings, such as sales meetings and customer events. And Monica Myhill, a meeting planner who has trained in the Phillips ROI method and now consults with organizations on meetings ROI as president of Littleton, CO-based Meeting Returns, says that "probably only five to ten percent of meetings should be taken to the ROI level."